Ann: Notices in respect of PDL 10 in PNG, page-4

From the PNG Cabinet's viewpoint they granted a development licence for Stanley in 2014 on condition that Horizon accept a dilution of ownership so companies with the cash to develop it could take a stake. Repsol became the operator. Since Cabinet granted the Development Licence the local landowners with expectations of royalties have been raising hell about the slow progress. As well the Western Province is impoverished and in desperate need of development especially electrification that could come with the commercialisation of Stanley. On top of that there is widespread condemnation of companies that are accused of not paying their taxes, namely Exxon in the PNG LNG project. So there is a lot of frustration about Stanley in PNG and general bad feeling towards foreign companies for not paying taxes nor paying royalties to the right landowners. I see this threat as purely a political move to demonstrate that the PNG Government is standing up for the landowners without taking on the big companies, Oil Search and Exxon. As such it will blow over imo. As Jo said Horizon needs to keep the positive news coming on the WLNG project. This development has the potential to disrupt the deal with Balang and I doubt that Cabinet would want to do that, Repsol has been hopeless and Cabinet would be happy to see them out of the country and Balang has been making very positive comments about progressing the WLNG project and they have the cash to make it to reality. Horizon has called this announcement not price sensitive and they are correct.