3 New Incremental Positives From Earnings Release
1) First and long-awaited confirmation from the company that the bidders involved in final discussions include multiple majors and an NOC - "Our investment banking advisors and the Company are in final discussions with multiple parties, including major oil companies and a national oil company, each of whom we believe, if chosen, would satisfy the PNG government's objectives."
2) Deferral of well commitments for PPL's 236 & 238 - "To progress development of our core assets, we applied for variations to modify the well commitments for PPL 236 and PPL 238. On March 28, 2013, the Minister for Petroleum & Energy approved and the DPE registered the deferral of the well commitments for PPL 236 and PPL 238." This not only removes a near-term bear case on the potential loss of this highly prospective acreage but also it implies a very strong relationship with the DPE and Duma heading into the consummation of a sell-down of PRL15.
3) Fully funded seismic program by Oil Search over the Triceratops basin - "These discussions relate to access within PPL 237 for a joint seismic program over both licenses with a tie to the Triceratops structure. It was agreed that we will conduct the joint seismic program which will be fully funded by Oil Search." This implies that Oil Search considers Triceratops to be a major discovery and sets the stage for gas from reservoir to underpin OSH/XOM's PNG LNG project.
The operating results were also strong and liquidity was more than adequate heading into the final partner selection stage, which the company seems to be quite optimistic about. I think that this release will alleviate a lot of concerns and tomorrow has the potential to be very positive for the stock with a clear and constructive call