ExxonMobil and Papua New Guinea’s InterOil have agreed a deal worth more than $US2.5 billion which will see the US supermajor takeover the smaller producer.
The deal will see InterOil shareholders receive $US45 per share (to be paid in ExxonMobil shares) and a Contingent Resource Payment of $US7.07 per share of each Tcfe gross resource certification of the Elk-Antelope field above 6.2 Tcfe, up to a maximum of 10 Tcfe.
“This agreement will enable ExxonMobil to create value for the shareholders of both companies and the people of Papua New Guinea,” said ExxonMobil Chairman and Chief Executive Rex W. Tillerson.
“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.”
Meanwhile, InterOil Chairman Chris Finlayson is confident that the company is receiving the best deal possible.
“Our board of directors thoroughly reviewed the ExxonMobil transaction and concluded that it delivers superior value to InterOil shareholders,” said Mr Finlayson.
“They will also benefit from their interest in ExxonMobil’s diverse asset base and dividend stream.”
The InterOil board unanimously recommends that its shareholders approve the deal.
The deal will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Yukon) and will require the approval of at least 66 per cent of the votes cast by InterOil shareholders at a meeting in September 2016.
The deal will most likely result in cooperation/integration of the PNG LNG Project and the Papua LNG Project.
The Papua LNG project is a proposed multi-train LNG development, which will source gas from the Elk-Antelope fields in PRL 15.
Joint venture interests in PRL 15 are Total (operator, 40.1 per cent), InterOil (36.5 per cent), Oil Search (22.8 per cent) and minorities (0.5 per cent).
The PNG LNG Project involves a two-train, 6.6 MMt/a LNG processing facility, envisaging the integrated development of the Hides, Angore and Juha gas fields, as well as associated gas from the Kutubu, Agogo, Gobe and Moran oil fields.
Joint venture participants include ExxonMobil subsidiary Esso Highlands as operator (33.2 per cent), Oil Search (29.0 per cent), PNG Government (16.6 per cent), Santos (13.5 per cent), Nippon Oil (4.7 per cent), Mineral Resources Development Company (2.8 per cent) and Petromin PNG Holdings Limited (0.2 per cent).