lng prjoect in png

Hi Shamish,

I do not know where you get your information from re: 50% only chance of Interoil going ahead with PNG LNG project. The information channels I have access to, provide quite a different story. See below comments from the website www.shareholdersunite.com. On 12 March, 2011 you can read the following:

Time to get back into InterOil
March 12th, 2011
We?re in the good company of Morgan Stanley..

We told you to sell InterOil a week or so ago when it was at $72, as we (mistakenly) thought the support level had broken. It did indeed go down to $68 (and we actually issued a buy-back call on an Internet board on Thursday the 10th). It has since recovered to $70.
We never really expected it to go down a whole lot (maximum to $65, the 200 day average), as there are big parties accumulating and new, price moving developments are coming ever closer.
Indeed, this is what Morgan Stanley is saying:
InterOil Corp. (IOC): Stock Has Lagged on Lack of Catalysts; Several Lie Ahead
Why has the stock underperformed?We believe that the stock has underperformed because of a lack of news surrounding a number of catalysts that the market expected in late 4Q 2010, but which have yet to be announced.

Why we still like it, and upcoming catalyst

With an estimated Net Asset Value of $225/share at its current resource estimate, the stock is trading at a 70% discount to NAV. We expect that an upwards revision to resource estimates and execution on monetization of the asset base, including official project sanction, will close the value gap in the coming months.

Catalysts that we expect in the next 30 days include 2010YE GLG resource assessment and clarity of LNG financing by partner EWC. Potential additional catalysts over the 60 days could also include an FLNG monetization deal, a strategic asset sell-down (1-10% of Elk Antelope), spud of next exploration well, and a gas off-take agreement (for up the 2mtpa).
And they were not the only ones, Raymond James was at it as well:
InterOil Corp. (IOC) Cur. Price (3/9/11) $70.11 Non-GAAP 09A 10E 11E 10-day ADV 368,330
Outperform 2 52-Wk Range $81.98 ? $41.67 EPS $0.47 $0.21 $0.51
Market Cap. (mil.) $3,569 PEs 149.2x 333.9x 137.5x Div. Yield NM
Pavel Molchanov BV (09/10) $10.49 Rev. NAV/Share $102.58 (713) 278-5270 Suitability High Risk (mil) $693 $829 $1,026 LT Debt/Total Cap 14%
InterOil Corp. is an oil and gas company with operations in Papua New Guinea (PNG).
Presented on: Wednesday, 11:35 a.m.
Presented by: Wayne Andrews, Vice President of Capital Markets
Management summarized the outlook for InterOil as it enters what should be an eventful 6-12 months. A year-end 2010 resource update is expected in conjunction with the 4Q10 results, to be reported later this month. A final investment decision (FID) on the condensate stripping plant and modular LNG plant ? which are aligned as an integrated project ? remains on track to be completed by the end of June. While fully recognizing the timing and execution risks, we continue to like InterOil?s long-term cash flow potential and reiterate our Outperform rating. Management remains in talks for an Elk/Antelope gas resource selldown to prospective offtake partners, which we see as a potential near-term catalyst (albeit with uncertain timing). A resource sale transaction is clearly foremost in investors? minds, and with InterOil?s recent $280 million capital raise enhancing its negotiating standpoint, discussions with potential offtakers continue. There also remains the potential for a fixed floating LNG plant, initially envisioned as 2-3 million tons per year. The company ?may have some news on that in the near future.?


As EWC shareholders we also have been accustomed to get our information from sources other than EWC board members. Just to add to this information flow, I post below two comments from the same website (www.shareholdersunite.com), which indicates a second lng project EWC is interested in in PNG.


Interesting they have nothing on their website on this, but EWC is working on another project on the other side of the island in Madang. In fact they signed a MOA at about the same time as the original deal with IOC was announced last September. This shows they feel they have the ability to continue with their growth, and get financing for it. Very early in the process, as first they have to wrestle a PPL away from a curent holder. The "Kavo" of Madang has gone to PM to make that request. This sounds very similar to the Gulf project, but the power plant seems to be the main focus to work with PNG Power. PNG Power has recently received ADB funding for a hydro project over there. Interesting thing is that supposedly O&G was discovered in this PPL back in the 70s; the more recent Mar 2, 2011 article states there is an estimated 19Ts.


This is similar timing-wise to how the Gulf project started. Kavo signed the agreement with EWC in Sept 2009, and we are where we are at this point.

Must be some substantial bucks behind EWC


Sentiment : Strong Buy


By ROSALYN EVARA

HEADWAY is being made with the Banu Oil and Gas Project in the Usino/Bundi District of Madang according to the Project?s Chief Negotiator and Chairman of the Sagi Landowner Association Gabriel Aimai.
Mr Aimai said thanks to funding assistance from their local MP Samson Kuli, Governor and Raicoast MP James Gau and the Madang Provincial Government the landowners had a total of K250,000 to do what they need to do, to help move this project
He said Messers Kuli and Gau had each made available K100, 000 while the Madang Provincial Government K50, 000.
He said part of these funds would be used to fund a trip they would be undertaking next week to Port Moresby.
He said the purpose of the trip would be to meet with relevant authorities regarding the Petroleum Prospecting License 227 (PPL227).
He said this licence had been issued to an Asian firm which he named as Daba Jodi.
However, Mr Aimai claimed the company had not done anything concrete with it to date.
?This project is long overdue for the people of Usino and Raicoast which are the two least developed districts of Madang.
?It is also a big one as it is estimated it hold 19 trillion cubic meters of oil and gas,? he said.
He said it was their intention to go to Port Moresby and to get the PPL 227 off from the current holders and to give it to a company called Energy World Corporation, an Australian based entity.
Mr Aimai said the landowners had held preliminary talks with EWC and signed an agreement to not only kick start a power project with PNG Power in the province but also to have the excess exported to overseas markets.
?The project proposed will supply power to the Marengo Mines, MCC operations both at Kurumbukari and Basamuk, the Pacific Marine Industrial Zone, the Madang township while the excess will be exported,? he said.
He said the landowners were keen to work with EWC as it had already in principal agreed to give them 20 percent equity in the project.
Meanwhile Mr Aimai said the funds received also from the leaders and government of Madang has already enabled them to secure an office space in town near the old Tam Yan building.
He said the building is currently undergoing renovations and once completed they will then have a proper place to operate.

Shamish, on the matter of additional power plants (other than by EWC) being proposed/built in Sulawesi, one needs to remember that EWC?s 2mtpa lng trains need 120MW power (ie. all its expansion at Sengkang). This means that the people/business of Sulawesi will not get any additional power (should EWC?s be agreed to be met by its 120MW expansion of its Sengkang power plant.

No, as far as the flow of money is concerned, the Interoil lng project is scheduled to be 12 months later than EWC?s Sengkang lng project (should BPMigas approve the POD by end June 2010). Yes, there is more money to be made with the Sengkang lng project, but US$170million per year, starting in 2014, from the Interoil lng project is a very substantial amount of money for EWC. For the agreed 15 year term, this translates to over US$2.5billion.