Good or Bad: IOC is Pulling Back on Exploration ??

[johnwgrant]

"Dr Hession also said InterOil has decided to defer its discretionary drilling program, including appraisal of the Raptor discovery, until the Elk-Antelope appraisal program was complete."

My 2 cents....

Pros: (1) Conserves cash.

          (2) Market not giving credit anyway for extra resources.

          (3) If you have enough gas for 2 trains just from E/A, what good is it to have extra gas sitting around that cannot be monetized until after the Papua LNG plant is in production.

Cons: (1) IOC doesn't have info needed to do deals - selldowns, etc.

           (2) IOC has a lot of expensive overhead (VP's etc) with nothing to do - layoffs ?   Or is this a "Pro"?

[Palm]

Agree as there are tradeoffs either way. Another con is that there was thought another deal with TBR assets might happen sooner and on similar terms to PRL15 deal with Total, but that likely is pushed out, if it was even much of a reality before.

[2126]

I don't see this delay in non-E/A drilling as lasting that long. It seems that IOC has simply decided to shift the new HA rig over to drill A6, rather than wait for the A4S1 rig to complete. Once the A4S1 rig is done, I would think that it would be used to drill Raptor 2 or other wells without much delay. This news simply provides more assurance that the E/A appraisal/certifcation will be completed early 2Q16, barring any delays/problems with Total operating the HA rig at A6.

[Palm]

Would rather they go to Ant S instead of doing anything outside PRL15 at this point. Get this deal finished, then move on.

[Gator]

Would rather they go to Ant S instead of doing anything outside PRL15 at this point. Get this deal finished, then move on.

Get PAID, move on. Rinse Repeat.

[Getitrt2]

I agree the IOC High Arctic rig (115 or 116) is being committed to Ant 6 to avoid any further delay in drilling that. Rig 103 from OSH at Ant 4 was going to Ant 6 and then afterward to OSH, but apparently is being delayed at Ant 4, and now may go back to OSH from Ant 4.

Hopefully, the apparent cementing problems at Ant 4 are related to extreme porosity, which in the final analysis I would think would be positive. Any further thoughts on that, Pet? Someone I talked with said, who knows, maybe the dolomite at Ant 4 ST is so extensive they would consider doing a horizontal well while they are in it to further appraise it! Speculation, I would assume, but very interesting speculation.

The JV decided to drill the Ant 4 ST because of the findings at the original Ant 4. It seems to me that Ant 7 could still be under consideration because of Ant 5 results as disclosed before, in which case they would want to keep IOC's other High Arctic rig available for that, rather than committing it to Raptor. Furthermore, beyond Ant 6 and/or Ant 7, Antelope South would probably have priority over Raptor or other appraisal/exploration, requiring either Rig 115 or 116 for that.

It's too bad they wouldn't provide more information on their thinking on all that, although I realize it would not represent hard facts or news. We can probably expect more information and commentary on all that with the Q3 report and conference call in a few weeks (probably second week of November).