Begrudging Hession

[ArtM72]

2126 -

Would you please point to the section of the SPA which gives the operator "the full, unambiguous and unilateral power to declare the 'trigger date' which will begin the appraisal/certification process of PRL 15".

If your notion of that authority is the clause which states the trigger date is based on Total's sole authority to declare the end of A6 testing then you have a point. If that is the case then MH left IOC open to never getting paid because there is nothing other than winning a bad case in a long court battle that would force Total to declare the end of testing. Thus in a very important way Hession REALLY screwed up by not making "end of testing" more definitive in his deal with a bad partner.

Will has got it right. What is going on (along with the demonization of Mulacek here by some) is common shareholders getting pure crap information from Hession and HIS board. We have NO idea what Hession is doing or why, and if he won't tell us then he should be fired for malfeasance. I have no idea why Tree supports the actions of this man.

As the old cheer went, he's gotten the elevator and we've gotten the shaft.

[will2bgreat]

2126 - Would you please point to the section of the SPA which gives the operator "the full, unambiguous and unilateral power to declare the 'trigger date' which will begin the appraisal/certification process of PRL 15". If your notion of that authority is the clause which states the trigger date is based on Total's sole authority to declare the end of A6 testing then you have a point. If that is the case then MH left IOC open to never getting paid because there is nothing other than winning a bad case in a long court battle that would force Total to declare the end of testing. Thus in a very important way Hession REALLY screwed up by not making "end of testing" more definitive in his deal with a bad partner. Will has got it right. What is going on (along with the demonization of Mulacek here by some) is common shareholders getting pure crap information from Hession and HIS board. We have NO idea what Hession is doing or why, and if he won't tell us then he should be fired for malfeasance. I have no idea why Tree supports the actions of this man. As the old cheer went, he's gotten the elevator and we've gotten the shaft.

Thank you 2126 for the response, but are you saying that Mike lied to us?  If my memory serves me correctly, Mike stated the decision for A7 had to be unanimous and he would only agree to it if it had the potential to add a significant amount of gas; >80% probability.  Furthermore, if the contract is how you state; why would Total stop at A7?  As Pet has stated previously, it may take up to 3 wells to delineate the boundary.  So if you are Total, go for all 3, bankrupt IOC and buy it for pennies on the dollar.

[MartiniStocks9756]

From the last transcript....What they're doing now, I mean Antelope-6 is just finished and as of today like the absolutely clear, Antelope-6 is the last JV approved well. That's it. Now what we're faced with is should we do another. Things has come to the full, this well test has told us that we don’t see a barrier out towards the West. So what we need to do and the JV need to do is put the pieces of the puzzle that it literally just arrived on our desk together. But there is one thing and I think I've been absolutely consistent about, we will only agree to Antelope-7 and this is an object because as you say it requires unanimity, we will only agree to Antelope-7 if it delivers materials upside to our shareholders. That's the only lens that I am looking at it through. But I'll go back to, today there is no Antelope-7. It will be our JV decision and we are working through that at the moment. Evan Calio And what are you trying to say, does your position at least relate to analyzing this newly arrived data to understand how confident it maybe to derisking a larger number and there Antelope-7 not being necessary. I am just trying to understand what InterOil's trying to decide whether or not they would support it or what you are waiting or analyzing at this point? Dr. Michael Hession Yes, you've actually got it there. I mean there is two things here that we've taken about. It's the time and then the potential size of the price. Now this extended well test, what we need to understand is has this group or helped improve the position of the flank further out to the West. So, what we have to do is we have to understand has that reduced a need for Antelope-7, which is entirely possible, Evan. Evan Calio Yes. Dr. Michael Hession And I'll go back to it about we didn't expect, we didn't have great expectation from Antelope-6. Remember, Antelope-6 was off to the flank to the East. So, three, two and a half, three kilometers away and now what we need to do is we need to sit down and put the pieces of that portfolio together and see how that affects the potential size of the price for an Antelope-7 well. And I will look at that and I will look at the timing. And we will just literally towards the value equation and decide there in it. Evan Calio Great that's helpful. And I think I have my follow-up to what you just stated is really a broader question I mean it's a more direct, I mean what do you think the resource estimate is at this point I know it's in the context of new data where you have hard GLJ estimate additional flow data at N5 and details from page ten of your slide was some more to the prior but even more convincing from the prior flow test Antelope-6 data. I guess just specifically why isn't the GLJ 350 estimate is your multi-year auditor supported by the flow test why isn't that your reference cases as you think about it today? Dr. Michael Hession That’s absolutely fair question Evan. As we go through this process we started and I started fairly conservatively what needs to be happening is that GLJ appears to be getting it right again and again for instance I mean David can confirm this, GLJ field [Medalma] David Kirk GLJs are the one that predicted and we didn't see it East. Dr. Michael Hession Yes, so GLJ were more correct than we were. So GLJ also do as David said see volume out towards the West and they agree likely Western extent to the field. So you got to wonder whether the end of this process GLJ may be right. But what we have done is we have tried to go through a very conservative process and we always said we believe there is enough gap between the two. Now I would also say as David commented earlier different auditors have different processes and the thing that will bring them together is the wealth of data we are data driven company and what to ensure here is now that the data we have got would drive it to the best result. But if you look at the predictive nature of the GLJ work they have said to get it right which is somewhat [indiscernible] Evan Calio Maybe last if I could. Somewhat of a summary to understand this so and it relates to I think Neil's part of question. I mean the difference between GLJ 350 right and the steel gas decline is 3 Tcf of gas right and that the primary difference and correct me if I am wrong relates to that the western flank assessment right and so that's 1.2 billion under the payment mechanism with -- right there right but the difference between those two estimates so is that a fair assessment between those two as you think about Antelope seven and it sounds as though what you are saying some of the data you have today may have bridged that 3 Tcf difference without the need to drill Antelope seven where Antelope seven maybe I guess conclusive which is those two end points of the resource is that too simplistic or can you comment on that summary? He said unanimous....

[Palm]

One thing people erroneously continue to do here is state and assume that everything is controlled by the SPA. The SPA only governs things between IOC's sub and Total's sub having to do with PRL15. The PRL15 JOA governs a lot of what happens and includes OSH.

As mentioned elsewhere most standard JOAs (which IOC has stated it uses) include clauses for things like "Exclusive Operations".

Art, Section 3.3 contains the language to which I've referred to several times and is what 2126 is referring to:
"Interim Resource Payment

(a) The Buyer must notify or must procure that the Operator notifies the Seller within five (5) Business Days of the completion of drilling (and testing) of the last appraisal well under the Appraisal Work Program. Promptly following such notification, the parties will procure the Interim Resource Certification in accordance with Schedule 4 and the Interim Resource Instruction."

As to the "Unanimous" language this only covers IOC and Total. "Exclusive Operations" are referred to in the SPA by referring to the JOA. For the Appraisal Work Program it appears that only IOC and Total must agree to move forward for A7 etc. as Section 6.3 (e) states:

"Each party shall use its reasonable endeavours to procure that any other person holding an interest in the PRL 15 Title shall vote in favour of and implement the drilling of each appraisal well as designated in accordance with this clause 6.3. If any other person holding an interest in the PRL 15 Title votes against the proposal to drill an appraisal well as designated under this clause 6.3, the parties shall propose and conduct such drilling as an Exclusive Operation under the PRL 15 JOA."

[ArtM72]

How would you like to work with a guy that speaks in circles like this? Make anything you want out of that transcript.That is its unique character.

[2126]

2126 - Would you please point to the section of the SPA which gives the operator "the full, unambiguous and unilateral power to declare the 'trigger date' which will begin the appraisal/certification process of PRL 15". If your notion of that authority is the clause which states the trigger date is based on Total's sole authority to declare the end of A6 testing then you have a point. If that is the case then MH left IOC open to never getting paid because there is nothing other than winning a bad case in a long court battle that would force Total to declare the end of testing. Thus in a very important way Hession REALLY screwed up by not making "end of testing" more definitive in his deal with a bad partner. Will has got it right. What is going on (along with the demonization of Mulacek here by some) is common shareholders getting pure crap information from Hession and HIS board. We have NO idea what Hession is doing or why, and if he won't tell us then he should be fired for malfeasance. I have no idea why Tree supports the actions of this man. As the old cheer went, he's gotten the elevator and we've gotten the shaft.

Under Clause 3.3(a) of the SPA, the Buyer must notify or have the Operator notify the Seller within 5 business days of the completion of drilling and testing of the final appraisal well under the appraisal drilling program. This is the 'trigger date' to begin the certification process. Total is both the Buyer and Operator and, thus, has full, unambiguous, and unilateral power to declare the 'trigger date'. This is further defined under Schedule 4, Part 6© of the SPA. Within 20 days of this date, Total and IOC select their appraisal experts and the certification process begins. While other issues relating to PRL 15 are governed by the JVOA, the Interim Resource Certification and Payment are only governed by the SPA. The end of 'testing' of an exploratory gas well is a relatively standard point in time across the industry. Testing is over at Ant 6, judging by the plans to cap and abandon it. The remaining question is whether Ant 6 is the 'final appraisal well'. We should know the answer to that in 30-45 days. All of this is very reasonable O&G business practice. No surprises.

One can hope for rapid or immediate corporate decision-making on the part of both Total and IOC but that is just not a reasonable expectation when dealing with multi-billion dollar decsions.It is also unreasonable to expect hand-holding by a corporate CEO explaining exactly 'what he is doing and why' in the middle of negotiations with a business partner regarding decisions with hundreds of millions of dollars at risk.

It is rather tiring to sift though self-serving statements like that Hession 'screwed up' and that Total is a 'bad partner' and shareholders are getting 'crap information' and Hession should be fired for 'malfeasance'. It is rather clear that all parties to PRL 15 are awaiting the upcoming OSH certification numbers in order to make very important decisions regarding further drilling and testing to determine the extent of the resource necessary to make crucial engineering, planning, and financing decisions regarding the plant size. Why these circumstances should be causing so much anger and distress is somewhat a mystery to me.

[Martinistocks]

Because we are emotional investors and the PPS is $29 and the company mission and vision to drill, discover, monetize rinse and repeat is now a mantra that is not being fulfilled at the moment.

[Putncalls]

6 Ts from that drilling program isn't bad. IOC owns about 80% of that. What is that worth 3 billion, maybe 4?

[Martinistocks]

That would be a great payday. How do we get it done?

[Thylacine-2]

The way we get it done is to wait to monetize, with whatever degree of equanimity we can muster, until the recovery of the price of oil and LNG is sufficiently recovered that there are eager bidders for our resources.