We are circling around the PRE issue and maybe missing a few things. Why is PRE involved and what they are saying important?
1. Like WA and Henry and Dave Holland and Conrad Kerr and others who have come aboard, PRE has been amazed with the seismics and drilling results; very amazed.
2. They only have a 10% interest in PPL 237 but yet they are jumping around. We could understand if they were doing this because they want to justify a 30% or larger interest, but they are doing this while owning 10%. They have much larger interests in proven and producing areas of other countries, but this is 10% in unproven PNG.
3. They have just shown an aggressive drilling plan for PNG and the understanding is they will be doing the drilling as they have great experience in jungles of S America. 10 wells total from May through 2014. This is not cheap; figure $35 million per well. So that means IOC/PAC LNG will have huge cash calls. This tells me IOC is confident that the cash will be there for BOTH 237 and PRL 15; we should have great confidence in this fact.
4. JVOAs were just approved for these activities.
Put this together and what do we see?
