Ladies and gentlemen, thank you for standing by and welcome to the InterOil Corporation Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. And I would now like to turn the conference over to our first speaker, Vice President of Investor Relations, Mr. David Wu. Please go ahead, sir.
Thank you, Brad, and hello, everyone. This is David Wu, Vice President of Investor Relations.
Before we start, I want to briefly remind everyone that some of the statements made during this conference call constitute forward-looking statements within the meaning of the U.S. securities laws, including such statements as those regarding expectations of future results, general financial performance, future business prospects and strategies. These statements are based on management's current expectations and are subject to a number of risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements.
Investors are cautioned not to place undue reliance on these statements. Additional information about factors that could cause our results to differ materially from those in the forward-looking statements can be found in the company's filings with the U.S. Securities and Exchange Commission and SEDAR.
Our speakers on the call today are the Chief Executive, Dr. Michael Hession; Chief Financial Officer, Don Spector; Vice President Exploration, Dave Holland; and Exploration Advisor, Laurie Brown. We have a presentation to accompany our comments today. The presentation can be accessed on our website at www.interoil.com. You can find the link on the homepage. At this time, I'd like to turn the call over to Dr. Hession.
Thank you, David, and thank you to everyone on this second quarter earnings call. If we can go to Slide 4. I'm pleased to report today that InterOil is stronger and more focused than it was a year ago. It's also fully funded, indeed what you see today is effectively a new InterOil. When I joined the company 13 months ago, I spoke of the 3-step strategy that will set our targets for my first 12 months: stabilize the company, monetize our assets and secure our future. We're not there yet, but we are making good progress in all 3 steps.
We've stabilized the business while streamlining our structure and offices, redirecting our focus and attracting a first-class management team that had hit the ground running. We are monetizing our assets and relentlessly pursuing value. We've closed the deal with Total to develop PNG's second major LNG Project. We sold our refinery and downstream businesses for roughly $0.5 billion dollars. We have recapitalized our balance sheet with the support of international banks from Europe, Australia and Asia. We continue to secure our future through our material interest in the multibillion dollar Antelope LNG development. And we are well into the largest exploration in the [indiscernible] drilling program in Papua New Guinea's history.
Through that, my message is simple. The new InterOil is funded, focused and we have the right team.
To begin with Slide 5. Today, I will update you on where we are and outline where we want to be by the end of this year. First, we welcome our new Chairman-designate, Chris Finlayson. His appointment we announced at the weekend. Chris brings to InterOil nearly 40 years of exploration and production in LNG experience, including more than 15 years in leadership roles in the LNG industry. Importantly, he brings experience as the former Chief Executive of a FTSE 100 company, the BG Group, as the Director of Lloyd's Register and after a long global career as a Senior Executive with Shell. His background as a geologist, physicist, petroleum engineer and senior executive with super-majors and megaprojects, will provide invaluable focus and insight as we continue our transformation to a world-class explorer and producer.
I really like the thought of learning from him and crafting with him our vision for InterOil.
I would like, at this moment, to take this opportunity to thank Gaylen Byker, our current Chairman, who has been with InterOil for nearly 2 decades. Gaylen played a [indiscernible] role at InterOil and has been part of the company from the beginning. He recognized the time is right to renew with the board and he shares the board's view that Chris is a blue-chip appointment. In due course, Gaylen will hand over to Chris and we'll have more announcements of that change to our board, as some of our current directors are due to retire. And as with Chris, we will appoint people of exceptional character, skills and experience.
Second, I want to reflect on the key events and changes over the past quarter, which are in the accompanying Slide 6. At the end of our second quarter, we announced and signed and completed the sale of our refinery and downstream business to Puma Energy. All cash proceeds were received on the 13th of June. Importantly, Puma has a strong track record in refinery and distribution, and the acquisition ensures Papua New Guinea will continue to get quality service.
This sale allows us to be fully focused on our LNG development and exploration program. And it simplified and strengthened our balance sheet.
Additionally, we announced last month a buyback of our shares, such is our confidence in being able to deliver long-term shareholder value. And finally, last month, we announced that we encountered high pressure carcinogenic [ph] gas at Wahoo-1, such that we have to suspend drilling, albeit temporarily, for safety reasons. Wahoo is definitely encouraging and we continue to review options for resuming operations safely. We will provide more detail on Wahoo, Bobcat and Raptor as well as our large exploration program later in this call.
Third, let me turn to Elk/Antelope, [indiscernible] on Slide 7 and 8. As you can see from the pictures, we are making good progress on Antelope-4 and Antelope-5. The 2 appraisal wells we anticipate spudding in the second half of this year. Antelope-4 will test the [indiscernible] of Antelope field. And Antelope-5 will test the western plank. The wells will provide key information to certification of the resource and [indiscernible] potential future LNG development, which includes concept selection, basis of design and project engineering. We expect certification to be completed in the second half of 2015.
As you can see from the pictures, we are well advanced in spudding Antelope-4 and 5. The well pads and the camps are complete.
All joint ventures in PRL 15 are working cooperatively and constructively on the appraisal process, with the aim of developing the resource as quickly and optimally as possible. Now as you'll be aware, Oil Search has referred the validity of our transaction with Total to arbitration. That arbitration has been set down for a hearing in November 2014. We remain confident that our action will be successfully defended.
Finally, as we turn to Slide 9, I've asked 2 of our geological experts to join this call to provide an overview of our exploration strategy and to answer your questions. The first is Dave Holland, our Vice President, Exploration, who is well known to long-term individual investors. Dave has nearly 30 years' experience as an exploration geoscientist mostly in Papua New Guinea and has been with InterOil for the past 11 years. Dave is central, he was the central player in the Triceratops, Elk and Antelope discoveries.
The other expert is Laurie Brown, who's also an exploration geoscientist with more than 30 years in the industry. About a year ago, we asked Laurie to help us look into InterOil's assets base as an independent upstream specialist. [Indiscernible] background, Laurie has worked on international assignments with BP, 17 years, and has been a global consultant to Shell and smaller companies. Laurie has explored some of the world's most difficult and emerging provinces with the priority task of proving the basis and resources. He has been involved with major oil and gas discoveries in West Africa and Asia.
Laurie, Dave and the rest of our explorers have been reviewing our acreage, consolidating what we know and charting the future. Today, they will discuss what that picture looks like. And with that, I'd now like to hand over to Laurie and Dave.
Thank you, Michael. Hello, everyone. I'm Laurie Brown. I may have already met some of you, but to those that I haven't, it's a pleasure to talk to you. In my time, I've reviewed, peer-reviewed and managed the exploration strategies of onshore, offshore and deep water projects and new venture opportunities across Asia, Europe, the Middle East, Latin America, Africa and Australia. My history in PNG goes back to 1989 when I worked on the Western Papuan Basin for BP. I've been explorer to many emerging geographies, and I've seen several of these mature from virgin frontier areas to commercially successful and well-known established provinces. And through this, I've been involved in many discoveries. It's clear to me that the Eastern Papuan Basin in which InterOil has a dominant exploration position, is a classic emerging province. Now InterOil's immediate focus is on monetizing the giant Elk/Antelope gas condensate field, the largest discovery in PNG.
Indeed, I'm next to the guy who discovered that field, Dave Holland. He's a bit of a legend in the PNG oil and gas industry, and I'm proud to have worked with him for the past year. Together, we've been looking beyond Elk/Antelope, and we will give [indiscernible] to what we are seeing, during this call. In short, we believe Antelope is not alone.
On Slide 10, you'll see this presentation has 3 sections. First, we'll explain the basic geology of the Eastern Papuan Basin. Second, we'll give you an outline of InterOil's exploration history, track record, what we've learned and what's being done to unlock this province. Third, we'll look at what well may sit beyond Elk, Antelope and Triceratops. And finally, we will discuss how all of this lays the foundation for a well-considered exploration strategy to crack the code in this vast acreage and sub-optimally deliver further commercially focused and risk-mitigated success.
As part of this presentation, we'll also add details to the current drilling campaign in the context of this strategy.
Slide 11 looks at the geology of PNG, which is dominated by 2 major hydrocarbon basins, the Eastern Papuan Basin, where InterOil holds acreage, and the larger adjacent Western Papuan Basin. These 2 basins are separated by a major deep-seated fault, the Duau-Favenc mini event [ph]. The basin are quite discrete with different evolutions, which we understand. Each with different [indiscernible] components critical to success, different environmental conditions and operational challenges, and different exploration and drilling histories. But they both work. The Western Papuan Basin is being more heavily explored than its Eastern cousin, with about 280 wells, resulting in key discoveries at Hides, Juha, P'Nyang, Kutubu, Stanley, Elevala and Ketu, the last of which [indiscernible] geophysicist when it was discovered.
The Eastern Papuan Basin, on the other hand, is under-explored with about 65 wells, and has resulted in key discoveries at Elk, Triceratops and above all, Antelope. In our basin, the topography is relatively gentle, over highly structured subsurface with top cover that's conducive to acquiring good quality seismic, which we'll see later.
On the other hand, the Western Papuan Basin, has often rugged mountainous topography and surface cover that render seismic acquisition extremely costly and with poorer image quality. This is a cream [ph] discriminant between these 2 basins, providing us a significant advantage and valuable tool in our exploration efforts.
So let's now focus on our basin. If I could draw your attention to the left-hand side of Slide 12. Now in any basin, 3 core geological components are fundamentally critical to success. These are the source, the reservoir and the seal or cap rock. All 3 must be present and in the right order. And we can illustrate this albeit simplified as a Venn diagram where success is achieved only at the intersection of all 3 components, each color-coded in green. We call this the sweet spot. Two out of 3 won't work, and indeed, I've seen areas where all 3 may be present but the area fails because timing was wrong and the structure has been developed after the oil was generated. Now we've analyzed all of the well seismic, gravity and seepage data from our acreage. It's quite an extensive data list and then we've mapped out the distribution of each of these key components and where they all come together, the sweet spot. We then ground troop [ph] this against the hard data, the wells. It's a somewhat forensic analysis that focuses on sweet spots on which to target exploration. We call this common risk segment mapping. Though, the less technically minded might think of this as CSI for geology.
As a summary, we've mapped our source rock and we have 2 of them, as being present over 90% of our acreage. Our reservoir, and we have 2 of those too, over 70%, and our seal, the ore body, over 95% of our acreage. So with this in mind, let's look at a schematic section of the typical geology of the Eastern Papuan Basin. It looks like a complicated picture but we geoscientists understand how this basin has evolved over the past 200 million years and beyond. It's a fascinating story and involves several [indiscernible].
Firstly, the opening up or rifting of the Coral Sea which ends with the deposition of our source rock. Then the development of a tropical Great Barrier Reef style environment where our main reservoirs are developed. That's followed by submergence and flooding, sealing off and containing those reservoirs and finally, the collision of Australia, which generates massive restructuring, putting our traps in place. Now on this last point, trap formation, you might note the ellipses on the schematic over those areas where structures are developed. Please bear this in mind, because one of the tools we use, airborne gravity, sees these areas.
In short, all key components that are fundamental prerequisites to exploration success are present in the Eastern Papuan Basin and we're able to map them out. Clearly, Elk, Antelope and Triceratops discoveries are proof that this basin is working, but that's just the start. We see those same signatures potentially throughout the greater [indiscernible] position. We've unlocked all the data across the basin and we built a detailed portfolio of potential targets. Which is our prospect inventory. It's substantial and it's still evolving. But it's also timely and allows us to shed more light on our findings, particularly with 2 wells drilling and Wahoo temporarily suspended above potential reservoir.
The second section on Slide 13, history, focuses on InterOil's exploration results to-date, and it all starts with the acreage position. In 2003, InterOil secured tenure of a 32,000 square kilometers or 8 million acres, in the onshore part of the Eastern Papuan Basin, so I refer you to the light pink squares on the map. This was a vast position in what, at that time, was virgin frontier apart from a few largely shallow 1960s well and some surface seepage of oil and gas. They're the red dots, the red and green dots.
Now fast-forwarding to today, it turned out to contain a world-class discovery base and even after 50% well encashment [ph] to 16,000 square kilometers, or formally [indiscernible] InterOil still maintains a dominant position in the onshore part of this basin. Now note the equities in the table on the left. In its 4 exploration licenses, the PPLs, InterOil typically holds more than 65% in beach. It's commonly the [indiscernible] super-majors to tie up a version like this and hold high controlling equities. Seldom do we see the scale or materiality of position in a company of InterOil's size. Moreover, InterOil's secured tenure for the next 6 years, with an option for further 5. It's an unusual and extremely privileged position.
Now by way of scale, PRL 15, the home of Elk/Antelope, which is highlighted in yellow, is about 765 square kilometers, which is larger than Singapore. The company's total acreage covers 22 Singapores, or depending where you are, 10 Greater Londons or 13 New Yorks. It's vast.
Slide 14 deals with an ideal early reconnaissance exploration tool, airborne gravity. It's noninvasive, low-cost, can be acquired rapidly, and it responds well to our geology. It picks up 9 new changes in the earth's gravitational field in response to changes in the surface and the subsurface geology, which recalling those ellipses from a couple of slides ago, is exactly what we have in our area. Gravity sees these areas and we call them anomalies. More than 95% of InterOil's acreage is being surveyed with airborne gravity, if you've seen the [indiscernible] and from it, we've mapped more than 20 anomalies. They're the yellow blocks.
These anomalies can be very large and often encompass a trend, which may comprise several prospects. And as an example, Elk and Antelope are just 1 gravity anomaly. All 3 discoveries to-date, Triceratops, Elk and Antelope, were initially identified on gravity, such is the power of this technique.
Now since gravity was acquired here, technological advantage have materially improved gravity surveying techniques. And as a part of our exploration strategy, we're looking to deploy a much higher resolution technique called high-definition airborne gravity radiometry. And we intend to acquire this over our entire acreage position. We anticipate this will provide higher resolution, effectively find leads, locate seismic and make the prospect maturation process both cheaper and more efficient.
On Slide 15, we discuss seismic, a very different proposition to gravity. InterOil has acquired more onshore program seismic than any other company in PNG and has acquired more than 1,500 kilometers of two-dimensional data, or 2D, in the past 10 years, averaging 2 surveys a year. In fact, we're acquiring seismic right now. And we'll soon review our plans for the intensive seismic work we envisage in the future. Seismic is generally a very good quality in the Eastern Papuan Basin, which is unusual for PNG, and is therefore a critical predrill exploration risk-reduction tool.
On Slide 16, we have an example of the seismic line over the Antelope field. Seismic effectively provides a profile view of the section sliced through the earth. These 2 panels are actually the same seismic line. The lower panel shows part of the line, which traverses Antelope on the right, essential trend over target we call White Tail, and the third trend, the Raptor trend, which we're currently drilling. We can map these trends on seismic line after seismic line and we'll look at these in a short while.
The lower panel from 2007 is a typical data quality on which we drilled Antelope. The upper panel from 2013 shows what we can do with modern specialist reprocessing techniques. The difference is profound. We not only see the [indiscernible] to define the size of the structure, but we can now interpret further level of detail to see into it, and target wells on the sweet spots within it. We're looking to [indiscernible] -- they may have 20x the storage capacity of hydrocarbon compared to lesser quality reservoir at the same level but nearly close by. This better quality seismic is relatively recent from just last year and is yet to be applied to an evaluation of Elk/Antelope or to the rest of our inventory.
When it did, it will be a powerful predrill exploration risk-reduction tool in defining prospects and drilling locations.
While seismic is powerful, the ultimate test is clearly drilling. As you can see on Slide 17, InterOil has drilled 12 wells in the Eastern Papuan Basin. After an initial start 15% [ph] still on target, which is the yellow dots, we then set about drilling for limestones or carbonates, which is the blue dots on the map, and delivered and with success. In 2005, we discovered Triceratops, then Elk, and then Antelope in 2008. The excellent reservoir quality of Antelope is what set it apart from Elk, and this is where our seismic will now help us drill potentially straight into the sort of reservoir quality in fresh targets.
On Slide 18, we're looking at a zoomed-in subset around Elk/Antelope, extending out to Triceratops to the Northwest. It's an area of our richest data coverage and as so, is best constrained as an area we can delineate with some confidence. The map is a structural form of the top of our primary reservoir, highlighted previously on the seismic panel, and is color-coded with brighter colors, being shallower than lighter ones. And again, by way of scale, sitting in the highlighted PRL 15 area, the Antelope field is about 78 square kilometers or thereabouts. And the red circle is a 30-kilometer radius, indicative only as a potential tie-back distance, centered on Antelope.
Clearly, this is a core area on which to focus early to take advantage of attractive economics for tying back discoveries to a future Antelope development. The area is intensely structured with no less than 11 structures identified to-date developed along 3 discrete trends. They are the same 3 trends we saw in the seismic earlier. Only 3 of these 11 structures are being drilled to-date, and all 3 are discoveries. Interestingly, the area in this map concerning the 11 structures and 3 discoveries represent only 10% of our total footprint. We're currently drilling 2 more fresh exploration targets labeled in red: Bobcat on the same established trend as Antelope, and Raptor, the deepest of the 3 exploration wells we have operations on at the moment and a fresh test on a new trend.
Additionally, we're planning up to 5 additional explorations with variable wells in this immediate area. An appraisal well on Triceratops, 2 appraisal wells on Antelope, and subject to joint venture approval, the possibility of a third appraisal well, as well as an exploration well on the Antelope Deep prospect. Across our entire acreage, we currently identified about 40 potential targets in the prospect inventory. And while we have made discoveries, we cannot be complacent. We must anticipate failures, as well as successes. That is exploration.
While some prospects will drop off the inventory, as we do more detailed evaluation and as we high grade our portfolio in the pursuit of highest value, we're hopeful for the 3 prospects being drilled at present, Bobcat, Raptor and Wahoo is outlined on Slide 19. Our objective is to deliver maximum value at lowest manual risk and cost, with discoveries that might complement existing developments or stand alone in their own right. The focus is aggressive growth and value delivery through the drill bit.
Indeed, we see at least 10 years of high-growth exploration running room in this basin. It's now down to how we most optimally deliver value using smart exploration.
On Slide 20, we have more detail on current drilling. We made a solid start on our exploration strategy with PNG's most active exploration campaign and concurrent operations on 3 wells. But before we provide any operations update on these wells, a common theme affecting our drill performance I need to discuss is the Orubadi seal. Drilling through the Orubadi is extremely challenging, and the formation is aptly termed, our blessing and our burden. On the one hand, it's an unsung hero providing world-class seal capable of holding back enormous columns of gas, for example, 700 meters in Elk/Antelope. But on the other hand, it's a ductile, sticky, tectonically active mudstone which react with our going [ph] fluids. With the high tectonic stress, the hole can regularly change shape while we're drilling unless supported by very high [indiscernible], which in turn, can reduce the rate of penetration of the drill bit. And it's because of this, drilling is slow, and so we continue to review our methods to reduce drilling times.
With that in mind, let's turn to Bobcat and Raptor. Bobcat is a test of a seismic and gravity-defined structure on the proven trend between Triceratops and Elk. We're currently drilling in the Orubadi, our seal, which we have proven is present. High pressures are being encountered, which is common in heavily structured areas like ours. We're nearing but have not yet reached prognosed target depth. Patience is required.
Raptor in the first test of the fresh trend, the Raptor trend, west develop Antelope. Raptor is the deepest of the 3 wells, and here too, we're also drilling ahead in the Orubadi, which we've established is present. Being the deepest well, we still have quite a section to drill before we reach prognosed primary reservoir depth. So again, patience is required.
Wahoo, on Slide 21, deserves a slide of its own. At this point, I'll hand over to Dave, whose work was instrumental in our decision to drill this prospect. Dave?
David John Holland
Thank you, Laurie. As previously announced, we have temporarily suspended drilling at Wahoo after encountering exceptionally high pressures that threatened to compromise safety. We anticipate returning in due course following a thorough review and redesign of the well architecture to more appropriately lead the engineering requirements for the drilling in these conditions. Until then, what have we learned about Wahoo? The panel on the right, of Slide 21, is a seismic image across the Wahoo feature. At the time, we suspended drilling. We were still stratigraphically in the Orubadi seal, directly correlative to that, at Elk and Antelope. As such, we have proven 1 of the 3 major components Laurie discussed earlier, seal. Moreover, while drilling this lower section, we are encountering increasingly high concentrations of thermogenic hydrocarbons associated with the building pressure, a sign that we also have effective source rock in the area, a second major component. However, at this point in the well, with the pressures and gas levels building, we simply could not risk drilling ahead. And so we temporarily suspended drilling on the 14th of July, consistent with good oil fill practice.
We know from age dating the samples from the well that we are still in the Orubadi seal above the prognosed reservoir level. The unknown, that we intend to find out when we return is, is the carbonate reservoir present. Why -- while we will not definitely know this, critical third component is present [indiscernible] return, I draw your attention to the seismic profile on the left on Slide 21. This is a section across the feature called the Kapuri reef, just 25 kilometers west and offshore from Wahoo-1. This is a classic expression of a reef buildup. You can clearly see the [indiscernible]. The Kapuri-1 well was drilled by Philips in 1968 targeting this feature. And the well encountered caroline refill limestone with excellent reservoir properties: high porosities and flow capacity. But this well was dry. Why? Almost certainly, because the structure had no Orubadi seal to contain the hydrocarbons. Indeed, the seismic component of Kapuri suggests that the hydrocarbons have escaped through what we term a gas chimney.
This clearly demonstrates the critical importance of the presence of the Orubadi seal that we have now proven at Wahoo. It is interesting to compare the Kapuri feature, which we know is a reef, and with great reservoir to that -- to the seismic expression of Wahoo. They show similarities that encourage us to continue the drilling of Wahoo to test for potential reservoir. Success at Wahoo would materially derisk the many potential targets we have identified between it and Elk and Antelope to the Northwest.
Thank you. Laurie?
Thanks, Dave. In wrapping up, if I can make a series of points: One, Elk-Antelope, PNG's largest discovery, has put the Eastern Papuan Basin firmly on the map as an exciting emerging province.
Number two, InterOil dominates this basin with material high equity positions and secure long-term tenure.
Three, InterOil, by far, has the best knowledge of this basin and a record of discoveries and an understanding of how to crack the code for more.
Four, all 3 components critical for success: source, reservoir and seal, can be mapped to varying degrees across InterOil acreage, and this is the key to cracking that code.
Number five, InterOil's prospect inventory is deep and wide with currently about 40 potential targets, providing more than a decade of high-growth running room; in our view, Antelope is not alone.
Sorry, number six, further exploration success is to be expected, but so too is failure; that's exploration.
Number seven, our exploration strategy is focused on sequencing delivery of further risk-mitigated commercial successes.
And finally, InterOil has the focus, the funding, the team and the skills to deliver on its world-class asset position.
Thank you [indiscernible]. Well, Laurie and David would be happy take your questions shortly. And of course, the key to success for an exploration company is the ability to find hydrocarbons and turn those hydrocarbons into money, and to do that, with financial discipline.
In the new InterOil, we are absolutely determined to pursue value. And nowhere is the pursuit of value more profound than in the remit of our Chief Financial Officer, Don Spector. Don will now walk you through our current financial position, which is stronger than ever, and detail how we intend to fund our major strategies.
Don, over to you.
Okay. Thank you, Michael, and welcome to everyone listening to today's presentation. The second quarter of 2014 saw 2 significant events from a financial perspective for our company. The first was the refinancing of the Crédit Suisse-led facility. This facility was upsized to $300 million, and we were able to lock in a rate of LIBOR plus 5% to apply for each full turn.
The second was the completion of the sale of the shares in the companies that held our Refinery and Downstream operations. This deal was signed and completed on the 30th of June, with payment of the $525.6 million being received on that day. These 2 events will allow our company to focus its attention on the Upstream side of the business, with the knowledge that we are well funded to undertake the extensive drilling program we have now commenced.
Before we look at our financials in a bit more detail, it's also worth mentioning that subsequent to the end of the quarter, we also announced a share buyback of up to $50 million. I'm pleased to be able to say that this has been progressing very well since it was commenced in July.
If we turn to Slide 24 and have a look at our performance for the quarter, the company made a profit of $52.3 million for the quarter with a profit on the sale of the Refinery and Downstream operations contributing $49.5 million to that number. For those of you that have a copy of the account, a detailed explanation of the profit calculation is set out in Note 4.
From an accounting perspective, the sale of the Refinery and Downstream operations represents a disposal of what is called a major line of business, therefore, requiring us to disclose all activities in relation to the Refinery and Downstream as discontinued operations.
As you will see from our accounts, we will now show that profit and loss for continued operations, being the Upstream activities, and then we will certainly disclose the profit and loss from the discontinued operations. This form that will be used once we have acquired the share of the Refinery and Downstream operations for comparative purposes.
From a segment perspective, Corporate and Upstream will now be reported as one number.
The other point to make on this slide is the profit for the 6 months ended 30 June. As you can see, it was a very healthy $370.9 million.
Turning to Slide 25. Let's take a look at our current liquidity position. The first 6 months of 2014 have seen the following events: receipt of the $401 million completion payment from Total; receipt of the $525.6 million completion payment from Puma Energy; repayment of $150 million that was outstanding under the original Crédit Suisse-led facility; refinancing that facility and upsizing it to $300 million; and repayment of all loans and commitments we had in respect of the Refinery and Downstream operations. These events have resulted in our financial position at 30 June, 2014 being as follows: We had $585 million in cash, and the $300 million Crédit Suisse-led facility was fully undrawn. For a total of $885 million of capacity sitting on the balance sheet on that date.
So let's take a look at our respective commitments after the end of 2015. The convertible notes are due for redemption in November 2015. With the share price at $95 and above, we would expect the notes will convert. With a share price of less than $95, we will make a cash payment of approximately $70 million to redeem the notes.
In July, we announced a share buyback of up to $50 million. To-date, we have spent approximately $41 million in acquiring shares at a weighted average price per share of $57.17. It is worth making the comment here that the buyback is a very effective capital management tool to monetize -- to minimize either the dilution or the cost impact of the redemption of those convertible notes in November next year.
Our drilling and G&A costs are expected to be in the range of $250 million to $300 million during this period. From a drilling perspective, this incorporates the 8 wells we have previously announced as part of that drilling program. We also need to remember that we have a substantial carry from Total on the PRL 15 wells during this period. Now the forecast of our expanded commitments will obviously be firmed up later this year when we approve our budget for 2015.
And then finally, from a revenue perspective, the first certification payment is expected be received from Total during the second half of 2015. And as you can see from these numbers, our company is in a very solid position financially to be out of focus on the extensive drilling program we have now commenced.
So on that note, I'll hand you back to Michael.
Thank you, Don. Now that concludes the formal part of our presentation. What I'll now do is hand over to the operator who will take your questions.
[Operator Instructions] And our first question today comes from the line of Evan Calio with Morgan Stanley.
Evan Calio - Morgan Stanley, Research Division
My first question, you issued the buyback in the quarter, and I know that was partially to offset future dilution. But any -- but how do you think about the intrinsic value of InterOil? And given that you'll likely need those funds in future development, I mean, how do you think about the returns of buying your stock versus spending it in the field?
Evan, I'll take that call -- I'll take that question, if you like. Just as we mentioned in the presentation, we view the buyback as a very effective capital management tool to minimize any sort of dilutional cost impact in relation to the redemption of the convertible notes, which as I mentioned, in the period in [indiscernible] of '15. Now that is potentially at a price of $95 a share. Now we gave ourselves 12 months to complete this process. In reality, because of what we consider to be reasonably contracting prices, we have expended a large amount of the buyback early on in that process. So it's probably fair to say that from our perspective, we're sort of pretty happy with the way that process has gone to date. So we're -- the concept of using it as a capital management tool, we believe, has worked very well.
Evan Calio - Morgan Stanley, Research Division
I got it. And maybe it's a technical question. I mean, what is needed to test exploration acreage on the equipment basis, whether it's rig or services you mentioned, Orubadi is it harder to drill through the higher pressures? I mean, there's -- what's needed to -- what do you need to obtain, and has that delayed the timing, the sequencing of rigs that you laid out at your June shareholder meeting?
Well, that's a very good question, Evan. We're always looking to optimize our rig performance and always to make sure we get the best value out of our rigs and our equipment. And let me assure you, we've got the rigs available, their ongoing contracts are being negotiated, examples would be the rigs we've got with High Arctic and Western Drilling, and we believe we've got the appropriate equipment to test what's a very, very exciting portfolio.
Evan Calio - Morgan Stanley, Research Division
Right. So you still contemplate Antelope-4 and 5 down by year end and potentially spudding, I guess, 6 was into the first quarter of 2015. Is that still what your envisioned time frame?
Yes, that's absolutely reasonable. As we said in the presentation, we'll be spudding these wells in the second half of this year. Antelope-6, that's subject to joint venture agreement, and we're working through that joint venture at the moment. I would anticipate [indiscernible] joint venture agreement that, that would occur probably in the first quarter of next year, first half of next year.
Evan Calio - Morgan Stanley, Research Division
Okay. And maybe one last one, and appreciate all the additional disclosure on the exploration. I think that was helpful. And then a question for your probably [ph] guest geologists on the call. On the Antelope appraisal -- I mean, when you look at the of appraisal wells, at least 2 defined to be drilled. What is the higher risk, higher return potential well of those 2? And we've obviously seen different estimates on a resource basis, but -- I mean, what do you think is a reasonable upside scenario in the Elk-Antelope discovery based upon what you've seen?
I'll take that one. As we said, then -- these 2 wells, they're going to be testing the western flank and effectively, the BRV is on the southern end of the field. When you ask me what the reasonable upside is, well, you're well aware of the range we've got, and the -- we'll see what these wells deliver. I'm not really going to get into the hypotheticals of what they will deliver. We'll be finding out soon enough, Evan.
And we do have a question from the line of Pavel Molchanov with Raymond James.
Pavel Molchanov - Raymond James & Associates, Inc., Research Division
It's obviously taking about 5 months now for the 2 wells that are still drilling. What gives you confidence that you'll be able to finish drilling and complete the wells by the end of the current quarter?
Thank you very much, Evan (sic) [Pavel]. Again, another excellent question. Oh that's Pavel, excuse me, Pavel. I apologize. What gives me confidence? Well, we are making good progress that Bobcat is testing the turn between Elk and Triceratops. The conditions are challenging, but we are progressing and we're nearing the prognosed target depth with respect to Bobcat. Raptor, as you know, and as Laurie and Dave have both described, is testing a new a trend. It's [indiscernible] with the 3 wells and the Orubadi, I think the guys called it as our blessing and our burden, is certainly challenging. But again, we are making progress. I'm feeling confident that we will get to target. I'm not going to get into the exact date, but I'll let you know that we are making progress, and I'm confident we'll be there testing these very exciting prospects in the not-too-distant future. So let me finish by assuring you that when we have material information in our wells, we will disclose it. That's what we do here in InterOil.
Pavel Molchanov - Raymond James & Associates, Inc., Research Division
Okay. For my followup, let me ask kind of a high-level question. You mentioned first LNG based on your current timetable would be in 2020 or 2021. There is obviously a great deal of LNG development taking place in some in North America, some in -- on the East Coast of Africa, and obviously lots and lots in Australia. Are you comfortable and is, maybe more to the point, is Total comfortable that there will be sufficient demand to support the economics of this project that wouldn't start up for another 6 or 7 years?
Pavel, you raised a really important point, and let me answer it in the best possible way I can. I'm not here to talk about what Total thinks or other joint ventures. But let me give you our opinion, and I think it's reasonably aligned to the other joint ventures. The answer in one word, is yes. LNG, it really is the fuel of Asia, and it comes down to some very, very simple fundamentals. We are in a gas-long basin, in the belly of a gas-short continent. That continent needs energy. And as we've seen, LNG is a fuel that is increasing in its demand throughout Asia. So we are -- we're very confident that we'll be in a position to get this gas a way. And not only that, you could understand where we are, it means we've got what I believe will be the most competitive gas on the globe to be delivered into Asia. So again, we are very, very confident that this gas will be got a way, and it will be a very attractive commercial proposition for us and then we also believe the Total and oil search.
And We do have a question from the line of Chris McDougall with Westlake Securities.
William Christopher McDougall - Westlake Securities LLC, Research Division
So Michael, I wanted to get a little bit of color on the Chairman search. So how extensive -- was the search -- congratulations on signing Chris up there. And give us any -- any other color around the search? So how extensive were there past working experiences between the current management team and Chris -- any other color would be great.
Well, great. Thank you very much for that question. I'm going to start with the fact that we are really pleased to have Chris Finlayson on board. I mean, we really do believe that it's a blue-chip appointment. I mean, Chris has got nearly 40 years' experience in this business, and he's been the Chief Executive Officer of BG, a FTSE 100 company. And again, it's BG. And his experience there in LNG is going to be absolutely pertinent to what we're going to do on our future strategies for this company. With respect to the search, as you would expect, we followed a structured process. There was a large amount of interest and we were absolutely delighted with the caliber of the candidates. But I'm going to return to Chris. Chris is really is blue chip, and I'm looking forward to working with him and crafting the future of InterOil.
William Christopher McDougall - Westlake Securities LLC, Research Division
So yes, I appreciate that and certainly gathered that out of the kind of initial information. How involved do you -- has he been so far? And how involved going forward do you expect him to be on a kind of ongoing basis?
Well, I think, to my point, we will disclose all material information when it becomes valid or relevant. And as you know, Chris joined us over the weekend, so Chris has only just on board. Chris will be joining us at the next board meeting. And Chris has been very, very diligent and has been doing the DD on our company for some time. But in terms of active participation on the board, well he's only been on board for technically 3 days.
William Christopher McDougall - Westlake Securities LLC, Research Division
Fair enough. Okay, and then moving on to the exploration program. So we've -- the wells have taken a while, we've talked about all the reasons behind that. I understand that one of the complicating factors might be somewhat older, lower power rigs for one or multiple of exploration wells. Is one possible scenario for Wahoo-1 to upgrade that rig before going forward? Or what are the -- what is the expected change that will allow to restart that drilling?
Okay. Well, We're obviously keen to get back as soon as possible to Wahoo-1. But as I said on numerous occasions, Chris, we're going to go back, and we're going to do it safely. That's absolutely important that we're going to do it safely. Now we've got a team reviewing the geology. I mean, I think Dave Holland gave you some good color early on today. We're just above the prospective target. The seal has come in. We're seeing [indiscernible], and relative view, that this is extremely exciting. But we're going to go through this very carefully. And as I've said before, we'll get back to it as soon as possible, we'll get back to it safely. And when we have a plan in place, as I said, we're still reviewing the information and the data, we'll be letting the market know how and when we'll be going back to Wahoo.
William Christopher McDougall - Westlake Securities LLC, Research Division
Okay, great. And then -- and moving on to the potential development of Elk and Antelope after the recertification and, hopefully, FID on an LNG project. So the fact that you've started the share buyback plan and progressed it rather quickly, I guess I have 2 questions on that. One, would you anticipate expanding that program? Or is this really sized correctly at the $50 million level to match more or less the convert that's outstanding? And two, the fact that you felt comfortable going forward with those uses of funds, does that imply more comfort on the size of the resource payment post recertification for Elk and Antelope?
Chris, it's Don Spector. I'll take that question for you, if you like. Going back to the buyback, around the size of that, it's correct that we are obviously looking at that as regards to convertibles. So it's fair to say that we're not intending to increase the size of that buyback at this point in time. We're sort of pretty happy with where that is and how that's progressing. So as we look forward, that is sort of correct to say that resource payment next year, that's going to be our next step change from a revenue perspective. We don't know what the size of that payment is going to be today, but that's why we're doing these little appraisal wells. So we'll consider those appraisal wells to be able to make out to the certification process, we'll get into the second half of next year and then we'll know exactly what the size of that payment is.
Yes. I mean, the only thing I'd add to that for Don and the [indiscernible]. And as Don took us through the presentation, we're well funded. We're fully funded for all the foreseeable activity, and we feel very confident that we'll be able to get through that activity very efficiently.
And ladies and gentlemen, for closing remarks, I'll now turn the conference back to Dr. Michael Hession. Please go ahead, sir.
Thank you very much. And thank you for coming on the call tonight. In each of our previous presentations, we've spoken of the need to stabilize, monetize and secure our business. So let me conclude by looking again at what we've achieved in the past year and indicate how we will again shift gears in the next year. You've heard me say that the first step of our strategy is about stabilizing our company. Well today, we have a stable company. We are funded, and we're focused. And the next year, you'll hear me talking more about optimizing our business; optimizing our business in the relentless pursuit of value. We will optimize every part of our business, from seismic and drilling, supply chain, human resources, accounting, IT.
InterOil is poised now to take advantage of its potential. We are funded, we're focused, and we have the right team. And we're about to take the next step to being a premier oil and gas company in the Asia Pacific.
So with that, I'd like to thank you all for coming on the call tonight.
And ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using the AT&T Executive TeleConference service. You may now disconnect.
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