Oil Search Earnings Release and Presentation

[lazydogs]

The links to Oil Search's first half earnings release and presentation are available on the landing page of their website.

The link to the earnings release is:  http://www.oilsearch.com/Media/docs/140819%202014%20Half%20Year%20Results-7610f022-4ce7-49b7-932a-343bfc3e6484-0.pdf

Regarding IOC and PRL15 -  on page 3 of the earnings release they say, " The PRL 15 joint venture is presently scoping Concept Select studies and surveys, which are likely to assess a number of LNG development options, ranging from an integrated development at existing facilities through  to a greenfields LNG development. Given our extensive in-country operating experience and proven abilityto deliver, Oil Search will be seeking to provide leadership on a number of the Concept Select activities."

The link to their presentation slides is:  http://www.oilsearch.com/Media/docs/140819%202014%20Half%20Year%20Results%20Presentation-4a4ce508-5c77-41e5-8272-c8bea3441b54-0.pdf

On slide 31 they map two regions and say that they " Focus on aggregating gas in two hubs – NW Highlands and Gulf Basin - to underwrite additional LNG from PNG LNG Project andother LNG developments"  and "Upside in 1P reserves at Hides plus   substantial discovered undeveloped gas resources in NW area, upside being tested in PRL15"

Slide 36 is labled:  Elk/Antelope PRL 15 - Gulf Basin Gas Hub  - - they map how PRL 15 fits in with their other holdings and the bullet points are: 

» Acquired 22.8% gross interest in PRL 15, containing Elk/Antelope gas fields, in March 2014

» Largest undeveloped gas resource in PNG with significant exploration upside

» Acquisition in line with strategy to aggregate gas resources – complements offshore acreage position

» Arbitration hearing on dispute relating to sale of interest in PRL 15 from InterOil to Total SA, scheduled for November. Substantial additional value,if successful

Slide 37 is labled :   PRL15 Appraisal Program and provides an interesting map showing yellow outlines of what they project as the Raptor Field overlapping into PRL 15 and a yellow outline of Antelope Deep.  They also note the location of Bobcat.    

[Li'loilady]

Nice scouring, Dogs.  Thx for your first post.

[my2cows]

Average realised LNG and gas price (US$/mmBtu) 14.20  

Average realised oil and condensate price (US$/bbl)  111.57 

14.20 /mmBtu, wow! and the market is pricing IOC at what 60 cents / mmBtu

[jft310]

Hope Getit has time to read these comments from Oil Search which talk about integrated facilities. Lots of clues for this possibility odds still low me thinks.

[jft310]

Raptor overlaps PRL 15 goes back to Sal Illaqua former IOC analyst who made a comment they hope to prove all these fields communicate. Ancient seabed was one seabed not two or three seabeds.

[Palm]

Thanks lazy,

Here are live links:

http://www.oilsearch.com/Media/docs/1408...0f40-0.pdf

http://www.oilsearch.com/Media/docs/1408...1b54-0.pdf

http://www.oilsearch.com/Media/docs/1408...6484-0.pdf

[Getitrt2]

Hope Getit has time to read these comments from Oil Search which talk about integrated facilities. Lots of clues for this possibility odds still low me thinks.

I basically read it all, JFT.  I'd say there is much higher odds of sharing integrated facilities than of selling E/A gas to PNG LNG, for which I guess we agree odds are low.

[Getitrt2]

Maybe this from the Bernstein Report is what is meant by OSH by "an integrated development at existing facilities":

"While it is too early to have certainty about a robust cost estimate for Elk-Antelope, we can make some assumptions. Our starting point is that the capacity of the Elk-Antelope development will be similar to that of PNG LNG at around 6.8mtpa (2 x 3.4mtpa trains after debottlenecking)."

"We see scope for costs to be materially lower for Elk-Antelope relative to PNG LNG. For a start, the Elk-Antelope field is closer to the LNG site at Port Moresby. It does not require the same logistical support infrastructure. It could also benefit from synergies with the PNG LNG project, particularly at the liquefaction site. Elk-Antelope will also benefit from not having to compete with ten other projects being developed simultaneously in Australia, high steel prices and a strong Australian dollar, which were all symptomatic of the LNG boom in Australia between 2009-13.

In our analysis, we believe that there could be at least US$3bn in savings relative to the US$19bn PNG LNG project as highlighted below

- 300km of 32" pipeline at US$160,000 per inch per km = US$1.5bn
- Airfield at Komo in PNG Highland US$1bn
- Site preparation and shared utilities at Port Moresby (15% x US$1200/per ton x 6.8mtpa =
US$1.2bn of which InterOil could realize 50% through sharing the rest with PNG LNG)

The pipeline saving is obvious given that Elk-Antelope will not have to build a 300km pipeline through some of the most difficult rainforest in the world (Exhibit 28). We estimate the saving to be around US$1.5bn. Another area where InterOil can save money is through not building an expensive airport in the PNG highlands. The Elk-Antelope project is close to a river where equipment can be barged in, and then trucked to the field. The cost saving here is likely to be around US$1bn. Finally, InterOil will benefit from an LNG development at the brown-field LNG site at Port Moresby. Typically, 15%-20% of the cost of any green field LNG plant is in site preparation and utilities to which the InterOil project would benefit from. This would amount to US$1.2bn, which we assume would be shared equally (50/50) with the existing PNG LNG partners. While there could be additional savings through joint marine facilities, this would only apply in a one-train case. In a two-train case (which we think is more likely), then a new jetty would be required.

In case there are any doubts as to the scale of the PNG LNG liquefaction site for expansion, our visit there several years ago revealed that it is an extremely large LNG precinct with the possibility to accommodate up to 10 LNG trains if there was enough gas discovered in PNG (Exhibit 29, Exhibit 30)."

Four trains for PNG LNG and a near-by SIX trains for an expanded Antelope LNG sounds good to me. HO HO HO HO HO HO!!!