XOM bails on NGE deal

[maui4marko]

>> XOM got all they needed from IOC?!?

SALE OF INTEREST IN PPL 269 TO ESSO NOT TO PROCEED  
 

 28 August 2013
 

New Guinea Energy Limited (NGE) refers to its announcements of 26 July 2013 and 23 August 2013 regarding the proposed sale of its 50% participating interest in Petroleum Prospecting Licence (PPL) 269 to Esso PNG Robin Limited (Esso), a subsidiary of Exxon Mobil Corporation (Sale Agreement). Esso has advised NGE that it has been unable to reach alignment on a number of confidential commercial matters (which have not been disclosed to NGE) with the other joint venturers in PPL 269 and that Esso will not be proceeding with the Sale Agreement.

As the sale of NGE’s interest in PPL 269 to Esso will not be proceeding, consistent with NGE’s strategy of monetising gas assets to focus on exploration for oil in Papua New Guinea, NGE intends to re-engage with other parties who have approached NGE in connection with the possible acquisition of NGE’s interest in PPL 269. NGE will keep the market informed of any developments.

Should you have any queries, please contact the Company Secretary on +61 2 9252 0010.
 
Michael Arnett
Chairman

[cybersssss]

This appears to be a very promising sign that Esso PNG is planning on completing the SPA deal with IOC. They obviously need more gas and exploration. Oil Search does not have it yet and not for a while.

Great find!

[Palm]

Means nothing other than they couldn't get other parties to agree. Could actually be negative for IOC if that trend continues.

IOC just needs to get a deal done.

[Resourcearb]

I believe this confirms that Exxon has diverted its focus from P'nyang underpinning a 3rd or 4th train to Elk/Antelope supplying the PNG LNG expansion.  The purchase of a 50% stake in PPL 269 from NGE would have provided Exxon with a cheap option to expand its resources surrounding P'nyang, and its decision not to close this deal could be an important positive datapoint.  Why would Exxon have conducted due diligence on PPL 269 and indicated its desire to proceed with the proposed transaction, then suddenly pull out?  Were there really insurmountable disagreements on commercial matters with Talisman?  Even if there were some disagreements with Talisman, if Exxon believed that P'nyang contained 3+ Tcfe of resources that would underpin an additional PNG LNG train, it's hard to imagine it wouldn't have consummated this transaction with NGE.  Maybe the proposed NGE transaction was just a ploy by Exxon to make InterOil think it had other options?  Maybe the deal between Exxon and InterOil is effectively done, so the ploy has now been dropped?

With P'nyang being the most prospectivel field in which to develop a significant resource outside of PRL 15 (or InterOil's PPL's), Exxon seems to be screaming to the world that it expects to close a deal with InterOil.

[CAC]

[quote='Resourcearb' pid='28045' dateline='1377652885']

I believe this confirms that Exxon has diverted its focus from P'nyang underpinning a 3rd or 4th train to Elk/Antelope supplying the PNG LNG expansion.  The purchase of a 50% stake in PPL 269 from NGE would have provided Exxon with a cheap option to expand its resources surrounding P'nyang, and its decision not to close this deal could be an important positive datapoint.  Why would Exxon have conducted due diligence on PPL 269 and indicated its desire to proceed with the proposed transaction, then suddenly pull out?  Were there really insurmountable disagreements on commercial matters with Talisman?  Even if there were some disagreements with Talisman, if Exxon believed that P'nyang contained 3+ Tcfe of resources that would underpin an additional PNG LNG train, it's hard to imagine it wouldn't have consummated this transaction with NGE.  Maybe the proposed NGE transaction was just a ploy by Exxon to make InterOil think it had other options?  Maybe the deal between Exxon and InterOil is effectively done, so the ploy has now been dropped?

With P'nyang being the most prospectivel field in which to develop a significant resource outside of PRL 15 (or InterOil's PPL's), Exxon seems to be screaming to the world that it expects to close a deal with InterOil.

***********

That's the positive spin, and it's quite plausible, but I also agree with Palm that, until we have a definitive deal, it is possible that the exact same story could be written tomorrow with IOC substituted for NGE.  I'm guessing NGE shareholders might have been just as confident of a deal with XOM (prior to that announcement) as we are.  It's time to stop talking about doing something...and time to actually do it.  Let's go, IOC.

[Palm]

Again RA not sure this has anything to do with plans with IOC directly. Talisman is the operator of PPL 269 and they have very clear plans to aggregate gas and liquids for their own projects in Western Province. This deal from the start had a very small chance of happening because of that. There were several specific items that Esso had to get Talisman to agree to and chances were pretty slim it would happen.

XOM is going after any gas it can get in its aggregation plan. Some will happen and some won't. Talisman, Horizon and others are somewhat quietly pulling together some nice discoveries for the Western Province project.

IOC needs to make the deal happen. They have it and XOM wants it. Seems easy.

[ebster123]

Means nothing other than they couldn't get other parties to agree. Could actually be negative for IOC if that trend continues. IOC just needs to get a deal done.

Again RA not sure this has anything to do with plans with IOC directly. Talisman is the operator of PPL 269 and they have very clear plans to aggregate gas and liquids for their own projects in Western Province. This deal from the start had a very small chance of happening because of that. There were several specific items that Esso had to get Talisman to agree to and chances were pretty slim it would happen. XOM is going after any gas it can get in its aggregation plan. Some will happen and some won't. Talisman, Horizon and others are somewhat quietly pulling together some nice discoveries for the Western Province project. IOC needs to make the deal happen. They have it and XOM wants it. Seems easy.

I would use seems logical instead of seems easy

[Palm]

No, easy is the right word

[trans]

I believe this confirms that Exxon has diverted its focus from P'nyang underpinning a 3rd or 4th train to Elk/Antelope supplying the PNG LNG expansion.  The purchase of a 50% stake in PPL 269 from NGE would have provided Exxon with a cheap option to expand its resources surrounding P'nyang, and its decision not to close this deal could be an important positive datapoint.  Why would Exxon have conducted due diligence on PPL 269 and indicated its desire to proceed with the proposed transaction, then suddenly pull out?  Were there really insurmountable disagreements on commercial matters with Talisman?  Even if there were some disagreements with Talisman, if Exxon believed that P'nyang contained 3+ Tcfe of resources that would underpin an additional PNG LNG train, it's hard to imagine it wouldn't have consummated this transaction with NGE.  Maybe the proposed NGE transaction was just a ploy by Exxon to make InterOil think it had other options?  Maybe the deal between Exxon and InterOil is effectively done, so the ploy has now been dropped?

With P'nyang being the most prospectivel field in which to develop a significant resource outside of PRL 15 (or InterOil's PPL's), Exxon seems to be screaming to the world that it expects to close a deal with InterOil.

ResourceArb......how about the "kinokudu" (sp) well being drilled right now by OSH?  This is the third well and believe OSH is going it alone on that one. Last update was around quarterly conf call by them and was down I believe 1-2 k at the time and going fairly fast?  Would appreciat a comment on that, or Peteng also......thanks , Trans

[sydbod]

 ResourceArb......how about the "kinokudu" (sp) well being drilled right now by OSH?

Are you thinking of "Kidukidu" ?, if so it will be only a small gas deposit of about 1.3 tcf or so should it pay out.