By YEHIURA HRIEHWAZI in Brisbane
INTEROIL Corp’s shares in the New York Stock Exchange jumped 7.6% last Friday after the PNG Government gave approval for the Canadian oil company’s US$6 billion (K16.1 billion) gas project in the country.
InterOil shares shot up US$4.97 (K13.43) to trade at US$70.33 (K190.08) per share.
Bloomberg reported that earlier in the day, the stock traded at US$70.99 (K191.86) for the biggest intra-day gain since Oct 27 this year.
The situation facing Oil Search Ltd is the opposite.
Despite the K42 billion PNG liquefied natural gas (LNG) project sanctioning last Tuesday, its stocks slipped the whole of last week to trade at A$5.43 (K13.43) per share on the Australian Stock Exchange.
Meanwhile, Oil Search company secretary Stephen Cardiner gave notice to ASX late last Friday that the company intended to issue a large portion of shares at a considered value of A$5.79 (K14.32).
Mr Gardiner said the proceeds of the shares issued would be used to support OSL’s equity funding for the PNG LNG project and support a range of growth initiatives and provide enhanced financial flexibility.
There was no response from messages left at OSL’s media liaison officers late last Friday regarding the share price drop and the proposed shares issue.
But other sources spoken to said OSL shares slip was due largely to the falling price of crude oil.
“The global oil demand is key … crude oil prices were sliding so the OSL share performance is expected.
“Also, the market would take notice and respond once bankers and financiers of the PNG LNG project give their firm approval for the project,” the source said.
The massive project was to be financed largely by a consortium of bankers (on a 70:30 basis), so their approval is crucial, the source said.
Meanwhile, InterOil’s vice president for capital markets Wayne Andrews told Bloomberg the company’s share prices hike was related to the PNG Government’s approval of its LNG project.
InterOil stock has more than quadrupled in price this year after chief executive officer Phil Mulacek and his PNG team of exploration staff discovered oil and gas fields in the Wabo area of Gulf province.
It plans to build a plant to liquefy gas and export it to Japan and South Korea.