US oil giant ExxonMobil has had its offer to buy InterOil for more than $2.5 billion in stock accepted over a rival bid for $2.2 million from Australia’s Oil Search and Total.
Once the deal is concluded it 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. InterOil owns a 36.5 per cent stake in the Elk-Antelope gas field, which is operated by Total.
“This agreement will enable ExxonMobil to create value for the shareholders of both companies. InterOil’s resources will enhance ExxonMobil’s already successful business in Papua New Guinea and bolster the company’s strong position in liquefied natural gas,” said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation.
Exxon said it would pay InterOil shareholders $45 per share in stock and that it would also make an additional cash payment based on the size of the Elk-Antelope field.
InterOil Chairman Chris Finlayson said, “Our board of directors thoroughly reviewed the ExxonMobil transaction and concluded that it delivers superior value to InterOil shareholders. They will also benefit from their interest in ExxonMobil’s diverse asset base and dividend stream.”
The PNG LNG project, the first of its kind in the country, was developed by ExxonMobil in challenging conditions on budget and ahead of schedule and is now exceeding production design capacity. Exxon said it would evaluate processing of gas from the Elk-Antelope field by expanding its LNG export plant in Papua New Guinea. Oil Search also owns a stake in the LNG plant.