Interoil not only has discovered a lot of gas at Elk, but they have a truly extensive portfolio of numerous structures with 40+ promising drilling sites wich share many of the same characteristics of Elk. To quote Joseph Dancy, (Adjunct Professor Oil & Gas Law, SMU School of Law, manager of the LSGI fund), wrote in May 2007:

“Note the company has a license to explore for oil and gas on 9 million acres of lands in PNG. This equates to over 14,000 square miles. To put that in perspective, this area is larger than the District of Columbia as well as each of the following states: Rhode Island, Delaware, Connecticut, New Jersey, New Hampshire, Vermont, Massachusetts, Hawaii, and Maryland.”

“Of course all the land in the world is irrelevant for oil and gas exploration and production purposes unless it has the following attributes: (1) a source rock of (2) appropriate geologic age that (3) has been subject to geochemical and geothermal conditions (4) conducive to forming crude oil or natural gas, and (5) a reservoir with (6) permeability and porosity allowing such hydrocarbons to be extracted as well as (7) a cap rock and/or structural trap to keep the reserves in place.”

“The wells have confirmed the presence of source rock, that the appropriate geochemical and geothermal conditions were present to ‘cook’ the organic material to create hydrocarbons, that a reservoir exists that exhibits both porosity and permeability, and that a cap rock and geological structure exists to trap these reserves. The geologic anomalies that exist on the Elk structure appear to be present at a number of locations on the company’s nine million acre license. At least a dozen potential structures – maybe more – might be attractive enough from a risk/reward standpoint to drill. Seismic and gravity surveys will better delineate the potential prospects.”

Or, Wayne Andrews from Raymond James (in a report on IOC dated 11/04/07 p4):
“Remember, as the market continues to focus on the amount of natural gas and liquids in the Elk structure itself, there are many additional limestone structures to test, and the largest potential reservoir on InterOil’s acreage remains to be tested. The 1,000-foot sandstone, which was cored top to bottom, will be drilled once further seismic data confirms prospect integrity.”

And:
“While we understand that investors are closely watching each well, we reiterate our, and the company’s, position that only the completion of a portfolio of drilling projects will yield a successful appraisal of the area’s hydrocarbon potential. Based on the approximately 37% success rate of previous drilling activity and the improved geologic setting, we estimate the probability of at least one other significant discovery (in addition to Elk) resulting from the eight-well drilling program to be high.” (RJ 11/04/07 p4)

In another article, we explained that Wayne Andrews put zero value for these promising land (although he did value it and 1,375M before Elk was discovered). We wonder, with today’s energy frenzy, and having discovered a large natural gas resource in the midst of it, would IOC put those concessions up for auction, what price would it fetch. Properties like this are rare in today’s world.