What's the elephant in the room?

[ltinvest]

[quote='ltinvest' pid='33285' dateline='1386362474'] I still don't think I understand the "bonus" money. This is for PRL 15 only....correct? Hession mentioned everything over 1TCF they get $100 million for every 1 TCF. He specifically said if they certified 11 Tcf at PRL 15 they would get $1 Billion additional from TOT. Did I mishear or misunderstand this?

That's how I understand it, fwiw.

The way I understand it is that for each TCF of newly discovered oil (not E/A) in PRL 15, we get a bonus from Total of $100 million. As I heard him, he was discussing the elephant prospect at the time and the 11 TCF number rewarding us with $1 Billion was just an example of how it works.  It might have gone down better if Hession had put less energy into discussing the icing on the cake and focused on the cake.  He might have been mistaken in assuming that it would be understood by all that the resource is monetized and we will have 30% of what will likely turn out to be a multi-train LNG project.  The signicance of a possible 11 TCF  "elephant" in the licence area isn't that we get another $1 Billion from Total.  It's that 11 TCF supports two more trains.

Thylacine....excellent, excellent point!