Interoil: deal, value, uncertainties, expectations

[Petro2458]

Thanks for all the comments. I am still collecting my thoughts but here are some quick notes:

Ant-3 was basically a slam dunk well that IOC drilled very close to Ant1....I never did really understand why they weren't more aggressive with this well location. While it did provide some key data around structure, reservoir quality etc ...I'd be surprised if this would do much to the GCA numbers. They had probably made reasonable pre-drill assumptions for this area / well. The core question for this would be: how did the ant 3 results impact the GCA low, mid, high pre drill geologic model assumptions.

The deal range in my mind does more to confirm the GCA work...I.e. 4.5 to 6.5 tcf. Than the GLJ

The most likely reason IOC has not drilled these 2-3 appraisal wells is because 1. Cash preservation and 2. Not drilling them keeps it sexy for potential bidders. You never want to drill up a field to the point there is no upside uncertainty/potential to sell

If IOC felt like another resource assessment would actually move the needle...I.e. Another 1 TCFE isn't gonna sway the market..I think they would do another update.

Market currently believes we have a 3.5/4 to 5.4 TCFE field/deal....because the firm deal numbers are probably based on Total's view of the low side which seems to be quite similar to GCA and you can infer that since Total won this deal that it's also XOM and RDS view as well...and until we see these additional wells we aren't going to know much more.

2014 drilling program shaping up to be very significant for Interoil..

More to come...I need to do a value estimate based on a 6-7tcfe e/a deal plus a 2 LNG train project using triceratops and E/A. I think this is smart way to look at the stock and then everything else is gravy.

[jft310]

JFT, I think that I remember from the cc after A3 was drilled that it increased the amount in E/A by about 1 TCF. That does not completely explain the disparity between the numbers of GC and GLJ.

cyber different measuring points

True GLJ added1t for Antelope 3 but they had already given some credit for connectivity

GCA is what I was talking about  and they didn't give that same connectivity because Antelope 1 and 2 were so far apart

but IOC saw that drilled Antelope 3 right in the middle of the two wells and then ran connectivity tests

Those results are not in the GCA report that's out there today

Stavros smart man that he is says they should call for a new GCA report now and eliminate the differences . He is in the business and feels based on his conversations with GCA employees that the number today would be over 10 T's today.

He has two posts on this board about 10 T's  from GCA  . Since he is at ground zero and in the business his opinion is quite valuable

[Palm]

I really don't think getting another report done now will do much. By the time they mobilize, get the work done and get a report done we will have hopefully closed on the deal, gotten the $613 million and maybe even have a rig or two turning. That's what the market wants. A closing, activity and some results. As soon as they would get a new report done it would possibly be outdated by any new preliminary or final results. IMHO the pps will start moving up with the closing and activity and more clarity on the deal.