World Class Gas Resources

[petrengr1]

Are the gas resources that IOC has world class? I guess the biggest thing going in PNG is the world class Exxon PNGLNG $19 Billion plant. It is a 2 train plant and it has been said recently that they have 9 TCF to run this plant for 20 years.

I think we have more than 10 TCFe at Antelope Field. We will get the new certified number four to six months after the appraisal drilling is completed. Most recently Dr. Hession said that Antelope-6 would be the last piece before Total and IOC would select their respective Engineering Consultants to do the official certification. This may slip if they decide to drill Antelope-7 to the west of Antelope-5.

1. So we probably have more than 10 TCFe at Antelope Field and that is enough gas for 2 trains like Exxon has at PNGLNG. (I think we have enough for 3 trains)

On the recent MS Conference Call Dr Hession made the following comments base on IOC’s recent estimates for several of the fields:

2. We have 3.5 TCFe at Wahoo that is enough for 1 train.
3. We have 5.5 TCFe at Raptor that is enough for 2 trains.
4. We have 5.5 TCFe at Antelope South that is enough for 2 trains

We have been saying we need 3.5 TCFe for 1 train so I take the above to mean that he thinks these estimates for Raptor and Antelope South are a bit conservative.

Anyway, if we have enough gas for the number of trains he said, with at least two trains for Antelope that would give us enough gas for 7 trains. If we just stick to the gas volumes mentioned for the fields above that comes to 24.5 TCFe. He didn’t mention the volumes we might have at Triceratops and Bob Cat so we have that for back up plus the other 35 prospects.

So, yes 24 TCFe and 7 trains sounds like world class to me.

I guess the numbers they have been using for estimating the added Net Present Value to IOC at PRL15 are $600-$700 million per TCFe for each TCFe above 7.1 TCFe. That is the $400 million in payments and $200 million for IOC’s share of the LNG. And for expansion trains they think they can make $300 million/TCFe for their share of the LNG. I assume we would expect to make a deal at least this good for all other prospects outside of PRL15.

At Antelope South Total will pay IOC $65 million/TCFe above the first TCFe. If we discount that to 2021 when the payment will be made it is valued at about $35 million/TCFe after the first TCFe. Since Antelope South is in PRL 15 I believe it will be used for expansion trains and we expect to add $300 million/TCFe to our NPV for each TCFe. So Antelope South could add to our net present value (35x4.5) + (300 x 5.5) or about $1,800 million or about $36/share.

I am just an old geezer playing around with numbers here and I am out of my realm, so I invite you accounting experts to correct it as necessary.