PRE confident in InterOil's Gulf LNG plan

By MALUM NALU

InterOil partner, Pacific Rubiales Energy (PRE) Corp, has expressed confidence in the Gulf LNG project, despite the PNG government serving notice last week that it intended to project agreement of Dec 23, 2009, The National reports.

It yesterday (Wednesday) provided a strategic and operational update relating to the results of the recent testing of the Triceratops-2 appraisal well in Gulf province, where the company holds a net 10% non-operated participating interest in the well drilling on petroleum prospective license (PPL).

PRE chief executive officer, Ronald Pantin, said he was excited about results announced earlier this year by InterOil on the Triceratops-2 well.

"This is a very exciting result and confirms our belief that the Triceratops structure and PPL-237, along with earlier discoveries by InterOil in the adjacent Elk/Antelope structure, indeed represents a world class gas and condensate trend and provides the company with the strategic opportunity for early stage large resource capture on the doorstep of the world's fastest growing primary energy markets,” he said.

“ Not only is the Triceratops structure in itself proving to be a new discovery of significant magnitude, but additional prospects and leads on the large PPL-237 block provide further potential resource upside."

InterOil earlier this month signed a binding agreement with PRE to explore and further appraise the Triceratops structure on PPL-237.

Under the agreement, PRE can earn a 10% net (12.9% gross) participating interest in PPL-237, including the Triceratops structure located within that license.

 The transaction contemplates staged initial cash payments totaling US$116 million, an additional carry of a portion of the costs of an agreed exploration work programme, and a final resource payment.

PRE’s gross participating interest is subject to the PNG government’s back-in rights provided for in relevant PNG legislation.

Department of Petroleum and Energy, however, accused InterOil of not complying with the Oil and Gas Act by entering into a binding farm-in agreement with PRE to take a 10% net equity interest at an estimated cost of US$345 million in PPL-237.

Secretary Rendle Rimua said that this arrangement did not include any equity interest transfer in the Elk/Antelope fields which were also partly in PPL-237.

“The 10% stake only relates to the Tricerotops 2 well and associated exploration activities,” he said.

“The Department of Petroleum and Energy is very concerned that Interoil has released information publicly on the transfer of the equity interest without approval from the Minister for Petroleum and Energy (William Duma).”