Costs Incurred and Activities
The following table outlines costs incurred by InterOil during the year ended December 31, 2011 for acquisitions and capital expenditure associated with exploration and development activities:
Additionally the following table summarizes the results of exploration and development activities on a gross and net basis (with net costs reflecting the cost to us, not including the portion of costs met by IPI holders, PNGDV and/or Pac LNG), as further broken down by well type, during the year ended December 31, 2011.
During the year ended December 31, 2011, we have commenced the construction of certain infrastructure such as roads, wharves, warehouses and camps to support the proposed appraisal and development drilling in the Elk and Antelope gas fields. In addition, we also undertook exploration activities in our three exploration licenses, PPL 236, PPL 237 and PPL 238. These exploration activities involved a regional airborne geophysical survey, various seismic surveys across a number of prospects and preparation for drilling of our next appraisal well, Triceratops 2, which was spudded in mid-January 2012. No wells were drilled during the year ended December 31, 2011. The preparation of the Triceratops 2 well site was completed at the end of 2011 and the Triceratops 2 well was spudded on January 15, 2012. The Triceratops 2 well is an appraisal well to test the presence of hydrocarbons and determine whether a potential reefal carbonate reservoir exists in the Triceratops field.
Operated License Commitments, Terms, Expiry and Re-Application
In March 2009, PPLs 236, 237 and 238 were extended for 5 years, with an initial term of 2 years and a subsequent 3 year term. The PPL license renewals require that we expend the amounts set out below and drill a total of 6 wells within those license areas during the renewed license term. The first 2 year term of the license anniversaries occurred in March 2011. On May 17, 2011, the State approved our request to extend all three licenses for the second two year term (years 3 and 4). In January 2011, we applied for a variation of license conditions on PPL 238 to defer the commitment to drill a well from first 9 PPL 236 two year term to the second term which ends in March 2013. The State also approved this request on May 17, 2011. We have met all other commitments under our licenses as of December 31, 2011.
The following are our applicable expenditure commitments for each PPL and PRL based on the approved renewals in March 2009 and the PRL granted in November 2010: