Glossary of Terms
“2012 MD&A” means the Management’s Discussion and Analysis for the year ended December 31, 2012.
“AIF” means this Annual Information Form for the year ended December 31, 2012.
“API” means the American Petroleum Institute.
“AUD” means Australian dollars.
“Barrel, Bbl” (petroleum) Unit volume measurement used for petroleum and its products.
“BNP Paribas” means BNP Paribas Capital (Singapore) Limited.
“Board” means the board of directors of InterOil.
“BP” means BP Singapore Pte Limited.
“BSP” means Bank of South Pacific Limited.
“CDU” means crude distillation unit.
“CGR” means condensate to gas ratio.
“COGE Handbook” refers to the Canadian Oil and Gas Evaluation Handbook.
“Condensate” A component of natural gas which is a liquid at surface conditions.
“Contingent resources” are those quantities of natural gas and condensate estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. The economic status of the resources is undetermined and there is no certainty that it will be commercially viable to produce any portion of the resources.
“Convertible notes” means the 2.75% convertible senior notes of InterOil due November 15, 2015.
“Crack spread” The simultaneous purchase or sale of crude against the sale or purchase of refined petroleum products. These spread differentials which represent refining margins are normally quoted in dollars per barrel by converting the product prices into dollars per barrel and subtracting the crude price.
“CRU” means catalytic reformer unit.
“Crude Oil” A mixture consisting mainly of pentanes and heavier hydrocarbons that exists in the liquid phase in reservoirs and remains liquid at atmospheric pressure and temperature. Crude oil may contain small amounts of sulfur and other non hydrocarbons but does not include liquids obtained from the processing of natural gas.
“CSP Joint Venture” or “CSP JV” means the Joint Venture Operating Agreement (“JVOA”) entered into for the proposed condensate stripping facilities with Mitsui or the joint venture formed to develop and operate the proposed condensate stripping facilities as the context requires.
“Condensate Stripping Project” means the proposed condensate stripping facilities, including gathering and condensate pipeline, condensate storage and associated facilities being progressed in joint venture with Mitsui.
“DST” refers to a drill stem test and is a procedure for isolating and testing the surrounding geological formation through the drill pipe.
“EBITDA” EBITDA represents net income/(loss) plus total interest expense (excluding amortization of debt issuance costs), income tax expense, depreciation and amortization expense. EBITDA is a non-GAAP measure used to analyze operating performance. See “Non-GAAP Measures and Reconciliation”.
“EPC Contractor” means an engineering, procurement and construction contractor.
“EWC” means Energy World Corporation Limited., a company organized under the laws of Australia.
“Farm out” A contractual agreement with an owner who holds a working interest in an oil and gas lease to assign all or part of that interest to another party in exchange for the other party’s fulfillment of contractually specified conditions. Farm out agreements often stipulate that a party must drill a well to a certain depth, at a specified location, within a certain time frame; furthermore, typically, the well must be completed as a commercial producer to earn an assignment of the working interest. The assignor of the interest usually reserves a specified overriding royalty interest, with the option to convert the overriding royalty interest to a specified working interest upon payout of drilling and production expenses.
“FEED” means front end engineering and design.
“Feedstock” means raw material used in a refinery or other processing plant.
“FID” means final investment decision. Such a decision is ordinarily the point at which a decision is made to proceed with a project and it becomes unconditional. However, in some instances the decision may be qualified by certain conditions, including being subject to necessary approvals by the State.
“FLEX LNG” means FLEX LNG Limited, a British Virgin Islands Company listed on the Oslo Stock Exchange.
“GAAP” means Canadian generally accepted accounting principles.
“Gas” means a mixture of lighter hydrocarbons that exist either in the gaseous phase or in solution in crude oil in reservoirs but are gaseous at atmospheric conditions. Natural gas may contain sulfur or other non-hydrocarbon compounds.
“GLJ” means GLJ Petroleum Consultants Limited, an independent qualified reserves evaluator.
“GLJ 2012 Report” means the report dated February 27, 2013 with an effective date of December 31, 2012 setting forth certain information regarding contingent resources of our interests in the Elk and Antelope fields in PNG.
“Gross wells” refers to the total number of wells in which we have an interest.
“HOA” means Heads of Agreement.
“ICCC” means Papua New Guinea’s competition authority, the Independent Consumer and Competition Commission.
“IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board.
“IPF” refers to InterOil power fuel, InterOil’s marketing name for low sulfur waxy residue or LSWR.
“IPI Agreement” means the Amended and Restated Indirect Participation Agreement dated February 25, 2005, as amended.
“IPI holders” means investors holding IPWIs in certain exploration wells required to be drilled pursuant to the IPI Agreement.
“IPP” means import parity price. For each refined product produced and sold locally in Papua New Guinea, IPP is calculated under agreement with the State by adding the costs that would typically be incurred to import such product to an average posted price for such product in Singapore as reported by Platts. The costs added to the reported Platts price include freight costs, insurance costs, landing charges, losses incurred in the transportation of refined products, demurrage and taxes.
“IPWI” means indirect participation working interest.
“JVOA” means joint venture operating agreement.
“LIBOR” means daily reference rate based on the interest rates at which banks borrow unsecured funds from banks in the London wholesale money market.
“LNG” means liquefied natural gas. Natural gas may be converted to a liquid state by pressure and severe cooling for transportation purposes, and then returned to a gaseous state to be used as fuel. LNG, which is predominantly artificially liquefied methane, is not to be confused with NGLs, natural gas liquids, which are heavier fractions that occur naturally as liquids.
“LNGL” means Liquid Niugini Gas Limited, a wholly owned subsidiary of PNG LNG formed in Papua New Guinea to contract with the State and pursue the LNG Project, including construction of the proposed liquefaction facilities.
“LNG Project” means the development by us of liquefaction facilities in the Gulf Province of Papua New Guinea described as our Midstream Liquefaction business segment and being undertaken as a joint venture with Pac LNG and with other potential partners, including the State.
“LNG Project Agreement” means the LNG Project Agreement between the State and LNGL dated December 23, 2009.
“LPG” means liquefied petroleum gas, typically ethane, propane, butane and isobutane. Usually produced at refineries or natural gas processing plants, including plants that fractionate raw natural gas plant liquids. LPG can also occur naturally as a condensate.
“LSWR” means low sulfur waxy residue.
“Mark-to-market” refers to the accounting standards of assigning a value to a position held in a financial instrument based on the current fair market price for the instrument or similar instruments.
“Mitsui” refers to Mitsui & Co., Ltd., a company organized under the laws of Japan and/or certain of its wholly-owned subsidiaries (as the context requires).
“Mmbtu” means one million British thermal units. One cubic foot of natural gas produces approximately 1,000 btus, so 1,000 cu.ft. of gas is comparable to 1 mmbtu.
“Mmscfpd” means million standard cubic feet of gas per day.
“MOPS” means Mean of Platts Singapore.
“Mtpa” means million tonnes per annum.
“Naphtha” That portion of the distillate obtained from the refinement of petroleum which is an intermediate between the lighter gasoline and the heavier benzene. It is a feedstock destined either for the petrochemical industry or for gasoline production by reforming or isomerisation within a refinery.
“Natural gas” means a naturally occurring mixture of hydrocarbon and non-hydrocarbon gases found in porous geological formations beneath the earth’s surface, often in association with petroleum. The principal constituent is methane.
“NEC” means National Executive Council of Papua New Guinea.
“NGL” means natural gas liquids, consisting of any one or more of propane, butane and condensate.
“Net wells” refers to the aggregate of the numbers obtained by multiplying each gross well by our percentage working interest in that well.
“NI 51-101” refers to National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities adopted by the Canadian Securities Administrators.
“NI 52-110” refers to National Instrument 52-110 – Audit Committees adopted by the Canadian Securities Administrators.
“NRV” means net realizable value.
“OPIC” means Overseas Private Investment Corporation, an agency of the United States Government.
“Pac LNG” means Pacific LNG Operations Ltd., a company incorporated in the Bahamas and affiliated with Clarion Finanz A.G. This company is our joint venture partner in the LNG Project (holding equal voting shares in PNG LNG), holds a 2.5% direct interest in the Elk and Antelope fields, is an IPI holder and a shareholder in PNGDV.
“PDL” means Petroleum Development License. The right granted by the State to develop a field for commercial production.
“Petromin” means Petromin PNG Holdings Limited, a company incorporated in Papua New Guinea by the State.
“PGK” means the Kina, currency of Papua New Guinea.
“PNGDV” means PNG Drilling Ventures Limited, an entity with which we entered into an IPI Agreement.
“PNGEI” means PNG Energy Investors LLC, an entity with which we entered into an IPI Agreement on May 12, 2004.
“PNG LNG” means PNG LNG, Inc., a joint venture company established in 2007 to hold the interests of certain joint venturers in the venture to construct the proposed liquefaction facilities. Shareholders are InterOil LNG Holdings Inc., a wholly-owned subsidiary of InterOil, and Pac LNG.
“PPL” means Petroleum Prospecting License. The tenement given by the State to explore for oil and gas.
“PRE” means Pacific Rubiales Energy Corp., a company incorporated in British Columbia, Canada.
“PRE JVOA” means the Joint Operating Agreement entered into with PRE for PPL 237 based on the provisions defined in the HOA and the Farm-In Agreement with PRE.
“PRL” means Petroleum Retention License. The tenement given by the State to allow the license holder to evaluate the commercial and technical options for the potential development of an oil and/or gas field.
“Prospective Resources” are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub classified based on project maturity.
“SEC” means the United States Securities and Exchange Commission.
“Shell” means Royal Dutch Shell plc, or a subsidiary or affiliate of that company.
“Shut-in” refers to wells that are capable of producing oil or natural gas which are not producing due to lack of available transportation facilities, available markets or other reasons.
“State” or “PNG” means the Independent State of Papua New Guinea.
“SWC” means rotary side wall cores.
“Sweet/sour crude” Sweetness describes the degree of a given crude’s sulfur content. Sour crudes are high in sulfur, sweet crudes are low.
“USD” means United States Dollars.
“VSP” means vertical seismic profile.
“Westpac” means Westpac Bank PNG Limited.
“Working interest” means the percentage of undivided interest held by InterOil in an oil and natural gas property.
“YBCA” means the Business Corporations Act (Yukon Territory).