CPA proposes Class Action Law Suite vs MH and BOD

[Stavros]

I reiterate my views:

This was all set up between TOTAL, XOM, OSH and PNG Government to Unitize PNG LNG and Papua LNG
This was made obvious when OSH started touting the YUUUUGE synergy benefits a few months ago.

Unitization of the LNG Projects is the next step

It seems to me that something like the following will happen relatively soon.

WE MUST GET A BETTER DEAL FOR OURSELVES AND THEN LET THIS HAPPEN

1. IOC will be acquired by OSH - either they prevail with this deal or we make enough noise to get it sweetened
2. The PNG LNG Project and the Papua LNG Project will quickly be "Unitized" and ExxonMobil will be the Operator of the entire enchilada (Botten already alluded to having One Operator at Caution Bay).

How will this happen?:

1. TOTAL will have 48.5% of PRL 15 after the deal and after the PNG Government opts in. This is clearly way too much. TOTAL will use this ownership in the process of merging the two projects
2. The Unitized Project will buy out Santos' 13.5% share of PNG; they need CA$H and can't afford to stay in a Project that doubles in size
3. The JV Partners in the Unitized Project will be something like the following:

• ExxonMobil - 30%
• OSH - 25% (They will reduce from 29% to bring XOM on-board)
• TOTAL - 20% (They will also be selling to XOM and others)
• PNG Government - 21% (They now have 19.6% of PNG LNG)
• Smaller Partners who are already in PNG LNG - 4%