Bernstein says 2-D seismic data appears to show the structure of IOC's Elk and Antelope fields is substantially larger than mapped under previous resource estimates, and could hold enough gas for a two-train development.
The commentary includes a long interview with CEO Michael Hession, who lists IOC's attributes: "Transparent company, valuable resources, clear targets, and now it's about delivering."
Teck Resources (TCK) is said to be lining up a $4B-plus cash offer, with advisor BAML after reaching agreement with IOC’s 19.8% shareholder Chandler Corp. and holding several meetings with IOC management about transacting a friendly deal.
Shell (RDS.A, RDS.B) also is mentioned as a potential bidder; it would have plenty of cash after the sale of its Italian retail business to Kuwait Petroleum and if it disposes of its 23% (£3.95B) stake in Australia's Woodside Petroleum.
In related news, Reuters reports the country has decided to raise A$1.68B to pay off a bond it issued to Abu Dhabi in 2009 instead of giving up a strategic stake in oil and gas producer Oil Search (OISHF, OISHY).
Royal Dutch Shell (RDS.A, RDS.B), Total (TOT) and Woodside are said to be eyeing a possible stake in Oil Search, which owns a 29% stake in the $19B PNG liquefied natural gas project.
Oil Search International (OIS) says it is in talks about getting involved in development of the Elk and Antelope oil discoveries in Papua New Guinea, which may contain more than 5T cu. ft. of natural gas.
Just three days ago, InterOil (IOC) agreed to sell a majority interest in the discoveries to Total (TOT) in a deal worth up to US$3.6B, depending on how much gas is confirmed to be there.
TOT had hinted at a selldown when confirming the deal with IOC but didn’t name a prospective partner; one way to facilitate OIS’s entry into Elk-Antelope could be an equity swap involving part of its stake in the Taza oil and gas discovery in Iraq's Kurdistan.
The press release issued by IOC reads little like the one issued by TOT: Total says depending on the results of the delineation of the Elk and Antelope gas fields, "this could lead to a final investment decision by 2016 for the development of the fields and the construction of a liquefaction plant located onshore on the Gulf of Papua."
InterOil (IOC) +4.5% premarket after reporting a Q3 loss but with better than expected revenues.
On Papua New Guinea: "Negotiations with a number of supermajors regarding the monetization of our gas resources are in the final stages. We expect to be able to make an announcement on the selection of our development partner before year-end."
As the exclusivity arrangement has lapsed in InterOil's (IOC +4.6%) ongoing negotiations with Exxon Mobil (XOM) in Papua New Guinea, Upstream reports Royal Dutch Shell (RDS.A, RDS.B) has rejoined the battle for IOC's natural gas resources in the country.
A Platts report in May had indicated Shell was a frontrunner in winning a share of IOC's LNG project in the country, but no similar reports followed.
InterOil (IOC -5%) bounces a bit from session lows after responding to an earlier report from Papua New Guinea that said Exxon Mobil's (XOM) exclusive period for negotiations for a large stake in the Elk-Antelope fields had passed without a deal.
IOC says it does not to comment on market rumors or speculation, but negotiations with XOM regarding an agreement to monetize the Elk and Antelope fields are ongoing.