farmin to ppl 259 is a win for hzn

I had been hoping for some time that HZN would come to a deal with Eaglewood over PPL259.

For one thing it means HZN will get more benefit from Stanley. The PNG Government was not prepared to issue a development approval to the PRL4 joint partners until an agreement could be reached with Eaglewood about how much of Stanley encrouched into Eaglewood's PPL259b lease (eg 5%,10% or whatever). So effectively Eaglewood was also to be treated as a joint partner in the Stanley oil/gas field.

After Eaglewood got screwed by Talisman for 90% of Ubunto and still having to carry their remaining 10% of costs I had hoped that left the door open for HZN to do a deal.

HZN was not the only company buying into a share of the Eaglewood's PPL259 leases. An existing partner of Eaglewood, Mega Fortune International has also bought into a similar 25% on the same terms as HZN. Eaglewood will retain 40%.

I would not be surprised to see the first well for this new joint venture being drilled to see how far Stanley does go into the PRL259b lease. Part of the reason for this is accessability. The road to areas such as Elevala, Ketu and Ubuntu will not be finished until perhaps the end of this year. Flying in equipment is expensive. Another option could be a site around the town of Kiunga.

One benefit of this deal is that Eaglewood and HZN, although both strongly linked to Talisman, will each be able to do a seperate development if for some unknown reason Talisman decides to go slow on their existing joint ventures.

An interesting comment in the HZN release was about a small scale liquified natural gas plant, possibly at Kiunga, for exporting LNG,LPG and condensate via the Fly River. From memory, Eaglewood already has first rights to one of these plants. This would enable exporting of these products without having to wait for Talisman to complete the pipeline to the coast.

Imagine a well and condensate plant both situated at Kiunga. Very little pipeline to be laid and could probably be in action within less than 2 years.