MORE OIL IN PNG

MORE OIL IN PNG

Anonymous
Anonymous

October 28th, 2006, 4:37 am #1

FROM INTEROIL WEBSITE

ELK GAS CONDENSATE DISCOVERY
____________________________________

Elk #1 Discovery Status Summary
(Gas and Condensate Confirmed)
– InterOil announces a gas and gas liquids discovery at the Elk #1 well, Papua New Guinea, in June 2006 with a flow test
confirming gas and condensate to surface.
– On October 16, 2006 after additional drilling a second drill stem test, DST #2, was performed over the open hole interval
from 5,381 to 6,090 feet.
– The well flowed 21.7 MMcfd through 2 ½ inch ID drill string at 1,200 psi of pressure through a 60/64th inch choke.
– The well produced high quality stabilized condensate with a gravity of 49 to 46 API.
– Shut-in surface gas pressures have remained consistent in the range 3,150 psi to 3,165 psi throughout testing since
June.
– The drilling has indicated approximately 709 feet of gross limestone reservoir, with the top of the Puri Limestone at
5,471 feet (1,668 meters).
– Down hole tools recorded detailed bottom hole pressure and temperature data which are currently being retrieved.
– The Australian Government research agency, CSIRO, analysis indicates the Elk condensate originated in the peak to
late oil generation window of the source rock, materially increasing the possibility of an oil leg deeper in the Elk structure
and/or the adjacent Antelope structure
– InterOil plans to run a preliminary test string of 5 inch production tubing to enable a larger condensate and gas flow test
on the Elk well, as the current 2 ½ inch ID drill pipe test string restricted the flow of gas and condensate production.
Information from the Elk well to date is very encouraging. The test reports are only partially complete at this
date. Additional data will be obtained and continued interpretation will be done. Logging and more testing
through a larger production string will be done over the coming weeks.

Well Test Data: 7” Flow 1stDST 2nd DST
• Estimated bottom hole pressure 3,700 psi 3,700 psi 3,750 psi
• Wellhead surface pressure 3,150 psi 3,150 psi 3,165 psi
• Calculated AOF 150 MMcfd 150 MMcfd To be determined
• Sample test – Flow 50MMcfd 7.1MMcfd 21.7MMcfd
• Pipe size 7 inch 2 ½ inch ID 2 ½ inch ID
• Pressure 2,000psi 500 psi 1,200 psi
• Choke size 1 ¾ inch 48/64 inch 60/64 inch

Detailed Test Data
(Appendix)
Current and past test data:
• DST 2: The following are the results of DST #2 conducted to 16th October 2006
– Surface pressure 3,190 psi through a 3 1/2 inch drill pipe test string (2 1/2” ID), stable at 3,165 psi
– Gas and gas liquids to surface with a stable flow rate of ~21.7 MMSCFGPD@ 1,200 psi with a 60/64th inch choke,
tested through 2 1/2 inch drill string, stabilized condensate gravity 46 API
– Gas and gas liquids to surface with a stable flow rate of ~15 MMSCFGPD@ 2,440 psi with a 34/64th inch choke,
tested through 2 1/2 inch drill string, stabilized condensate gravity 47 API
– Gas and gas liquids to surface with a stable flow rate of ~10 MMSCFGPD@ 2,830 psi with a 26/64th inch choke,
tested through a 2 1/2 inch drill string, stabilized condensate gravity 50 API
– No pressure depletion was observed from surface pressures throughout the test and subsequent build up.
– Stabilized condensate liquids of 49 to 46 API were recovered during the test and are undergoing further lab
evaluation.
• DST 1: The following are the results of DST #1 conducted between June 22 and 24, 2006
– Surface pressure at 3,150 psi recorded on 7 inch casing
– Estimated bottom hole pressure of 3,700 psi
– Gas and gas liquids to surface with an estimated flow rate of ~ 7.1MMSCFGPD @ 500 psi, through a 48/64th inch
choke, through 2 1/2 inch ID drill pipe, with a further downhole restriction of a stuck tool to limit the flow rates.
– Estimated Calculated Absolute Open Flow (CAOF) for gas was calculated at 150 MMSCFGPD
– No pressure depletion was observed from surface pressures throughout the test and subsequent build up.
– Hydrocarbon liquids were recovered during the test and confirmed origination from a source in the peak to late oil
generation window.
• JUNE 11th 2006 flow through 7” casing
– Gas and gas liquids to surface with an estimated flow rate of ~ 50 MMSCFGPD @ 2,000 psi, through a 1 3/4 inch
choke.
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Anonymous
Anonymous

October 28th, 2006, 6:09 am #2

http://www.interoil.com/

All information are on this link.
Can we have comments from Sir Moi Avei's office on the status and development plans please?
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Ipmendnong
Ipmendnong

October 28th, 2006, 4:59 pm #3

What is the use? Will the inclusion of this one oil discovery stir the stagnant waters of apalling standard of living and failing country's economy? Will it result in some tiny ripple that will be strong enough to service my main road from Mendi town to Lai Valley that more or less looks like a bush track? Will that ripple reach me at the shoreline and make rice and tinfish affordable? Or will this one be just like all the others? No effect at all on the poor commoners life..infact the trend is steepply the other way around. My friends from overseas tell me how lucky I am to come from a resource rich country, minearl, oil, agriculture, the lot....I just tell them it's like fetching water in a jar, there's a hole somewhere at the bottom that you do not know of...hours go by you stand there with your water jar..wondering why it is not full.
You say hooray oil has been discovered, hooray gold has been struck and I say whatever..
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Anonymous
Anonymous

October 30th, 2006, 10:45 pm #4

FROM INTEROIL WEBSITE

ELK GAS CONDENSATE DISCOVERY
____________________________________

Elk #1 Discovery Status Summary
(Gas and Condensate Confirmed)
– InterOil announces a gas and gas liquids discovery at the Elk #1 well, Papua New Guinea, in June 2006 with a flow test
confirming gas and condensate to surface.
– On October 16, 2006 after additional drilling a second drill stem test, DST #2, was performed over the open hole interval
from 5,381 to 6,090 feet.
– The well flowed 21.7 MMcfd through 2 ½ inch ID drill string at 1,200 psi of pressure through a 60/64th inch choke.
– The well produced high quality stabilized condensate with a gravity of 49 to 46 API.
– Shut-in surface gas pressures have remained consistent in the range 3,150 psi to 3,165 psi throughout testing since
June.
– The drilling has indicated approximately 709 feet of gross limestone reservoir, with the top of the Puri Limestone at
5,471 feet (1,668 meters).
– Down hole tools recorded detailed bottom hole pressure and temperature data which are currently being retrieved.
– The Australian Government research agency, CSIRO, analysis indicates the Elk condensate originated in the peak to
late oil generation window of the source rock, materially increasing the possibility of an oil leg deeper in the Elk structure
and/or the adjacent Antelope structure
– InterOil plans to run a preliminary test string of 5 inch production tubing to enable a larger condensate and gas flow test
on the Elk well, as the current 2 ½ inch ID drill pipe test string restricted the flow of gas and condensate production.
Information from the Elk well to date is very encouraging. The test reports are only partially complete at this
date. Additional data will be obtained and continued interpretation will be done. Logging and more testing
through a larger production string will be done over the coming weeks.

Well Test Data: 7” Flow 1stDST 2nd DST
• Estimated bottom hole pressure 3,700 psi 3,700 psi 3,750 psi
• Wellhead surface pressure 3,150 psi 3,150 psi 3,165 psi
• Calculated AOF 150 MMcfd 150 MMcfd To be determined
• Sample test – Flow 50MMcfd 7.1MMcfd 21.7MMcfd
• Pipe size 7 inch 2 ½ inch ID 2 ½ inch ID
• Pressure 2,000psi 500 psi 1,200 psi
• Choke size 1 ¾ inch 48/64 inch 60/64 inch

Detailed Test Data
(Appendix)
Current and past test data:
• DST 2: The following are the results of DST #2 conducted to 16th October 2006
– Surface pressure 3,190 psi through a 3 1/2 inch drill pipe test string (2 1/2” ID), stable at 3,165 psi
– Gas and gas liquids to surface with a stable flow rate of ~21.7 MMSCFGPD@ 1,200 psi with a 60/64th inch choke,
tested through 2 1/2 inch drill string, stabilized condensate gravity 46 API
– Gas and gas liquids to surface with a stable flow rate of ~15 MMSCFGPD@ 2,440 psi with a 34/64th inch choke,
tested through 2 1/2 inch drill string, stabilized condensate gravity 47 API
– Gas and gas liquids to surface with a stable flow rate of ~10 MMSCFGPD@ 2,830 psi with a 26/64th inch choke,
tested through a 2 1/2 inch drill string, stabilized condensate gravity 50 API
– No pressure depletion was observed from surface pressures throughout the test and subsequent build up.
– Stabilized condensate liquids of 49 to 46 API were recovered during the test and are undergoing further lab
evaluation.
• DST 1: The following are the results of DST #1 conducted between June 22 and 24, 2006
– Surface pressure at 3,150 psi recorded on 7 inch casing
– Estimated bottom hole pressure of 3,700 psi
– Gas and gas liquids to surface with an estimated flow rate of ~ 7.1MMSCFGPD @ 500 psi, through a 48/64th inch
choke, through 2 1/2 inch ID drill pipe, with a further downhole restriction of a stuck tool to limit the flow rates.
– Estimated Calculated Absolute Open Flow (CAOF) for gas was calculated at 150 MMSCFGPD
– No pressure depletion was observed from surface pressures throughout the test and subsequent build up.
– Hydrocarbon liquids were recovered during the test and confirmed origination from a source in the peak to late oil
generation window.
• JUNE 11th 2006 flow through 7” casing
– Gas and gas liquids to surface with an estimated flow rate of ~ 50 MMSCFGPD @ 2,000 psi, through a 1 3/4 inch
choke.
Oil flows out, miseries stay;

Despite its rich mineral resources which are now being commercially exploited, Southern Highlands province remains impoverish,
writes JAMES APA GUMUNO

CRUDE oil from Southern Highlands province has been flowing into Kumul terminal in Gulf province 24-hours a day, seven days a week for the past 15 years bringing in millions to the oil company. However, a windfall of benefits from this wealth is yet to be enjoyed by the local people. The way it goes right now, they might not enjoy it at all during their lifetime.
A recent trip by this writer to the oil-rich district of Kutubu discovered that the life of the landowners -- the pipeline landowners in the Upper and Lower Foe --- has not improved at all.
There are only few tangible proofs to show that the millions of kina paid to the landowners by the National Government in royalties and dividends had been spent wisely. But much of this, the villagers believed, had allegedly been stolen.
This windfall, the landowners complained, benefited only a handful of individuals who were elected as chairmen and directors of their landowners associations.
In fact, many of them are residing and operating in Port Moresby, leaving their "wantoks" in the villages holding an empty bag.
While the culprits were enjoying city life, their people back home have to contend with the lack of basic services like education, healthcare and good roads.
The Irakorahi Investment Ltd is one of the landowner companies at the Lower Foe Pipeline within the Petroleum Development License 2, and sharing boarder with the Kikori in the Gulf province.
LFP landowners comprised 2,000 people from Kapa, Kage, Wapigese and Kandopo. These remote areas, which are 10km to 20km apart from each others, enjoy the services of a rural health centre, a community school and an airstrip.
The school and health centre were built in early 90s by Chevron Niugini, developer of the oil project, under the tax credit scheme. Now it has been taken over by Oil Search Ltd.
Helen Haru, a new graduate in community health administration, is at present running the health centre without the benefits of basic medicines and drugs. It was obvious that the health centre's presence in the area is useless since it can't help the sick.
Some years ago, the health workers abandoned the facility, taking with them whatever valuable items it had.
Now, Mrs Haru has inherited an empty building and works with a volunteer who has not been paid for the last 16 months.
According to Mrs Haru, a number of villagers had died of preventable diseases like malaria and typhoid fever. Some had died of snakebites for lack of antidotes.
Many infants had died shortly after birth because there were no medicines to treat simple illnesses that afflicted them. Vaccines were ineffective because they had not been stored properly for lack of the required cooler. A number of mothers died while giving birth because there were no medicines to save them from preventable childbirth complications.
Last Thursday, Mrs Haru begged the Health Department, National and provincial governments for medicines, equipment, new maternity and inpatient wards, an outboard motor, a cooler for vaccines and a water tank. These items are vital in the centre's operations. Their absence would make the facility inutile.
Patients had died because they could not be brought to a hospital operated by Moro Co. There was no vehicle to take them there. Or patients died while waiting for Oil Search vehicles to come to their village and take them to the hospital.
The villagers problem has been made more complicated because they are located about 55km away from the nearest hospital which is Moro's, taking at least half a day to get there.
The Kandopo community school was closed in 1997 due to mismanagement by the previous headmaster. It was reopened this year with three Grade I classes handled by only one teacher.
Although there were two teachers posted by the Education Department, the school remained teacher-less, so to speak, because the appointed teachers refused to come for the simple reason that the school was too remote for them to like and that it had no proper learning materials.
Headmaster Buamo Hasigi is currently handling the three Grade I classes. However, he might as not teach at all after he was dropped from this year's payroll..
Complaining of lack of teachers and proper learning materials, he called on Education authorities to allocate more teachers next year to handle new batches of Grade I intakes.
Mr Hasigi also wants Education Department, the National Government and Oil Search Ltd to build more buildings at the school premises to enable the school to accommodate student boarders. The school had lost some of its students who drowned while cruising the Muvi river on their way to school. The boarding school could prevent such incident from happening again, explaining that many students from remote villages in Kikori and those within the Lower Foe area travelled to school in a canoe.
Until lately, there was no transport available to bring in new school supplies, forcing the school to make do with whatever leftover its students could find.
But this has been solved at least for the time being.
Sonny Kany, chairman of the Irakorahi Investment Ltd, recently donated three brand-new vehicles - two 10-seater land cruisers and a six-tonne isuzu truck.
Mr Kany, who was elected as a chairman two years ago, had seen the need for transport in the village. Moreover, he returned to the village to stay with the people and help them with their needs.
He said the vehicles he just presented belong to the 2,000 people of the Lower Foe area.
The 10-seater land cruiser goes to the health centre, school and churches while the two other vehicles will be used by villagers to move around.
Mr Kany said whatever happened in the past should be forgotten, and urged the people to work closely with him so that goods and services could be delivered effectively.
He told the people that whatever money given to them by the National Government would be used to improve their living conditions and to upgrade the delivery of basic services in the village.
Before the end of the year, the Lower Foe would receive EMTV signals and would be linked to a satellite phone facility.
Mr Kany said later he would be looking at improving the Kandopo airstrip and putting up some basic infrastructure.
He said that for so long his people have suffered economically despite the presence of oil in their land.
They realised that such wealth is not at all a guarantee to make their life a little comfortable because of some corrupt individuals who have access to the royalties they are supposed to benefit from.
Mr Kany said OSL and National Government have been playing their part religiously but it's just that their own people had stolen the money.

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Anonymous
Anonymous

October 30th, 2006, 11:08 pm #5

We need a change in government...a dramatic shift in policy...and a very proactive png people who can invest in the oil and gas business to really benefit.
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Anonymous
Anonymous

November 2nd, 2006, 11:03 pm #6

Thank you. PNG now more than ever needs a new breed of leaders who can dramatically change the way PNGs oil and gas 'business' has been administered over the years! PNG should look at ways of retaining a major proportion of the anticipated total revenue that flows out from our oil & gas export. Its simple maths! but the political will has to be present to make those difficult policy decisions at the government level. Now is the time for change! 2007 is the time to make that very fundamental change.






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ManMountain
ManMountain

November 3rd, 2006, 11:43 pm #7

Just a few heads up.

The Elk 1 well has proven that:

1. oil and gas can be found and produced from limestone Vs sandstones like Kutubu-Gobe-Moran-Hides etc.
2. oil and gas can be found at shallow depths, Elk 1600m Vs 2000-3000m at Kutubu-Gobe-Moran-Hides etc.
3. oil and gas can be at very high pressures like Elk 1 3200psi Vs 1000-2000psi at Kutubu-Gobe-Moran-Hides etc.
4. oil and gas can be produced at higher production rates like Elk 21,000 mmcfd Vs Kutubu-Gobe-Moran-Hides etc.
5. Thickness of reservoir is 600m at Elk 1 but 35-90-120m in Kutubu-Gobe-Moran-Hides etc

So in other words Elk is a better find than all of above....more will unfold with drilling of appraisal Elk 2.

Basically InterOil have proven Oil Search and Others WRONG.
Now InterOil can really challenge Oil Search and others in PNG for the Oil and Gas business.


ManMountain
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Anonymous
Anonymous

November 4th, 2006, 8:36 am #8

Would be nice if PNGeans could do all that for themselves and keep profits within the country.
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Anonymous
Anonymous

November 5th, 2006, 1:21 pm #9

If InterOil has invested so much already even it is a new player to Oil & Gas exploration in PNG, why don't we just work with them?

What you suggested for nationals to explore Oil & Gas, let me tell you that attempts had been made in the past for us nationals to venture into such industry, but D.P.E. (or PNG govt) saw it fit not to give her nationals the license to explore, despite us having the brains and experience in such work.

If I can compare, Oilsearch is a company that boast to be here since 1900s but there is no real discoveries under its belt and even more annoying, it is only riding on Chevron's assets and ideas. There is no reason why we should be proud of OSL as compared to InterOil.

Let's go InterOil, test ELK and show the rest of the world that we have Oil & Gas reservoirs like Middle East here in PNG's foreland, an area all major players in petroleum exploration has written off long time ago.

Test ELK and show the world!!!! the mammoth it has under.





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SuperMech99
SuperMech99

November 20th, 2006, 1:27 pm #10

Hey guys, all these finds are coming to surface now but to me I have always questioned why InterOil would have invested in PNG in the first place and built a refinery and so forth when PNG wasn't ranked anyway near for investment because the stakes were too high.

Seeing all these come to light I know, InterOil aleady knew what was in stock.

I won't be surprised if they make some other bigger discoveries in a couple of months or years time.

Good luck!
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