Raymond James research today

[jft310]

https://raymondjames.bluematrix.com/docs/pdf/8ba4f70c-3711-4402-ba8d-9a76f36b4061.pdf

[AU74]

RJ says CVRs based on 2P resource.  Press release says 2C.  Which is correct?

Likewise Press release says CVR is based on everything over 6.2 T, other reports say 6.5.

Is this just sloppy analysis and reporting or is there reason to question the accuracy of the press release?

[AU74]

Related question. Press release says "gross certified 2C resource". I remember previous discussions on the TOT payment due to IOC upon certification being based on recoverable resources, not gross resources. Is this difference as significant as it seems?

[2126]

Payment on "2C resource greater than 6.2 tcfe" per Footnote 2; page 5, IOC Presentation per OSH/Total deal.

Also "One-time cash payment per IOC share equal to US$.77/mcfe (gross basis, US$.99/mcfe on net basis of 40.1275% of interest in PRL 15" per Footnote 2 also.

Also on Page 5 "Uncapped cash payment of approx US$6.05 per share for each tcfe gross resource certification of PRL 15 above 6.2 tcfe."

[ArtM72]

". While this isn't how we expected the InterOil movie to end, it's a mostly happy ending nonetheless."

Thanks, RJ, we needed to be reminded there was no value assigned to 6 Ts at TBR or 300 million other acres adjacent to PRL15.

I bet the deal was struck in the quarter prior to Antelope South being dropped from mention in the quarterly conference call.

[Putncalls]

Yea. It is significant and RJ is using the 10.2 GLJ Tce number to calculate a CVR of 24$.

[sageo]

Payment on "2C resource greater than 6.2 tcfe" per Footnote 2; page 5, IOC Presentation per OSH/Total deal.

Also "One-time cash payment per IOC share equal to US$.77/mcfe (gross basis, US$.99/mcfe on net basis of 40.1275% of interest in PRL 15" per Footnote 2 also. Also on Page 5 "Uncapped cash payment of approx US$6.05 per share for each tcfe gross resource certification of PRL 15 above 6.2 tcfe."

  2126 - Are you interpreting page 5 to truly mean " gross resource certification of PRL 15 " ? If that is true,then Ant South and Mule Deer would fall into the total tcfs,would they not ?
Seems to me they would, but I may be missing something . Thanks for all your comments on our board.

[Palm]

Certification by def is only paid on AE; Ant S and others not unless they communicate with AE.

[2126]

Payment on "2C resource greater than 6.2 tcfe" per Footnote 2; page 5, IOC Presentation per OSH/Total deal.

Also "One-time cash payment per IOC share equal to US$.77/mcfe (gross basis, US$.99/mcfe on net basis of 40.1275% of interest in PRL 15" per Footnote 2 also. Also on Page 5 "Uncapped cash payment of approx US$6.05 per share for each tcfe gross resource certification of PRL 15 above 6.2 tcfe."

  2126 - Are you interpreting page 5 to truly mean " gross resource certification of PRL 15 " ? If that is true,then Ant South and Mule Deer would fall into the total tcfs,would they not ?
Seems to me they would, but I may be missing something . Thanks for all your comments on our board.

Good question, Sageo. But I really don't know exactly what IOC is referring to by describing this as "gross resource certification of PRL 15". If it means what it says (?), then yes, that would mean that IOC has negotiated for a larger payment parameter than simply the Interim Resource Certification which only encompasses E/A. If true, this would be a nice upside to this deal, as would an interpretation that defines "gross resources" as all resources, rather than just recoverable resources. It would seem that the 'plain language' interpretation of this statement by IOC in the presentation would be clear, but parts of this deal are anything but clear.

[AU74]

2126 - Are you interpreting page 5 to truly mean " gross resource certification of PRL 15 " ? If that is true,then Ant South and Mule Deer would fall into the total tcfs,would they not ?
Seems to me they would, but I may be missing something . Thanks for all your comments on our board.

Would be nice, but the IOC Press release says "In addition, the CVR entitles holders to a contingent cash payment that is linked to the volume of 2C hydrocarbon gas resource certified to be contained in the Elk-Antelope fields. Each CVR will deliver approximately US$6.05 per InterOil share for each tcfe above 6.2 tcfe gross certified 2C resource in the Elk-Antelope fields, and will be paid in cash upon completion of the certification process. The CVR provides InterOil shareholders with an uncapped additional payment, depending on the size of the certified 2C resources in the Elk-Antelope fields"

Note that they explicitly limit this to E/A, in three separate sentences.  Not sure how they could certify anything in Antelope South or Mule Deer anyway.  At least it says it's the gross amount of gas in both the press release and the presentation.