U.S.-based energy giant ExxonMobil on Thursday has agreed to acquire InterOil Corporation in a transaction worth more than US$2.5 billion, following the withdrawal of Total-backed Oil Search offer.
Under the terms of the agreement with ExxonMobil, InterOil shareholders will receive a payment of $45.00 per share of InterOil, paid in ExxonMobil shares, at closing and a Contingent Resource Payment (CRP), which will be an additional cash payment of $7.07 per share for each trillion cubic feet equivalent gross resource certification of the Elk-Antelope field above 6.2 tcfe, up to a maximum of 10 tcfe.
The company noted in its statement that the CRP will be paid on the completion of the interim certification process in accordance with the share purchase agreement with Total, which will include the Antelope-7 appraisal well, scheduled to be drilled later in 2016.
When concluded, the transaction 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, which includes the Elk-Antelope which is the anchor field for the proposed Papua LNG project.
ExxonMobil intends to work with its co-venturers and the government to evaluate processing of gas from Elk-Antelope field by expanding the PNG LNG project.
Speaking on the agreement, InterOil chairman Chris Finlayson said, “Our board of directors thoroughly reviewed the ExxonMobil transaction and concluded that it delivers superior value to InterOil shareholders.”
The ExxonMobil transaction has been unanimously approved by the boards of both companies, however, the transaction requires the approval of at least 66 percent of the votes cast by the InterOil shareholders at a special meeting expected to take place in September, 2016, when the transaction is expected to close.
The board of InterOil, with its advisors, determined the ExxonMobil offer to be superior to the one made by Oil Search, and prior to entering into the agreement with ExxonMobil it has terminated its arrangement with Oil Search.
ExxonMobil is paying Oil Search the termination fee in accordance with the requirements of the Oil Search agreement on behalf of InterOil.