Each one in plain English, with the numbers worked through for a shareholder.
5 Nov 2015material agreement termination● NeutralMajor
Pacific Exploration & Production, formerly Pacific Rubiales, withdrew from Papua New Guinea altogether under the withdrawal right in its 2012 farm-in, ending a partnership that had paid InterOil US$116 million. InterOil's gross interest in PRL 39, which contains Triceratops, goes from 87.1% to 100%, and it said it would then hold more than 78% of both the Triceratops and Raptor discoveries - simpler ownership to sell on to someone else.
InterOil handed one of its contracted High Arctic rigs to Total for the Antelope-6 appraisal and deferred its own discretionary drilling, including appraisal of the Raptor discovery, until Elk-Antelope appraisal was complete, while continuing to cut costs after giving up operatorship. The Antelope-4 sidetrack was cementing above the reservoir.
Triceratops-3 flowed 17.1 million cubic feet of gas a day and an average 200.3 barrels of condensate, stabilised over several five-hour intervals through a 72/64-inch choke with the flow constrained by the tubing - a short test on a satellite structure, not the multi-week extended tests being run at Antelope. The Antelope-4 sidetrack came in 36 metres higher than the original penetration.
Total re-entered the suspended Antelope-4 well and kicked off a sidetrack from 862 metres. The original hole had been stopped in May 2015 at 2,056 metres below sea level, about 158 metres above the field's gas-water contact.
Second-quarter results built around the claim that the latest Antelope-5 test data support a two-train LNG project: downhole pressure data during the June flow test showed no sign of the field being compartmentalised laterally or vertically, and InterOil described a multi-darcy reservoir with strong deliverability. Liquidity was US$541 million, and with Total now operating PRL 15 the company was cutting its own organisation back.
The Wahoo-1 sidetrack never intersected a carbonate reservoir and the well was plugged and abandoned at 1,589 metres, closing out a wildcat that had already cost a suspended first attempt in 2014. It proved a working source rock and an effective seal in a frontier area 170 km from Elk-Antelope, but no field.
Total took over as operator of PRL 15 on 1 August 2015, five months after the joint venture voted for it. InterOil stayed on to provide technical services to the end of 2015 and to drill the Antelope-4 sidetrack on Total's behalf, after which Total would drill Antelope-6 itself.
The PRL 15 joint venture accepted Total's recommendations for its infrastructure sites - a central processing facility near the Purari River and an LNG plant at Caution Bay, next to ExxonMobil's existing PNG LNG - and named the venture Papua LNG. Concept selection waits on the end of Elk-Antelope appraisal, then expected in early 2016.
Triceratops-3 spudded in PRL 39, 5.6 km north-west of Triceratops-1 and 35 km from Elk-Antelope, chasing additional volumes that could be tied back to the bigger field. InterOil holds 69.1% and operates; Pacific Rubiales holds 12.9%.
InterOil went back to Wahoo with a sidetrack of the well suspended in July 2014, testing whether the trend that works around Elk-Antelope extends 170 km to the south-east.
Flow testing began at Antelope-5, with the rate held by reservoir engineers to a maximum of about 70 million cubic feet a day - a limit of the test design, not of the well. Pressure gauges were to be placed across the field for an extended test to measure size, productivity and connectivity. The PNG Prime Minister visited the well site.
The PRL 15 joint venture voted unanimously to appoint Total as operator, subject to government approval and a transition plan. InterOil, which found Elk-Antelope and drilled every well on it, will no longer run the field it discovered.
Antelope-5 intersected the top of the reservoir at 1,534 metres below sea level, 230 metres higher than the operator's reference case. An extended well test was planned with pressure gauges in the other appraisal wells to measure how well the field is connected - the question that decides whether it supports one LNG train or two.
An International Chamber of Commerce arbitration panel dismissed every claim by the PAC LNG companies, affiliates of Oil Search, that they held pre-emptive rights over the sale of the Elk-Antelope interest, and declared Total a party to the PRL 15 joint venture operating agreement. The challenge to the Total sale is gone and Total's standing in the joint venture is settled.
InterOil declared a discovery at Bobcat-1 after the well flowed and flared hydrocarbons from about 320 metres of Kapau limestone. The same release says the well sits close to the gas-water contact in the transition zone and that new seismic puts the crest of the structure several kilometres west and several hundred metres higher - a real discovery, drilled off the top of the structure, which InterOil now plans to deepen and appraise.
Third-quarter results, and the release in which InterOil formally notified the PNG regulator of a discovery at Raptor-1 following the November flare test. A US$16.9 million quarterly loss sat inside a US$353.9 million nine-month profit created almost entirely by the Total and Puma sales; liquidity was US$754.3 million plus an undrawn US$300 million facility. Wahoo-1 was to be re-entered in 2015 and Bobcat-1 had reached 3,208 metres and was being logged.
Gas and condensate reached surface and were flared at Raptor-1, tested over about 330 metres of open hole including roughly 200 metres of Kapau limestone. No flow rate was given in the release - the well was still being cleaned up and testing continued.
Raptor-1 intersected 200 metres of the Kapau Limestone with wireline logs indicating hydrocarbons, and InterOil moved to well testing to establish fluid type, column height, flow rate and reservoir quality. Bobcat-1 drilled through the seal into the same limestone and was preparing to drill on.
Raptor-1 was setting seven-inch casing just above the Kapau Limestone target, with calcimetry, temperature and background gas readings similar to those seen before entering the Antelope reservoir - InterOil said only further drilling and logging could show whether that means anything. Bobcat-1 was still drilling through the Orubadi shale toward the same target.
Antelope-5 spudded, the first of at least two appraisal wells on the Antelope field and the most southerly on it, about 1 km south of Antelope-2. Appraisal drilling is what sets the certified resource, and under the March agreement the certified resource is what sets Total's remaining payments to InterOil.
The board authorised buying back up to US$50 million of shares over twelve months on the open market, with Macquarie acting, on the argument that the shares were cheap after the Total deal, the licence renewals and the downstream sale. InterOil disclosed more than US$580 million of cash, an undrawn US$300 million facility and only US$70 million of convertible notes due 2015.
Wahoo-1 was suspended short of its target after hitting pressures nearly 50% above those at Antelope, 170 km away, with methane through butane entering the well bore from permeable zones above the objective. InterOil pointed to a proven seal and thermogenic gas, but stated plainly that the reservoir had not been penetrated and Wahoo cannot be called a discovery until it is.
30 June 2014asset acquisition disposition▲ GoodMajor
InterOil sold the companies holding the Napa Napa refinery, 52 service stations and 30 depots, terminals and aviation sites to Puma Energy for US$525.6 million after an unsolicited approach, transferring all downstream staff. The refinery had secured the 2012 term loan and backed the 2013 working capital line; after ten years as a vertically integrated business InterOil is now upstream and LNG only.
A US$300 million senior secured capital expenditure facility led by Credit Suisse at LIBOR plus 5%, maturing end-2015, replacing a US$250 million Credit Suisse line due that month. InterOil said it expected to repay it at maturity out of the variable resource payments Total owes on certification of Elk-Antelope - so the loan is underwritten by the same uncertified resource number as the sale price.
Full-year 2013: record revenue of US$1,400 million against US$1,321 million, on record sales of 9.4 million barrels and refinery throughput of 27,999 barrels a day. The substance of the year was elsewhere - a new chief executive in Michael Hession, the Total agreement, and the US$401 million from its closing that funds the drilling programme now under way.
The Total sale closed, but smaller than agreed in December: Total bought a subsidiary holding a gross 40.1% of PRL 15 rather than 61.3%, and InterOil kept 35.5% rather than about 30%. InterOil received US$401 million on closing, with US$73 million due at final investment decision and US$65 million at first cargo, and the December resource-linked variable payments carried over pro-rated to the smaller stake. Oil Search sits alongside on 22.8% after buying out the Pacific LNG group's interests.
Wahoo-1 spudded five days after Bobcat-1, the second of four exploration wells and up to four appraisal wells in a US$300 million programme. PNG had just granted replacement licences PPLs 474-477 over the same ground as the expiring PPLs 236, 237 and 238, valid six years.