InterOil get credit extension from Merrill Lynch

Reporting on InterOil is becoming a full time job, almost. After today’s promising signs, gas flared at Antelope, we have a credit extension from Merrill Lynch. Not for very long though, only until the 12th of May, so just over a week. That timing is very significant…

It’s almost impossible to escape the conclusion that both parties think this is time enough to perform an all conclusive DST test on the new gas find, which will change the whole ball game.

It’s a possibility that we’ve mentioned a couple of times before, we always thought it would be likely that Merrill would wait until the final status of the Elk4 well was known, and take decisions from there.

So, it’s going to be an important DST test, lots riding on it, but the signs are very good, if gas has to be flared against a heavy mud load, there is definitely gas pressure…

In fact, the time is so short that we think InterOil might not even drill to total depth but reverse order and do a DST test first, at the hight were they encountered the gas kick.

It also shows what we thought, Merrill was playing tough, and it all depends on what Elk4 brings.

Once again, it’s an interesting ride, this.