Oil Search bid for 237

[davidhmtk]

Is there a big offer from IOC to sell a large chunk of PPL 237 (Triceratops) to Oilsearch?  We know 2 facts:  PRE, our partner in 237, is unexpectedly anticipating receiving cash from the partnership position;  and Oilsearch is paying for seismic over the whole Triceratops structure, which extends slightly into their adjoining PPL338.  My question - why would they pay for all the cost unless they had been offerred the gas field at a price they felt was a little higher than they were comfortable paying?

[ArtM72]

By the presentation graphic it appears a significant but undetermined amount of Ttops is in 338. Given the seismics IOC has already performed on the structure, their willingness to provide OSH with that data for independent evaluation seems like an appropriate amount of consideration for the new seismic delineation work proposed by OSH. I suspect the end game will be two parties agreeing upon the percentage of gas and condensate in each PPL and thus providing the basis for a development agreement.

As for IOC selling all that gas field, page 21 of the Presentation made it very clear IOC was planning to sell down only part of E/A and engaging in a JV with its new partner(s). I doubt it would plan to follow a different path with Ttops and/or 237.

All good.

[davidhmtk]

By the presentation graphic it appears a significant but undetermined amount of Ttops is in 338. Given the seismics IOC has already performed on the structure, their willingness to provide OSH with that data for independent evaluation seems like an appropriate amount of consideration for the new seismic delineation work proposed by OSH. I suspect the end game will be two parties agreeing upon the percentage of gas and condensate in each PPL and thus providing the basis for a development agreement. As for IOC selling all that gas field, page 21 of the Presentation made it very clear IOC was planning to sell down only part of E/A and engaging in a JV with its new partner(s). I doubt it would plan to follow a different path with Ttops and/or 237. All good.

Art - Your thesis of the seismics as a precursor of a joint development is a reasonable explanation of fact 2, but does it explain fact 1?  PRE is expecting cash to come in:

Quoting Jairo Lugo (PRE SVP of Exploration): "Then in the case of Papua New Guinea, we have always said that it was opportunistic. We got really a very good discovery and I think that we'll be ready to monetize that. We understand that there is some sort of a beauty contest now between the majors to acquire those positions and we have a tagalong. So we will be able to make a new rapid cash on that property."

[ArtM72]

I suspect Ttops could see a partial sell down but following some additional delineation.

[TxPm]

I agree with David. Based on several of the comments today I believe we will see a SD of 237 either when the E/A SD or very shortly before/after. When asked about IOC's shares of costs Dave seemed hesitant to say anything and I gathered it wa becuse some type of SD was in the works

[Petro2458]

I disagree: I suspect IOC retains all of 237 until the seismic is done and wells are drilled to delineate. They'll want to maintain max equity going into unitization. I wouldn't put anything into the "monetization" comment from PRE ... except that the efforts at E/A are laying the ground work which will most certainly expedite LNG recognition from Triceratops.

HOWEVER - if the E/A SD process contemplates a company like Total also getting a chunk of 237..that's a different story.