CSIRO, Universities, IOC Modelled PNG Region = Reef Trends

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Antelope and Triceratops invalidates old palaeogeographic models

  The discovery of the Antelope shallow marine carbonate platform and reef complex onshore in the Eastern Papuan Basin does not fit existing basin models that were developed based on the historical work from the 1950’s to the 1990’s.

  The fundamental question as to the prospectivity of the Eastern Papuan Basin: are these singularities, or do they signify more significant shallow marine carbonate development in this region.

  The Triceratops and Antelope areas were believed to lie in basinal deeper water setting on the margins of a major facies transition from carbonate to siliciclastic.

  Based on this palaeogeography the shallow marine carbonate depositional systems identified at Antelope and Triceratops should not be present.

InterOil Exploration History

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2012 marks 13 years of InterOil’s exploration in Papua New Guinea.

 InterOil began exploration in Papua New Guinea with an initial license award in April of 1999.

InterOil took a somewhat contrarian view and saw evidence with previous oil and gas discoveries and abundant gas and oil seeps indicating an active Petroleum System of an under explored Greenfields province.

 In the late 1990’s most of the Eastern Papuan Basin lay fallow and unlicensed.

 Despite early success in carbonates in the late 1950’s and 1960’s exploration in the eastern basin had

stagnated.

 Best shown with only 2 non-InterOil onshore wells drilled in the area since 1970 (Puri South 1, 1988 and Ipigo 1, 1970).

 By comparison in that 40 year period nearly 160 wells were drilled elsewhere in the Papuan Basin. InterOil was awarded a large exploration area of nearly 8 million acres of frontier basin – with such a large frontier

license a systematic approach was required to focus our efforts.

In 2009 InterOil extended its licenses and relinquished 50% reducing the total area to a little approximately 16,000 km2 (~3.9 million acres).

I think this is crucial to understand. The early short argument was based a lot on the older model. When IOC starting saying what they were seeing the hedges were told and believed that it was impossible for what IOC was saying to be true. They were labeled "liars". But when people like Henry, Dave Holland, Wayne Andrews, and others saw the seismics their eyes popped out of their heads. Henry said they were some of the best he'd ever seen and he kept his eyes on what was going on in PNG. When IOC hit Ant-1 he wanted to be a part of it. Ant-2 was the capper; this stuff was real. He knew it and the Bigs knew it. It has been a matter of working through the economy crash and politics of PNG. Now things are in place and "the beauty contest" is down to the finalists.

Yes, for me the absolutely crucial moment was when Ross Smith bascially had to admit that IOC's geological model was right after all. They did this in a report that was issued when Antelope1 just hit the top of the reef, and both reef and dolomite were confirmed. I've said quite a few times that from that moment on, the smart shorts moved on, and we were left with, well, you can fill in the rest.

The reverse side of the coin of this is that pre-Antelope 1, the shorts did have something of a credible case (I don't know how credible, I'm not a geologist, but I believe it depended on who you asked at the time) and there were conflicting interpretations and models, with quite different consequences and outcomes. But the smarter critics like Andy Left and Ross Smith moved on after Antelope1.

After Antelope1 though, it was always highly probable that E/A would be a world-class resource with very favourable production economics and I never understood why so much shorting was hanging around, never mind all the fluff arguments they were throwing up.