Antelope-7 Back on the Table. MS update

[Palm]

Back on August 20 I laid out this potential very aggressive schedule of going ahead with Ant 7. Was told I was probably a good bit off.....

"A week ago High-Arctic released 2Q 2015 earnings and one of the comments related to Rig 116: "Rig 116 recently arrived in PNG and upon clearing customs will be mobilized to a yard where it will stay until the customer completes their assessment of several different drilling locations to determine the first well site. The rig will collect stand-by revenue in accordance with the terms of the contract until it commences drilling, which is expected in early in 2016, at which time the two year contracted term will begin."

So let's say 1Q 2016 and pick Feb 1 as spud date. If we use the very quick schedule of Ant 5 for Ant 7:
1. Took 64 days to get to TD (Feb 24th)- gets us to Apr 5th
2. Total Testing was done approx. Apr 15 since they started the flow test Apr 27 with Ant 5; 47 days- gets to approx. May 22
3. Flow testing done for a couple of weeks; gets us to Early June (5th or so).
4. Say they immediately Under Part 6 move into Certification. Must each nominate Expert within 20 days- Let's say 10. Gets us to mid-June.
5. Experts have up to 90 days to get report done. They fly and take 45 days. Gets us to End of August.
6. Each Party to SPA has up to 14 days to make formal submissions. Let's say 7 days. Gets us to first week of Sept.
7. Experts have 7 days to respond. Let's say 3. Gets us to approx. Sept 10.
8. Payment must be made within 10 business days- Whew! with a near-perfect schedule we MIGHT get Certification pmt near end of Q3. Maybe.

I think based in High-Arctic's statement (owners of the rig), using Rig 116 and with a very aggressive drilling, testing and Certification process we have a shot at hitting the 3rd qtr with Certification."

Sigh........

[Getitrt2]

I do not know for sure, of course, but I'll make a prediction. The JV will drill an Ant 7, and drill it with Rig 116, currently on "standby" with the two-year lease not starting until first spudding, so that Ant 7 can be spudded without waiting for the Rig 115 from Ant 6, unless Ant 6 goes so fast that Rig 115 is available when the Ant 7 site becomes available (doubtful). Then, the first available rig will probably go to Ant South.

[Putncalls]

They have to make a decision and then prepare a drill site first. That take time also. They may also wait for A6 data before making a decision.

[jft310]

What Getit posts above is a possible scenario painted by IR . The market would like 2 wells at a time . Now is that what they decide ????

[Palm]

Has IR said whether anything has been done on the well site prep for Ant 7? If they haven't started yet (which is likely the case), my scenario above (just over 7 months) with perfect execution required barely gets us in at the end of Q3. Same scenario for Ant 6 puts us in early Q3.

[Gator]

According to the May 12, 2015 investor presentation, certification was going to be Year End 2015.
Four weeks later on June 9, the certification was pushed back to Q1 2016.
Two months later on August 13, the new certification payment was expected "mid-year" 2016.
Three months later on November 13 InterOil says they are "Fully Focused" on receiving the payment in 2016.

Their timeline has truly been one month forward, two month delay. They have stated that the payment will be 4-6 months after the completion of appraisal drilling.

[Palm]

And on the CEO statement still on the main page of the website he says that concept design would probably be complete in early 2016, "when appraisal of the Elk-Antelope field has been completed............................"

Must be banana picking season in PNG; peels all over the place.

[Getitrt2]

They have to make a decision and then prepare a drill site first. That take time also. They may also wait for A6 data before making a decision.

I agree about the decision and site, but I feel sure they will not wait for A6 data.  A6 is on the opposite East side of Antelope and I think is irrelevant to A5 and A7.  Go back to Hession's response to Calio's first question in the cc transcript.  I think he's talking about completing the analysis of A5 and A4 data to select a proposed A7 location, and to present to and make the decision with the JV.

[jft310]

Palm- I have heard nothing about Ant 7 site selection or certainly nothing about site preparation . Nada.. We all agree the timeline has slipped !!
But what helps the price per share will be the 3 reservoir estimates before Total estimates . One maybe will help is when we get the new Feb 2016 GLJ maybe ?????Certainly the GCA and NSAI reports where Oil Search pays PACLNG has some level of public disclosure . At a minimum we hear the amount of the payment which gets us a size estimate . That's an important number not to be ignored .
We will get paid off the Total extimate which might include an Ant 7 result plus whatever GCA and NSAI computed . When for that is unknown today .

[Palm]

I really don't think GLJ will do much as they have no say in Certification. Their prior case has been basically ignored and an updated estimate will include through 4 and 5 at most. Most likely they will have a nice bump in their estimate, but IMO it will get noticed and yawned at for any sustained effect on PPS.

OSH's Certification for PAC LNG owners may help some, but again will be with 4 and 5 most likely. With IOC moving so many target dates my gut is that when Certification is finally called for we will see the needle move. Have grown to understand that when it will be reflected in the financials, it will be real.