png gas assets, page-2

hey entropylord...
good post...
your numbers are good...
thanks for that, interesting angle you took...

Ive sat down for a good hour and written a post off the top of my head replying to your post and adding bits in relating to our great PNG assets, that we here have known about for ever, and the HZN sale to confirm our beliefs... and the progress of PNG LNG to support a clear development path for KIMU, Barikewa.........
I have also added what I think will happen... I have made some assumptions and estimates of PNG LNG time frames on what I believe will happen... I reckon PNG LNG will proceed exactly how Oil Search outline......
because Exxon, and all the big boys are in on this who dont stuff up

my timeframes are estimates, for example on what size CUE's revenue flows would be...


"Now the tough question - are the assets equivalent value on a bcfe basis?"

Entropylord.
No HZN's assets are not of equivalent value on BCFE..
Because HZN have 21 Million barrels of associated liquids, the conversion to BCFE is only the conversion of energy, not the conversion of price.. This is the same as BOE conversion.... Liquids fectches a far higher price per BCF equivalent......
so You then cant say that CUE's assets are worth this much or that much using the price from the HZN sale...
CUE's BCF figure of 150 BCFE is gas only, unlike HZN's which is made up of liquids........
...

Stanley should be in production within 2 years? ... ours are realistically 6-7 years from production... S E Gobe gas will be earlier than that...

There is alot happening... late this year Final Investment Decision will be made on PNG LNG (FID)...
FEED completed end of 3rd quarter...
and construction of this giant project will begin at the beginning of 2010...
and we will be put on the map...

it is such a giant project, that we will have to wait years and years for development stage to be complete... but over the years we will rerate, because we will de-risk our PNG assets at each step as we get closer to production....

construction of PNG LNG, (and phase one-even though we are not involved there) is very important...
we will be dealing with a revenue stream 7-10 times larger than the current market cap, with upside on that (Cobra) ...
....


"CUE state nothing on gas liquids ratios??"

Entropylord,
Barikewa and Kimu are proven gas fields only...
no Liquids...
Only Cobra is a gas and Condensate discovery...
S E Gobe has current oil production... and S E Gobe gas will be developed seperately....

"Barikewa is clearly the key CUE asset (4 x greater than Kimu), and looks well located. OSH and STO each have a large stake which is good imho, but Exxon isn't in which I assume pushes it well back in the LNG queue?"

entropylord,
PNG LNG will develop the bigger gas
fields first....
Hides, Angore and Juha fields and the associated gas resources in the currently operating oil fields of Kutubu, Agogo, Gobe and Moran...


S E Gobe gas (2.5 BCF) or only 450,000 BOPD will be our first production revenues from the project, and I presume that should be during some stage of 2014 on the back end of the developments ive said...
...Kimu and Barikewa come online one to two years later... 2015-2016...

anyway...
618 BCF would have earnt HZN around 3-3.5 billion dollars in revenues over its life term, and they sold half now for $55 million US... ive made a calculated estimate of that number...

our 150 BCF (2P), Cobra, and SE Gobe... could be up to one billion in revenues... esp in time if contract prices are higher, which they are forcasted to be...
a low $4 per mcf we have $600 million on current certified reserves...
... Kimu 3P was around 700 BCF last time I saw...
The smaller PNG gas fields going into production after phase one are around 1 TCF in size...

and we roll with OSH...

Hey... we have Oyong gas production coming online this year, and this will be a "thanks for coming buddy"- type operation...
Santos are running this, and this production stage start up will be clean sailing...
just like OMV with our Maari production startup...
we are taken care by big boy operators

HZN going at it alone...
lets hope they get this right...
Id rather take this slow, and get this done right with Oil Search leading us... rather than HZN, and some outfit from Thailand...
cant get into trouble that way...

look at all the production stage stuff ups over the last few years...
How many can you think of that stuffed up when the Big boys were involved...?
This is also why I like TSV...

As for CUE.... our projects have whopper JV's partners who get the job done...

So far this key factor, has proved me right with my investment...that is why I had the confidence to load up...

oh well...
these are my thoughts...
good post Entropylord.....
...




hey Entropylord...
I have a few questions for you...


would you feel comfortable with Horizon as operators of a project like stanley?
and do you know anything about the outfit that farmed in?




Ive thought about HZN alot over the last year...
and ive weighed it all up in my mind, and on paper.....
I still think CUE is better overall, more diverse (therefore less risk)...

we are not just Maari, and PNG...

we are indonesia, and Cash Maple 120 BCF (2P)
also......
we now have clear development paths for all apart from Cash Maple, and Jeruk... if we get this proven gas resource of Cash Maple into development then we will seriously on our way to one dollar per share within 5-7 years...

is a lower risk 100% return per year worth waiting on...
I think so...
we are already running now...
CUE should be 25-30c later this year...

Based on HZN's announcement...

CUE is worth 40cents...
we already knew that right?

our proven 54 Million Barrels (BOE-and 2P) in the ground assets take time to get out...
90 million market cap...

do the sums...

thanks...
It would be good to get some quality input around here....
hell yeah... can you please post us a chart, and tell us if CUES officially broken out? you seem to be good at describing the ebb and flow of the SP's movements...