ExxonMobil to buy InterOil Corp for more than $2.5 bn, Oil Search abandons bid
22 July 2016
US energy giant ExxonMobil Corp yesterday struck a deal to buy InterOil Corp for more than $2.5 billion in stock, outbidding a competing $2.2 billion bid from Australia's Oil Search Ltd.
Under the terms of the deal, Exxon will pay $45 in newly issued stock, and the deal value could go as high as $71.87 depending on how much gas InterOil's Elk-Antelope field holds.
The potential payouts could be between $2.5 billion to $3.6 billion, which would be Exxon's biggest acquisition in nearly four years. Exxon also agreed to pay a $60 million breakup fee.
''This agreement will enable Exxon Mobil to create value for the shareholders of both companies and the people of Papua New Guinea,'' said, Rex Tillerson, Exxon Mobil's chairman and CEO.
In May, Papua New Guinea-focused oil and gas explorer Oil Search Ltd said that it would buy InterOil for at least $2.2 billion and agreed to sell off some assets to French energy giant Total SA to fund part of the proposed acquisition.
InterOil Corp, which agreed to be acquired by Oil Search, said that it has received an unsolicited takeover offer from an unnamed bidder and would enter into talks with the unnamed bidder. The company further added that Oil Search had allowed it to proceed with the negotiations. (See: InterOil Corp receives unsolicited takeover offer from an unnamed bidder) InterOil is an independent oil and gas business with a sole focus on Papua New Guinea. It owns a 36.5 per cent stake in the Elk-Antelope gas field, which is operated by Total.
The deal will give ExxonMobil access to InterOil's resource base, which includes interests in six licenses in Papua New Guinea covering about four million acres, including PRL 15. The Elk-Antelope field in PRL 15 is the anchor field for the proposed Papua LNG project.
Papua LNG is Papua New Guinea's second LNG project with expected first gas in the early 2020s. Operated by French energy giant Total SA, the project is a joint venture between InterOil, Total SA, Oil Search and the Papua New Guinea government.
Papua LNG will be supported by the Elk-Antelope gas field, located in the Eastern Papuan Basin.
ExxonMobil said that it will work with partners and the government to evaluate processing of gas from the Elk-Antelope field by expanding the PNG LNG project.