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InterOil confident in Papua LNG project

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LNG Industry,

InterOil Corp. has released an operations and financial results update for 4Q15 and the financial year ending 31 December 2015. Michael Hession, the Chief Executive of the company, highlighted the fact that momentum was building for the Papua LNG project, with Antelope-6 intersecting 42 m of dolomite with connectivity to the rest of the Antelope field. A flow test in 1Q16 also identified the excellent reservoir qualities, which were initially identified by a short flow test in 2015 at Antelope-5.

Hession said: “During 2015, significant milestones were achieved with the appointment of Total as operator and the selection of the Papua LNG project’s key infrastructure sites. Analysis from independent sources suggests Papua LNG will be one of the most competitive new-build LNG projects globally, with short shipping distances to Asian markets and potential for attractive returns.

“The data from the last three appraisal wells have surprised on the upside and extended flow tests have confirmed connectivity, deliverability and excellent reservoir quality across Antelope. This will mean a less complex and lower cost development.

“While the analysis of the Antelope-6 well and the Antelope-5 flow test is continuing, results to date have been encouraging and we remain confident of a two-train LNG development. On completion of the appraisal programme, data will be submitted to two independent auditors for certification, a process which could take four to six months.

“Following last year’s restructuring and streamlining of the business, we have reduced guidance on our expected 2016 spend to a lower range of US$155 million to US$170 million, predominantly focused on the Papua LNG project. While we have US$252 million in current liquidity at the end of 2015, we are in discussions with our lenders to increase and extend our credit facility. It is proposed to complete the increased and extended facility in the second quarter of 2016.

“Our focus in 2016 will be on completing the appraisal programme, progressing the certification of Elk-Antelope volumes, advancing the world-class Papua LNG project from basis of design to FEED and monetising our independently assessed discoveries with strategic partners.”

Edited from press release by David Rowlands

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