A7

[jft310]

Most of the wells have taken 60 days not all . Many times they take off the top of mountain to get a level area . Not easy . Gotta bring in Equip etc. How long for 7 unknown we don't have a site yet . Might start with that info where's the site before discussing time lines .

[petrengr1]

Someone whispered to Morgan Stanley that Antelope-7 will be a southwestern step out from Antelope-5. If you look at the map at http://tinyurl.com/p5bttdy slide 6, I expect the well location to be about 1.5 km southwest of Antelope-5 and probably near the -1,500 meter contour line.

[ArtM72]

Well the question is, is it worth a $400 milllion to a little over a billion to delay a year or 9 months. Is that worth the gamble? Will they have the revenues to sustain through that period? Lot of unknowns.

The gamble is the present value of the newly-found 2T minus the present value of a producing LPG plant evalulated for the one year delay minus the present value of the corresponding reduction in the balancing certification whenever that certification is called for by IOC.  I haven't done the math but  there would likely have to be some extraordinary combination of interest rates necessary to provide an economic justification for drilling A7.

A far more rational well location drilled to assure gas would be available to justify 10 MTPA would be Antelope South or the eastern flank of Raptor.  Either would be carried. Either could potentially provide 3 TCF.  All they need is a test well.  And likely both sites have been cleared.

An additional 2 Tcfe would provide huge "economic justification" for drilling A7.  Neither Antelope South nor Raptor would provide the additional certification being discussed per the SPA.  Raptor would not be carried, and I feel sure neither site has been cleared.

You may have missed my point.  The value of bonus for finding 2 additional Ts by drilling A7 is offset by delaying the base project by a year.  That delay has a significant economic cost when companies are looking for 15% ROI and use that number to discount future cash flow.  Further, those 2Ts would ultimately have been paid for, albeit at a lower effective cost due to the discounting on the follow-up certification.

What gets me is this.  For years I've heard what is really needed to determine reservoir volume is drawdown pressure tests. Now that we have them they aren't valid?  What good are pressure drawdown tests if not to measure total reservoir volume?  If E/A was a tight and possibly compartmentalized reservoir than maybe gas in out pockets might not show and the pressure tests would not be accurate.  But E/A has very high permeability thus should provide highly accurate data.

After all the calcs are done I bet the economics don't work.

Either Antelope South or the eastern end of Raptor (which appears to be in PRL15) would classify as the discovery well.   I think we've all just assumed the discovery well would be Antelope South.

[sageo]

Someone whispered to Morgan Stanley that Antelope-7 will be a southwestern step out from Antelope-5. If you look at the map at http://tinyurl.com/p5bttdy slide 6, I expect the well location to be about 1.5 km southwest of Antelope-5 and probably near the -1,500 meter contour line.

Pet - After reviewing slide 6 and looking again at the rise in elevation to the sw of Ant 3,what do you think about #7 in that direction approximately 1.2 kms to 1.4 kms away ?  As you have stated before in your (very wise) posts, it should (eventually) take at least 3 more westward wells to determine the greater amount of tcfs in E/A . If I may speak for other bms as well as myself,thanks again for all your work ( and sharing) .

[Palm]

My "bm" speaks for itself on a daily basis.

[jft310]

Hessian seems to believe one well could add 1-3 T's . That's one heck of a well . GCA with a successful well would be forced to give some credit for the proving of the fault line further West . We need certainty quickly drill or no drill and would we use both of Interoil's HA rigs to drill both wells simutaneously or one at a time ???IR states Interoil prefers simutaneous but now we await the other votes .

[sageo]

My "bm" speaks for itself on a daily basis.

 Good one,Palm ...ha,ha ."And very well it should" !  A little humor is good from time to time....helps to ease the waiting ( and more waiting) . Hagd.

[petrengr1]

Someone whispered to Morgan Stanley that Antelope-7 will be a southwestern step out from Antelope-5. If you look at the map at http://tinyurl.com/p5bttdy slide 6, I expect the well location to be about 1.5 km southwest of Antelope-5 and probably near the -1,500 meter contour line.

Pet - After reviewing slide 6 and looking again at the rise in elevation to the sw of Ant 3,what do you think about #7 in that direction approximately 1.2 kms to 1.4 kms away ?  As you have stated before in your (very wise) posts, it should (eventually) take at least 3 more westward wells to determine the greater amount of tcfs in E/A . If I may speak for other bms as well as myself,thanks again for all your work ( and sharing) .

Sageo- The location that I describe above is based on a comment from the latest Morgan Stanley report. http://tinyurl.com/ncxonat : " Hence, the IOC/TOTJV is again considering Ant-7 as a southwestern step-out beyond Ant-5."

It all depends on the objective we are trying to achieve. Of course we are both assuming the map at  http://tinyurl.com/p5bttdy slide 6 is correct. The location you describe sw of Antelope-3 would have a thicker pay zone and would come in higher than the location that I describe sw of Antelope-5. I think the objective we are trying to achieve is to prove the area to the West is not only high but also on the East side of the fault. In other words we want to prove that the thick pay zone of the field extends further to the West than previous maps indicated. The location being considered by the JV partners is further West than the location that you describe. The location further to the West will have a better chance of cutting the fault and thus be the first step in proving the location of the fault. If Antelope-7 cuts the fault then Antelope-8 might be North of  Antelope-7 and Antelope-9 might be North of Antelope-8. If all three wells cut the fault then they can identify the location of the fault. If none of the wells cut the fault they can drill more wells further west until they locate the fault. If Antelope-7 does not cut the fault then they may choose to drill Antelope-8 nw of Antelope-7 instead of North. In other words we would like to have a firm location for the fault.

This may just be for the benefit of the grandkids.

Have a good day!

[Getitrt2]

Well the question is, is it worth a $400 milllion to a little over a billion to delay a year or 9 months. Is that worth the gamble? Will they have the revenues to sustain through that period? Lot of unknowns.

The gamble is the present value of the newly-found 2T minus the present value of a producing LPG plant evalulated for the one year delay minus the present value of the corresponding reduction in the balancing certification whenever that certification is called for by IOC.  I haven't done the math but  there would likely have to be some extraordinary combination of interest rates necessary to provide an economic justification for drilling A7.

A far more rational well location drilled to assure gas would be available to justify 10 MTPA would be Antelope South or the eastern flank of Raptor.  Either would be carried. Either could potentially provide 3 TCF.  All they need is a test well.  And likely both sites have been cleared.

An additional 2 Tcfe would provide huge "economic justification" for drilling A7.  Neither Antelope South nor Raptor would provide the additional certification being discussed per the SPA.  Raptor would not be carried, and I feel sure neither site has been cleared.

You may have missed my point.  The value of bonus for finding 2 additional Ts by drilling A7 is offset by delaying the base project by a year.  That delay has a significant economic cost when companies are looking for 15% ROI and use that number to discount future cash flow.  Further, those 2Ts would ultimately have been paid for, albeit at a lower effective cost due to the discounting on the follow-up certification.

What gets me is this.  For years I've heard what is really needed to determine reservoir volume is drawdown pressure tests. Now that we have them they aren't valid?  What good are pressure drawdown tests if not to measure total reservoir volume?  If E/A was a tight and possibly compartmentalized reservoir than maybe gas in out pockets might not show and the pressure tests would not be accurate.  But E/A has very high permeability thus should provide highly accurate data.

After all the calcs are done I bet the economics don't work.

Either Antelope South or the eastern end of Raptor (which appears to be in PRL15) would classify as the discovery well.   I think we've all just assumed the discovery well would be Antelope South.

We do not know that the "base project" would be delayed by a year, and I do not think it would.  I think an additional billion dollars cash in less than a year would be hugely positive for IOC and its future and its stock.  I think there are significant questions left about the fault that could affect the certification, and would be interested in Pet's comments on your comments about the need for A7.  I'll go with the judgment of IOC's experts on all this.

The PRL 15 discovery well has been specifically and consistently identified as Antelope South by management, and I have heard no one else suggest it should be anything else.

[sageo]

Someone whispered to Morgan Stanley that Antelope-7 will be a southwestern step out from Antelope-5. If you look at the map at http://tinyurl.com/p5bttdy slide 6, I expect the well location to be about 1.5 km southwest of Antelope-5 and probably near the -1,500 meter contour line.

Pet - After reviewing slide 6 and looking again at the rise in elevation to the sw of Ant 3,what do you think about #7 in that direction approximately 1.2 kms to 1.4 kms away ?  As you have stated before in your (very wise) posts, it should (eventually) take at least 3 more westward wells to determine the greater amount of tcfs in E/A . If I may speak for other bms as well as myself,thanks again for all your work ( and sharing) .

Sageo- The location that I describe above is based on a comment from the latest Morgan Stanley report. ">http://tinyurl.com/ncxonat : " Hence, the IOC/TOTJV is again considering Ant-7 as a southwestern step-out beyond Ant-5."

It all depends on the objective we are trying to achieve. Of course we are both assuming the map at  http://tinyurl.com/p5bttdy slide 6 is correct. The location you describe sw of Antelope-3 would have a thicker pay zone and would come in higher than the location that I describe sw of Antelope-5. I think the objective we are trying to achieve is to prove the area to the West is not only high but also on the East side of the fault. In other words we want to prove that the thick pay zone of the field extends further to the West than previous maps indicated. The location being considered by the JV partners is further West than the location that you describe. The location further to the West will have a better chance of cutting the fault and thus be the first step in proving the location of the fault. If Antelope-7 cuts the fault then Antelope-8 might be North of  Antelope-7 and Antelope-9 might be North of Antelope-8. If all three wells cut the fault then they can identify the location of the fault. If none of the wells cut the fault they can drill more wells further west until they locate the fault. If Antelope-7 does not cut the fault then they may choose to drill Antelope-8 nw of Antelope-7 instead of North. In other words we would like to have a firm location for the fault.

This may just be for the benefit of the grandkids.

Have a good day!

Pet - "Words of wisdom " . No wonder you are smarter than this " old dude" " border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/wink.gif" /> Makes a lot of sense...trying to locate just how far to the west the field goes (and hit more gas at the same time) . Thanks for putting me back on the right track ! Best & good health to you.