A7

[Putncalls]

It seems like it takes many months to prepare a drilling site once the decision is made. Didn't A6's sight take over 6 months?

[Thylacine-2]

No problem. If the JV partners decide to go ahead with A7, it will be operated by Total. In order not to delay FID, they will just drill first and prepare the site later.

[ArtM72]

No problem. If the JV partners decide to go ahead with A7, it will be operated by Total. In order not to delay FID, they will just drill first and prepare the site later.

HA!  Nice.

[Putncalls]

How many share owners want IOC to get bought out before A7?

[will2bgreat]

How many share owners want IOC to get bought out before A7?

Puts, to me, that is not the question at hand.  The question that scares me is, "when does the appraisal wells stop?"

We have not been given any guidance on that question.  Let's take Pet's previous post that stated we may need up to 3 additional wells to define the extent of the gas boundry.  IOC has no additional money coming in, but we have the Phil hope that another deal is in the works.  Let's assume 3 wells, one year to perform.  That puts certification at about 1.5 additional years out (and I being aggressive on the timing) and of course not having adverse effects on FID timing.  Where do you think IOC's share price will be in 1.5 years with let's say $400MM in debt?  Will we still have all of the majors holding their shares?  If not, we have the possibility of the share price going much lower.  My prediction is we never get to certification because Total will simply come in at the 50% markup to the current share price and buy IOC for the price of the certification payment. And please don't tell me that can't happen. Prior to certification, the only estimates we will have will be from TOT, IOC, and OSH. Clearly, the market does not believe IOC's estimates, and TOT/OSH are not going to speak up and support those estimates.

And where does this put the IOC business model of discover, sell down, and repeat?

MH needed to give us a very clear picture of the future of IOC in the call.  We are reducing spending down to $10MM plus our share of drill costs or something to that effect, but I have not seen that at all.  So we do not have a clear picture of IOC moving forward either in spending rate or business model.  So one can clearly understand why people are frustrated.  Being a poker player, a good starting hand is ace, king in texas holdem.  However, when going up against pocket queens, ace, king is just a hope and a prayer.  If they don't hit, you are losing alot of chips.  That to me, seems to be IOC at the moment.

Good luck longs, I still believe in the resourse but also believe this contract with Total is not genius.

[ArtM72]

The stone in my shoe for years has been the major world players protecting their prior investments in Australia by subverting the development of potentially vast resources in the eastern Papuan basin. This includes the major investment banks/brokerages and the super majors. IOC's best hope would therefor lie in the leaders of its neighboring countries such as China, Japan, India and Korea whose energy needs are substantial. Those nations are capable of acquiring PNG's gas despite the intent of western banks and oil companies.

If this theory is correct we can only hope that O'Neill's interests and determination to see Papua LNG developed without further delay will overcome the determined intransigence.

Good luck to us all.

[Palm]

The issue/answer really is that for PRL15 MH has very little overall say. With Total as Operator we are a minority JV partner and Total has the duty to properly plan and execute the plan. They will always now be the decision maker. That's why IMO IOC tried to hang on as Operator as long as possible. The only ace in the hole IOC can use is the FID target from the SPA. Total can move that just so much. Outside of that Hession can only say, "Yes master". The government could say something at some point but they also listen to Total's recommendations, not IOC's.

[sageo]

The stone in my shoe for years has been the major world players protecting their prior investments in Australia by subverting the development of potentially vast resources in the eastern Papuan basin. This includes the major investment banks/brokerages and the super majors. IOC's best hope would therefor lie in the leaders of its neighboring countries such as China, Japan, India and Korea whose energy needs are substantial. Those nations are capable of acquiring PNG's gas despite the intent of western banks and oil companies. If this theory is correct we can only hope that O'Neill's interests and determination to see Papua LNG developed without further delay will overcome the determined intransigence. Good luck to us all.

Art - Good am to you . So true,the energy needs of JICK are substantial . Maybe one of them (or two of them together) will step up and make O'Neill look like a hero to his PNG people.  Any politician would love that,I should think . Best to you.

[Putncalls]

I'm suspecting that IOC management doesn't want to get bought out and Total wants to slow down it's spending. A7 does that by delaying certefication.

[Relker]

If Total wants to delay the payment and agrees with A7 we should be happy as long as FID will not be changed. Suppose the PRL 15 resource amounts to > 15 TCF, Total can copy the Yamal plant with much lower capex per ton.