She is a Giant!!

[petrengr1]

I have been looking at the last couple of presentations again (since we have nothing else to look at) and I think I am seeing a couple more indications that “She is a Giant!!”. Let me see if I can explain what I am thinking.

1. First, let’s look at http://tinyurl.com/p5bttdy page 5. This East/West cross section indicates, in the post drill picture at the bottom, that they think the reef extends all the way to the gas/water contact to the West. I believe there is an error in this chart and it appears that IOC also believes the same as shown on page 6. A cross section from Antelope-3 to Antelope-5 is more of a North/South cross section than it is an East/West cross section (see map on the right). You will also note that the formation no longer dips to the West on this map but it stays high all the way to the fault. There is no gas/water contact to the West. Instead we will have “wedge” of reef that gets thinner as it approaches the fault and it is too high to have a gas/water contact to the West. You can see on this latest map that most of the area to the West of Anteople-5 is even higher than Antelope-1 and Antelope-5 and about the same as Antleope-3 which is the highest well in the Field.

2. I really like this new map much better than the old maps shown on http://tinyurl.com/q2lzmbq pages 9, 10, 12 - 15 etc. Of course one reason is that the new map shows all of the area to the West as being higher and thus containing more gas than the old map would have allowed. Another reason is the intriguing area to the Southeast on the new map at http://tinyurl.com/p5bttdy page 6 which I will discuss below.

3. The new map on page 6 does not do justice to the size of the field because it does not show all of the area of the field that is above the gas/water contact. You can see a  little piece of the gas/water contact which is the dotted line in the northeast corner of the map by the big N. So the entire area of this map is filled with gas and there is  more to the North, East and South that is not shown on the map.

4. The intriguing area to the Southeast is interesting because that is where we are drilling the side track at Antelope-4. It is intriguing because to the Southeast of Antelope-4 the formation is no longer going down dip but it is going up dip a little and the map does not show how big this area is. The gas/water contact is at -2,214 meters sub sea so every thing above that depth contains gas. As you can see the map is only showing us the area that is above -1,900 / -2,000 meters sub sea in the Southeast corner of the map. So there is a lot more area to the Southeast that is gas filled but is not shown on this map.

5. Now let’s turn our attention to the North/South cross section on page 6. You can see that the distance from Antelope-1 to Antelope-5 is 2.5 km. Using this measurement we can determine that it is about 5 km from Antelope-1 to Antelope-4.  Now looking back at the map you can see that if it is 5 km from Antelope-1 to Antelope-4 then there is another 2 km of gas field to the Southeast of Antelope-4. This is just the area that is shown on the map and it is clear that the productive area is larger than what is shown on the map because it does not include the area all the way down to the gas/water contact at  -2,214 meters sub sea.

6. Looking again at the cross section on page 6 you will see that if we just talk about the high porosity limestone cap and the dolomite section (where about 95% of the gas is located) Antelope 5 has the thickest section of good rock. You will also notice that the dolomite section is getting thicker to the South. Antelope-2 had the thickest dolomite zone drilled to date. What is South of Antelope-2? That would be Antelope-4 and Antelope-4 ST-1. From the picture of the cross section you can see that if they are kicking the well to the South (or Southeast) that it is quite possible that we could have dolomite from the top of the zone all the way to the gas/water contact. We know from the September 18th  Press Release http://tinyurl.com/pse9bd5  that Antelope-4 ST-1 found the top of the reservoir 36 meters higher than Antelope-4. We were previously told that they found the top of the formation at Antelope-4 at -1,911 meters sub sea. So Antelope-4 ST-1 found the top of the formation at -1,875 meters sub sea. We expected to find a gross gas column thickness at Antelope-4 of (-2214 - 1,911) or 303 meters or 994 feet.

Now we find the top 36 meters higher at Antelope-4 ST-1. The vertical thickness of the gross gas column at that point would be (303 + 36) 339 meters or 1,112 feet. The deviated hole will be somewhat thicker due to the angle of the hole. This may sound like a pretty thin zone when compared to the +/- 2,200 foot gas column up dip but I can assure you that people anywhere in the world would die for a 1,112 foot gas column in 100% dolomite. Let’s hope that is what they report after reaching TD.

Have a good evening!!!

[admin]

["I can assure you that people anywhere in the world would die for a 1,112 foot gas column in 100% dolomite. Let’s hope that is what they report after reaching TD."]

Yea, thanks for that, Pet. 100% dolomite in a 1112 foot column, as the quality of the rock seems to matter much more, as you argue that 95% of the gas is in the sections with dolomite, this is indeed quite a spectacle to behold!

[Palm]

Nice Pet. Thanks for the new look. Unfortunate for shareholders to have this now come to be in a time when energy is for sale at recent historical lows.

[ArtM72]

Thank's, Pet, for freshening up some of that old data. It was good to see last week the decision to bring the new HA rig to PRL15 for the drilling of A6. Maybe we finally will get a number on the girl's size 2016Q1. That would take a little sting out of the decision to back off appraisal drilling at Raptor (and elsewhere?)

Any idea when the next CC is likely to be? It's high time we get some good news.

[Putncalls]

This time it's a bit different. The overcapacity in oil decays rapidly in the shale. US production is down 600,000 BBLs per day in 4 months. If IOC LNG can't make money in Asia no one can.

[Stavros]

Nice Pet. Thanks for the new look. Unfortunate for shareholders to have this now come to be in a time when energy is for sale at recent historical lows.

Palm:

Many folks point to the fact that Oil and Gas prices are at the bottom of a down cycle, and how it has impacted IOC's current PPS. Very true indeed.

BUT .... the situation will not hurt the IOC share price in the long term. The Papua LNG Plant will be selling energy for 30+ years; sometimes at low prices and sometimes at high prices. The FACTS are:

1. IOC gets its resource payment based on the Contract with TOTAL. The payment has zilch to do with current or future LNG price. Petrengr1 is yet again intimating that the payment may be 2.5 BILLION$

2. When the Papaua LNG Plant is built, the cost will be several BILLION$ less than PNG LNG and 10's of BILLION$ less than all of the Australian LNG Plants coming up in the enxt few years. This is a direct result of the current DOWN cycle. THANK YOU VERY MUCH King Salman.

3. When the Papua LNG Plant starts up, the prices of Oil and LNG will be in the UP Cycle and IOC will make a fortune based on their shareholding

History shows that UP and DOWN Cycles are the norm, not an aberration. None of the UP or DOWN Cycles last forever ... this too shall pass sooner than you think. IOC will be a major force in the Asian energy scene if they can only figure out how to stay independent until the check comes from TOTAL.

To my opinion no one should worry about IOC accepting a low ball takeover bid. The bids may come but they will be rejected repeatedly until the check clears.

[jft310]

Palm- Yes today's LNG price are low based off oil prices and that affects the current price per share . But this should be obvious it doesn't matter what today's price is what matters is what contract rate Interoil and Total can negotiate for their gas measured over 20-30 years of delivery .
The perfect investment in LNG is where prices are dirt cheap an investor can add more cheap shares until right before first LNG sale and then prices skyrocket . Wood Mac slides show a big drop off in supply close to when Papus starts production . Why???Some projects will produce all their gas .
PET- nice to see Henry Aldorf's work on gas size being proved out .

[Palm]

JFT I fully understand all of that; it's repeated and repeated here day after day. But also for over too years the world has been saying that "any day" inflation will rear its ugly head. Interest rates MUST rise as full employment pushes down the unemployment rate. That as the unemployment rate in the US drops below 6% we will see wage growth. Yet NONE of the traditional economic models predicted the current situation in the US. Not one. We have unemployment rates of 5.2% (yes I know the harping people are making about underemployment, etc. but today the U6 rate is down to 10%; a point where the argument really starts going away). All models at this point are not working.

I'm in the energy industry and I know the turmoil that is rippling through the industry. Traditional models are not working in this new global economic picture. We are in the middle of a huge global shift that everyone said was coming and when things shift in such a dramatic way through history, old models must be scrapped and it's a good long time before there's a high predictability again. Everyone assumes things in Asia will follow the West with their new middle class. But that may or may not happen. And in the mean time Europe, the US and Canada and other developed nations have the largest parts of their demographic economies falling out of the work force and becoming drains on those economies instead of driving them.

I hope like everyone else that for this investment the old model holds true. But if it does it'll been one of the very few that does. Ask Janet if she thinks what she is seeing and thinking is blowing her mind.

[Stavros]

For September 2015 the official U-6 unemployment rate fell from 10.3% in August to 9.6% in September.

However, the independently produced Gallup equivalent called the “Underemployment Rate” only fell from 14.2% in August to 14.1% in September.

The current differential between Gallup and BLS on supposedly the same data is 4.5%! or roughly a 53% margin of error!

Do you believe the Government Liars or Gallup??? I favor Gallup who have their fingers on pulses of wrists and other body parts.

http://unemploymentdata.com/current-u6-u...ment-rate/

Same story with Recession.

The Government cooks the books and says the economy is still growing. Reality the world is in recession. It will be over in 6 months and then real growth will return.

[Palm]

There's an old Chinese proverb I just made up and it says, "He who always sees the oil and gas industry through rose-colored glasses probably has a cronic case of pink-eye." Hohoho

We will likely see recent historical lows in energy prices in the coming months; that move has just started. None of us know what that will do to SM thinking as they continuously shift downward and outward their traditional models which are being redrawn.