Ann: Elevala and Ketu fields PRL 21 PNG, page-12

From the announcement:

"Since APDL 12 was submitted, Horizon Oil has evaluated various potential gas commercialisation pathways and new pathways have emerged including:
• Western LNG....; and
• Third party access to the proposed P’nyang pipeline to be constructed as part of ExxonMobil’s PNG LNG expansion project in accordance with the State’s proposed Natural Gas Policy2. "

"Horizon Oil, together with the PRL 21 licensees, welcomes the opportunity to engage with the Minister on development of the Elevala and Ketu fields."

"We anticipate further discussion with the Minister and his Department regarding our proposed development plans. Horizon Oil’s objective is to realise a commercialisation pathway for the Elevala and Ketu fields that is mutually acceptable to the State and the PRL 21 licensees including facilitating an open dialogue with the State and the proponents of the PNG LNG expansion project on a commercialisation pathway for the fields by way of third-party access to key infrastructure."

In 2014, as part of the proposed merger with ROC Oil, Horizon interests in the Stanley and Elevala-Ketu fields were valued at between US$180M and US$260M taking a probability of 50% to 60%. On a 100% probability basis they were valued at US$430M. This excludes any value for the US$130M they will get from Osaka Gas on FID of an LNG Facility.

Given that Horizon Oil currently only has a market value of A$150M or about US$105M this intervention could be a great opportunity for Horizon if we can get the Minister to advocate/demand exactly what we need from the PNG LNG project to assist us in commercialisation these assets. To me it is a case of the glass been half full. With Osaka Gas on board, a proposed P'nyang pipeline to be constructed and a Minister prepared to make demands that are in the interest of PNG development from overseas participants in PNG LNG, I look forward to what proposals Brent can come up with to put to the Minister.

Regards

SP