In­teroil re­vises its PNG strat­egy

In­teroil has un­der­gone a ma­jor re­or­gan­i­sa­tion in the past 12 months, chang­ing its man­age­ment team, di­vest­ing it­self of its down­stream as­sets and fo­cus­ing in­stead on ex­plo­ration and the devel­op­ment of the Elk-an­te­lope project with France’s To­tal SA. Its CE

Business Advantage Papua New Guinea - - Petroleum & Gas -

In 2014, we pre­pared for growth. We re­newed our man­age­ment team, stream­lined our busi­ness, fo­cused on mon­etis­ing our gas re­sources, and be­gan re­new­ing our board.

Sec­ond, we fo­cused on ef­fec­tively and ef­fi­ciently de­vel­op­ing Elk-an­te­lope–po­ten­tially the low­est-cost LNG project in the Asia-pa­cific.

Third, we re­main fo­cused on fi­nan­cial dis­ci­pline and have a strong bal­ance sheet with cash in the bank and very lit­tle debt.

Fi­nally, our deal with To­tal SA pro­vides for ad­di­tional cash on cer­ti­fi­ca­tion of Elk- An­te­lope gas vol­umes, which is ex­pected in the sec­ond half of 2015.

Our strat­egy is sim­ple and fo­cused—we find hy­dro­car­bons, mon­e­tise and de­velop them, and then do it again.

If 2014 was about us fo­cus­ing the com­pany and free­ing us from dis­trac­tions, 2015 is about de­liv­ery.

Elk-an­te­lope sits on the doorstep of Asia, the world’s largest LNG mar­ket, and we are poised to take ad­van­tage of our prox­im­ity to mar­kets.

We are now fo­cused on us­ing our funds ef­fec­tively and ef­fi­ciently in a com­pet­i­tive con­trac­tor mar­ket for seis­mic, drilling and LNG devel­op­ment.

Elk-an­te­lope is a sin­gle gas field that can be de­vel­oped with­out the cost of col­lect­ing gas from mul­ti­ple fields.

It is closer to the coast and Port Moresby than other ma­jor gas fields in PNG and it is close to a ma­jor river, an im­por­tant cost ben­e­fit when trans­port­ing peo­ple and equip­ment.

The gas field is in a less-moun­tain­ous re­gion than other ma­jor gas fields, a big fac­tor in devel­op­ment cost, and, it is within Pa­pua New Guinea’s least pop­u­lated prov­ince, a key fac­tor in ne­go­ti­at­ing land ac­cess.

All of th­ese fac­tors point to lower cost, and low­est cost projects go first.

In­teroil’s Dr Michael Hes­sion

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