Twas just a minor fire

[sageo]

Part of the drilling issues are condition related . OSH has taken 9 months to drill some of their wells something they don't like to talk about . And Interoil has fully recognized a problem with the age of their rigs and has thus signed leases for newer rigs from High Arctic . Compare Ant 5 with Ant 4 the difference is age of rig . The conditions weather, terrain are much harder on an older rig . Thus Interoil signed leases about a year ago for newer rigs. Cut the guys some slack they found a problem , came up with a plan and the first of the newest rigs is due this month with a second coming. The solution is at hand.

Jft- Good morning to you. Speaking about rigs,are the rigs at Bobcat and Wahoo just sitting there idle ? If so,any idea about cost per day for such rigs ? Seems like we should have moved the Bobcat rig to another location by now. Tia.

[Thylacine-2]

My opinion the govt wants Interoil to survive . Most of the gas and oil that OSH now has they bought from Chevron when they left the islands . Phil got the leases for free from the govt after the Super Majors all left the island . He then found gas where it wasn't suppose to exist per the Super Majors . That point about Interoil finding all these assets certainly more than OSH ever has found has never been forgotten . My point in this history statement is buying all of Interoil has complications for the buyer . That said there is this window between known asset size and check receipt . And we have hungry investment bankers thus I expect an offer to two . Would take a heck of deal to get her dune but it's certainly a possibility . Exciting year for all .

More true in the past I think than now (govt wanting IOC to survive).  What they have really wanted was another SM to operate PRL 15.  While I agree that IOC has proven up assets where others walked away, the momentum in PNG is now moving forward both with PNG LNG getting up and running ahead of schedule (putting PNG on the world map for LNG), and Total committed to PNG and now OPerator of PRL 15.  The govt hesitated about a NY second in approving the transfers under the JVOA and having Total named as Operator.  And Botten's comments about being very willing to step in as Operator over IOC makes it sound like Total and OSH are recognizing IOC's limitations. And the govt has been far too patient in giving IOC a long leash in developing its licenses.

But things need to move swiftly now to take advantage of the window of opportunity with oil and construction costs down.  IOC has its remaining licenses and prospects and I'd guess the gov wants things proven up more quickly that what IOC has shown it is capable of.  They are "valuable" because they have their name on licenses which were just granted/renewed.  That's their ace in the hole for survival.  But they are a somewhat weak link financially until they can get some production cashflow going.  Mgmt and the BOD better stay on their toes and keep IOC "valuable" going forward.

The article that prompted this thread obviously wasn't from info first provided by IOC.  Or OSH.  They were sought out after the publication had some info in hand for comment, so Botten and the other OSH official gladly shed some light on the situation.  IOC obviously had no intention of informing the world that they were again having some pretty big drilling challenges.

Palm, doesn't IOC's plan for now not rely so much on production cashflow as it does on drilling  up the prospects and generating cashflow by monetizing them?

[Palm]

Agree Thy, but as a financial person I feel financial stability LT comes from cashflow from assets developed, not just selling off assets. Like in real estate. Having lease income coming in from the majority of those assets is better LT than buying/selling. I agree that IOC must develop and sell interests to survive in the near-term, but resource companies who are around for the LT and end up paying dividends own assets which provide LT cashflow. If I weren't in IOC for the LT, I'd have sold at $106. Wait I already did that Hohoho

[Getitrt2]

Yepper Tree; felt that all along. The way they went about buying the PAC LNG interests when Total was reported to be in discussions with OSH abut buying a 15% interest from them (Total) looked pretty "dark". Through all of that (per Total) the Total/OSH relations were tested. Now it will be interesting to see if OSH sucks up to Total and tries to minimize IOC's influence. With Total having first rights to IOC's other licenses this pissing match may not be done. Will be Total's duty to handle it as well as the government. Maybe Botten will move on sooner rather than later and help overall relations.

True, Total does have first rights to IOC's other licenses, but OSH has a relationship with PacLNG and has that avenue to pursue interests in IOC's other licenses.

[Getitrt2]

Deals like that are done all the time Puts. One would just have to bring the right deal to the BOD. The gov bought into OSH; pretty strong statement of preference. And they obviously love Total as Operator. Who's that other company? Oh yeah, Ennerole, Enteroil or something like that.

I don't consider that in particular a "statement of preference" at all.  They were losing long-time shares in OSH for forced debt extinguishment, with PNG LNG going into production, and did not want that, and had an opportunity to replace the shares at a discount with new debt.  I don't think it had anything to do with preference for OSH over IOC.  Obviously, they have a preference for cash flow now versus in the future.

[Thylacine-2]

Yepper Tree; felt that all along. The way they went about buying the PAC LNG interests when Total was reported to be in discussions with OSH abut buying a 15% interest from them (Total) looked pretty "dark". Through all of that (per Total) the Total/OSH relations were tested. Now it will be interesting to see if OSH sucks up to Total and tries to minimize IOC's influence. With Total having first rights to IOC's other licenses this pissing match may not be done. Will be Total's duty to handle it as well as the government. Maybe Botten will move on sooner rather than later and help overall relations.

True, Total does have first rights to IOC's other licenses, but OSH has a relationship with PacLNG and has that avenue to pursue interests in IOC's other licenses.

Can anybody link us to a statement by IOC that Total does have first rights to IOC's other licenses?  Has any information been released which describe the rights?

[Getitrt2]

Yepper Tree; felt that all along. The way they went about buying the PAC LNG interests when Total was reported to be in discussions with OSH abut buying a 15% interest from them (Total) looked pretty "dark". Through all of that (per Total) the Total/OSH relations were tested. Now it will be interesting to see if OSH sucks up to Total and tries to minimize IOC's influence. With Total having first rights to IOC's other licenses this pissing match may not be done. Will be Total's duty to handle it as well as the government. Maybe Botten will move on sooner rather than later and help overall relations.

True, Total does have first rights to IOC's other licenses, but OSH has a relationship with PacLNG and has that avenue to pursue interests in IOC's other licenses.

Can anybody link us to a statement by IOC that Total does have first rights to IOC's other licenses?  Has any information been released which describe the rights?

"First rights" might be a misnomer.  It goes back to the December 2013 announcements, where I think it was described as an "exclusive right to negotiate" some kind of farm-ins, and I've seen nothing new on it since.  I got the impression from a Company contact that's all it was, something Total wanted, but not any kind of formal rights that were purchased, and that IOC had no interest in such before doing much more exploration and development with big increases in values.

[Palm]

Yepper Tree; felt that all along. The way they went about buying the PAC LNG interests when Total was reported to be in discussions with OSH abut buying a 15% interest from them (Total) looked pretty "dark". Through all of that (per Total) the Total/OSH relations were tested. Now it will be interesting to see if OSH sucks up to Total and tries to minimize IOC's influence. With Total having first rights to IOC's other licenses this pissing match may not be done. Will be Total's duty to handle it as well as the government. Maybe Botten will move on sooner rather than later and help overall relations.

True, Total does have first rights to IOC's other licenses, but OSH has a relationship with PacLNG and has that avenue to pursue interests in IOC's other licenses.

Can anybody link us to a statement by IOC that Total does have first rights to IOC's other licenses?  Has any information been released which describe the rights?

Thy,

I had posted this last week in one of the threads; maybe this one.  But all we have is from the PR when IOC announced the deal with Total in Dec 2013:

"InterOil Corporation................. a gross 61.3% interest in Petroleum Retention License 15 (PRL15" which contains the Elk-Antelope gas fields in the Gulf Province of Papua New Guinea, and has also granted Total an exclusive right to negotiate a farm-in to all of its exploration licenses in Papua New Guinea."

That's all I've seen in writing anywhere.

[Palm]

Yepper Tree; felt that all along. The way they went about buying the PAC LNG interests when Total was reported to be in discussions with OSH abut buying a 15% interest from them (Total) looked pretty "dark". Through all of that (per Total) the Total/OSH relations were tested. Now it will be interesting to see if OSH sucks up to Total and tries to minimize IOC's influence. With Total having first rights to IOC's other licenses this pissing match may not be done. Will be Total's duty to handle it as well as the government. Maybe Botten will move on sooner rather than later and help overall relations.

True, Total does have first rights to IOC's other licenses, but OSH has a relationship with PacLNG and has that avenue to pursue interests in IOC's other licenses.

But we don't know that the PAC LNG group of companies (5 or 6 per their YE 2014 financials) already purchased are the same or all of the companies which have rights in other license areas.  And those rights now likely have much less value in OSH's eye since pre-emptive rights may be non-existent or very limited based on the abitration decision.  We don't have enough info from the ruling to know whether the whole issue of preemtion is not an issue as long as IOC handles any rights transfers in the same way, or if the court felt that in PRL15 the PAC LNG group's rights expired before OSH purchased the companies.

[Getitrt2]

Yepper Tree; felt that all along. The way they went about buying the PAC LNG interests when Total was reported to be in discussions with OSH abut buying a 15% interest from them (Total) looked pretty "dark". Through all of that (per Total) the Total/OSH relations were tested. Now it will be interesting to see if OSH sucks up to Total and tries to minimize IOC's influence. With Total having first rights to IOC's other licenses this pissing match may not be done. Will be Total's duty to handle it as well as the government. Maybe Botten will move on sooner rather than later and help overall relations.

True, Total does have first rights to IOC's other licenses, but OSH has a relationship with PacLNG and has that avenue to pursue interests in IOC's other licenses.

But we don't know that the PAC LNG group of companies (5 or 6 per their YE 2014 financials) already purchased are the same or all of the companies which have rights in other license areas.  And those rights now likely have much less value in OSH's eye since pre-emptive rights may be non-existent or very limited based on the abitration decision.  We don't have enough info from the ruling to know whether the whole issue of preemtion is not an issue as long as IOC handles any rights transfers in the same way, or if the court felt that in PRL15 the PAC LNG group's rights expired before OSH purchased the companies.

What OSH announced before was a six-month exclusive right to negotiate, which I assume has expired, and I don't know that they have purchased or own anything beyond PRL 15.  All I referred to was relationships and channels they used before and potentially could use again to acquire interests in other leases, whether they are after preemptive rights or not.  They don't have to go to Total for that.