Attached is a press summary of IOC's press release (24 May,...

Attached is a press summary of IOC's press release (24 May, 2013) and 2 selected comments (from shareholdersunite). It appears that EWC may still be in the running for a LNG plant (Gulf project), even though it may need to wait for the development of the triceratops gas field.

Press Release summary:
• InterOil Corporation (IOC or “the Company”) announced that it has entered exclusive negotiations with ExxonMobil (NYSE:XOM) on development of the Elk/Antelope resource.
• Exxon will fund additional delineation wells in the Elk/Antelope fields, which will be followed by recertification of resource.
• IOC and its long time partner Pacific LNG will have the option to either independently develop a second LNG project in the Gulf Province that may also use gas from PRL 15 and potentially other discoveries (i.e. Triceratops, Wahoo/Mako, Tuna) or pursue further development with ExxonMobil.
• Deal has limited economic details as the parties are still in the negotiations.
• Transaction discussed with PNG Government and will be subject to its final approval.


Comment 1:
Yes I agree, XOM does not need another plant. XOM now has what they want and that is additional trains. I think they will be happy to max out their sub sea pipeline and then seek future feed for trains from PRL 236. XOM/IOC/PACLNG/Gov't and new SD partner will own pro rata, the PRL, the CSP and pipelines to Gulf and XOM will own gas beyond the shore. Seems like a perfect time to have an EWC situation comitted to Gulf LNG and work on a royalty as XOM and partners will have dry gas feed to the proposed site. Only need a production facility and jetty and boats are loaded.

Comment 2:
PRL 15 has 8 + Ts and if XOM buys 4 Ts PRL 15 is left with a bit over 4 Ts. Delineation wells and Tri will be needed for a FID on Gulf LNG.
Why do you believe Exxon doesn't need or want another plant? I do not agree...they would if 'further delineation drilling' wasn't required.

Several ways to look at this deal.

1. Only enough gas exists for a single train. I believe that (irrespective of certified estimates) had they stated more wells are needed as producers to feed LNG instead of more wells will be funded by XOM to "delineate" the field that would have been not brought the resource estimates into question.

2. Train 2 if decided to be Gulf LNG will be more expensive than another Train with XOM....with XOM as an equity owner of PRL 15, there isn't a size able equity left to sell down to another "operator".

3. This deal potentially marginalizes the rest of the gas....lets say XOM estimated 6 TCF total (although we have no idea what they would have come up with....but rest assured they did their own resource estimate)....1 train will take 4 TCF....the other 2 becomes stranded unless more discoveries are made or more drilling at elk/antelope proves up more volume.

4. Upside is there is plenty of gas for 2 trains and IOC wants to only sell 1 train of gas to XOM to enable IOC to become cash rich and to have more control over future development options: having flexibility to develop gulf LNG as they see fit especially if triceratops is as large as we think.

5. If XOM becomes interest owner in PRL 15 as this deal suggests... IOC would retain operatorship??...what's really left to sell down to another operator? I think this deal puts the sell down process on hold pending the XOM deal and further drilling of Elk/Antelope.

6. Is IOC still seen as inadequate to operate?


7. If the worst case scenario: triceratops doesn't pan out and further E/A drilling isn't sufficient for another Train,,,then value of IOC will be the value of this first and potentially only deal with XOM...or $1.50/mcf for 4 TCF? $6B. Hope this is close to being done...

8. Best case is Triceratops is. 8 more T's and E/A has 6 or 8 more and Gulf LNG is a reality.

9. Oil search value is 10B...but I do not know the details. (I.e what portion of this value relates to PNG reserves). But simply put if we only have same 1P as OSH (which is half of IOC)... Then current market cap is a steal....but I have absolutely no way to value IOC until this deal is formalized.

Lots of questions.....I underestimated the complexity of today's news release and feel that the market hammered the stock because of some of what I raised above.

Comments/other thoughts appreciated.