Are we there yet !?!

[johnwgrant]

Another Title:   "How many weeks to test a dry hole?"

Another Title:  "If you flare gas in the jungle, and there is no one there to see it, did you really find gas?"

Out of all these tongue-in-cheek titles, I do have a question...          If InterOil has found gas and does a Drill Stem Test (DST), will the "big players" be able to see the flare via satellite?   Or is that too "James Bond"?

[ArtM72]

Another Title: Dollar Dispute Delays Discovery

With no additional projected incentive comp for Hession beyond the money earned for the SPA closing is it possible Hession is holding back on drilling results to bolster his case the discoveries at current well sites are his and not Holland's? A little far fetched, but then so is Hession's getting the sole bonus for discoveries in inherited prospects.

[johnwgrant]

Another Title: Dollar Dispute Delays Discovery With no additional projected incentive comp for Hession beyond the money earned for the SPA closing is it possible Hession is holding back on drilling results to bolster his case the discoveries at current well sites are his and not Holland's? A little far fetched, but then so is Hession's getting the sole bonus for discoveries in inherited prospects.

If I thought Hession was "petty" enough to play these kind of games regarding his bonus - I would sell in a heartbeat.

It is much more likely that once again we are on PNG time - and they are testing before releasing any results.

My hope is that the longer it takes to announce the results, the "better" the results are !       (Doesn't take long to wireline log and abandon a dry hole !)

[Getitrt2]

Another Title: Dollar Dispute Delays Discovery With no additional projected incentive comp for Hession beyond the money earned for the SPA closing is it possible Hession is holding back on drilling results to bolster his case the discoveries at current well sites are his and not Holland's? A little far fetched, but then so is Hession's getting the sole bonus for discoveries in inherited prospects.

That is ridiculous!  I cannot believe you would even throw that out there.  The previous "owners" of all these remaining "inherited prospects" have had them for eleven years without getting them drilled, and Holland is getting paid for his role, as CEOs and the Board have determined appropriate.  Since when have CEOs not reaped the lion's share of incentive rewards?  (Not saying everything is as it should be.)

[oilmd9]

Does seem like they are holding back drill results--thought Wahoo was not very deep.

[Kaliboo]

Does seem like they are holding back drill results--thought Wahoo was not very deep.

Given this was supposed to be a 60 day well to drill and test, this must mean they have had significant hole problems.  They probably have had at least one sidetrack.  Also the evaluation operations may have had problems and/or they may have needed to modify and extend the plan.  This might be the case if they have 2 or more separate zones to test.

One thing for certain.  This is not a problem-free dry hole.  So at least one bad outcome can be ruled out.

[johnwgrant]

Does seem like they are holding back drill results--thought Wahoo was not very deep.

Given this was supposed to be a 60 day well to drill and test, this must mean they have had significant hole problems.  They probably have had at least one sidetrack.  Also the evaluation operations may have had problems and/or they may have needed to modify and extend the plan.  This might be the case if they have 2 or more separate zones to test.

One thing for certain.  This is not a problem-free dry hole.  So at least one bad outcome can be ruled out.

Hmmm....   So, it could be a problem-plagued dry hole ?      

I am quoting from Hession at the conference call 3 weeks ago:

We continue drilling operations at all three wells, Wahoo, Raptor and Bobcat. And we are proceeding with the appropriate level of caution as we drill through the Orubadi shale. Progress is good at Wahoo and Raptor. The Bobcat drilling conditions are proving to be difficult and we are now on our second sidetrack in that well. At this stage, we have nothing more to report but we’ll of course disclose results as soon as we have them.

My interpretation of these remarks is this:  1) They had NOT sidetracked (at least as of 5/14/2014) either Wahoo or Raptor.  Otherwise, Hession would have 'fessed up to the problem when he told of Bobcat's problems.

2) They had not broken through the Orubadi shale at Wahoo or Raptor - but they were probably close to this point at Wahoo.   (strictly an inference that could be a poor read on my part).

3) Not being in the target zone yet, they had no definite information to share with the public.

Lastly - not based on his remarks but rather on the 3 weeks that have since transpired...     My expectation is that they are in the target reservoir at Wahoo and running tests - but they have not yet done a DST (if in fact they plan on doing a DST).    Why do I say that?   If they had run a DST with the resulting flare, our big shorts (and maybe our big longs) with millions of dollars at stake would be covering/buying based on the flare.   Even if they don't run a DST, the news will leak out - not from InterOil but from our friendly PNG government.   The PNG Energy Department is kept up-to-date on drilling results and must approve DST's (or approve the lack of DST's).   If this last statement is NOT correct, please feel free to chime in.   It is based on comments made by InterOil on several other wells where they performed multiple tests including DST's at the "request" of the government.   IE, the PNG government must "release" the rig from a well site and will only do so after sufficient testing is completed (and they define "sufficient".

[johnwgrant]

BTW, my comments about the PNG Department of Petroleum & Energy are based on "Duma"-era observations/information.

It is entirely possible that the new leadership under Duban is as tight-lipped as Hession - and cooperative as can be with InterOil... Time will tell

[admin]

One thing that might be a consideration is that these are at least two new crews (and drills), while I expect them to be experienced, but perhaps less so in the rather demanding circumstances there and perhaps the potentially vexing risks involved (Elk1, the original discovery well, had really serious problems, almost blew up, and wasn't drilled to planned depth).

But of course, this thought is brought to you by a complete non-specialist in the field..

[Kaliboo]

One thing that might be a consideration is that these are at least two new crews (and drills), while I expect them to be experienced, but perhaps less so in the rather demanding circumstances there and perhaps the potentially vexing risks involved (Elk1, the original discovery well, had really serious problems, almost blew up, and wasn't drilled to planned depth). But of course, this thought is brought to you by a complete non-specialist in the field..

I agree completely with the last postings.  I didn't want mention the ugliest outcome possible but you nailed

it.