Hession and Jan 31st 2014

[jft310]

Dr Mike set out two dates on the call announcing the deal . He stated Minority interest IPI

settled by end of Jan 2014. There is no way Interoil would make a deal to commit $100's of

millions to buy out the minority without written PNG govt approval of the project. We have all govt

parties stating they approve the deal . I assume we need a signed amended gas agreement endorsed by

the NEC to have the official approval. If your not getting that agreement then why buy out the minority interest.

To me it's Domino's lined up ready to fall :

Domino One -written govt approval

Domino Two- minority interest buy out

Domino Three- Close Total deal

No reason to think some can't happen at the same time

The second date given on the call was close Total by the end of March.

Can't close without Domino one and two falling.

This means news can come next week or right after for govt approval .

[Palm]

Agree for most part but some clarifications needed.
Government Approval is more than one thing:
1. Gas Agreement- Can come at any time and Duma hinted that it could come quickly now that Total has been chosen. This Agreement lays out parameters on how project must proceed, etc. Starts the clock ticking and requires performance.
2. Per the SPA the approvals required are a) approval of the SPA and b) approval of the PRL transfer (defined as 61.3% put in Total's name)
3. Licence renewals

To close with Total there are basically 2 conditions:
1. Approvals per 2 above
2. PacLng Interests acquired directly or indirectly by IOC.

I can see the Gas Agreement being approved most any time in this with specific parameters and ranges included.
Also can see the SPA being approved most any time by the Gov
However, IOC will not request the PRL 15 transfer into Total's name most likely until after the IPI Settlement. They now own approx 76% of PRL 15 (with PacLng Interests owning balance) and could request the PRL transfer of 61.3% to Total, but that's risky for obvious reasons.

IPI "dominoe" needs to fall, but could come after Gas Agreemnt approval. It's in IOC's best interest IMHO to settle it before, again for obvious reasons.

[Getitrt2]

The SPA is contingent on government approval, which of course is expected. I would think the minority interest agreement could be as well.

[ArtM72]

It seems to me that the JVOA also has to have government approval. As a part of the SPA agreement there is also the need for that to be finalized.

[Palm]

Since the "PRL JOA" is part of the SPA, that's a given. The reason being that the SPA states that within 3 business days "after the date of this agreement" (Dec 6, 2013 per the SEDAR filing) the "Approval Documents" must have been submitted "for assessment to stamp duty under the Stamp Duties Act (Chapter 117)", so that would already have been done. How long that takes to get back I have no idea. But once it's back the Buyer (Total) "Promptly, and in any event within fifteen (15) Business Days after the Approval Documents have been stamped under the Stamp Duties Act (Chapter 117), the Seller must submit the Approval Documents for approval by the Minister and registration under the Act, on the basis that the Approval Documents are each registrable against the interests to which they relate."

So this is somewhere in process and again refers to the SPA and the PRL 15 Transfer.

[jft310]

See again we prove together we are stronger.

[ArtM72]

When was the Duma timeline meeting scheduled with IOC and Total?

[Palm]

This was the article where Duma mentions project

PNG govt hastens LNG project

From POST COURIER/PACNEWS

News

Wed 08 Jan 2014

PORT MORESBY, PNG --- The Papua New Guinea Government will be meeting with InterOil and Total SA to set a time-line in fast tracking the LNG project in Gulf Province.

Minister for Petroleum and Energy William Duma said the ELK-Antelope project has been delayed for more than four years and since InterOil has selected an operator in Total SA, the Government expects the project developed quickly.

“Now that they have selected an operator, Total SA of France, we expect InterOil and Total to develop and commercial the gas resource reserves we have quickly.”

“We have seen this project delayed for more than four years since we signed the gas agreement in 2009. We expect Interoil and Total to fast track this project.”

Duma said the country will see three gas projects come on-stream by the end of the year with ExxonMobil LNG project to export the first gas by July/August.

“We also have another smaller gas project, Stanley gas project being developed by Horizon Oil in Western Province and the Elk Antelope project in Gulf Province.

“I will be opening the development forum on January 20 and we expect cabinet to approve the gas agreement, one in Gulf and Western provinces.”

“Before the end of this year we will have three LNG projects, first the ExxonMobil, InterOil and Stanley project.”

“We will be meeting them this month and we will be giving them some timelines, they have gone into this arrangement with Total and that was done before Christmas and we have asked them to meeting to move the project forward.”

Duma said that the Government is looking at two years at the most to have the project developed.

“Most of the work has been done and all they have to do is to review it and revise their program.”

In the petroleum sector, Duma said there have been some new discoveries of oil in the Gulf Province and InterOil are doing more appraisal drilling to ascertain the exact size of the resource whether its is big enough to warrant development.

“The Department of Petroleum and Energy is doing its bit and we expect other economic ministers and departments to do likewise to expand the revenue base of this country,” Duma said.