InterOil to Reduce 2016 Spend to $155-170 mn

Papua New Guinea focused InterOil has announced a reduction in expected 2016 expenditure.

“Following last year’s restructuring and streamlining of the business, we have reduced guidance on our expected 2016 spend to a lower range of $155 million to $170 million, predominantly focused on the Papua LNG project. While we have $252 million in current liquidity at the end of 2015, we are in discussions with our lenders to increase and extend our credit facility. It is proposed to complete the increased and extended facility in the second quarter of 2016,” InterOil chief executive Michael Hession said Wednesday.

This year, the company plans to focus on completing the appraisal program, progressing the certification of Elk-Antelope volumes, advancing the world-class Papua LNG project from Basis of Design to FEED and monetizing independently assessed discoveries with strategic partners.

Hession said momentum was building for the multi-billion dollar Papua LNG project with Antelope-6 intersecting 42 meters (138 feet) of dolomite with connectivity to the rest of the Antelope field. In addition, the excellent reservoir qualities, identified by a short flow test last year at Antelope-5, were successfully confirmed by a longer flow-test in first quarter 2016.

“During 2015, significant milestones were achieved with the appointment of Total as operator and the selection of the Papua LNG project’s key infrastructure sites. Analysis from independent sources suggests Papua LNG will be one of the most competitive new-build LNG projects globally, with short shipping distances to Asian markets and potential for attractive returns.”

“While the analysis of the Antelope-6 well and the Antelope-5 flow test is continuing, results to date have been encouraging and we remain confident of a two-train LNG development,” Hession said.