Indeed, InterOil’s Board of Directors has determined that ExxonMobil’s offer constitutes a “superior proposal”? as defined in InterOil’s arrangement agreement with Oil Search.
Under the terms of the ExxonMobil offer, InterOil shareholders would receive:
- A payment of $US45 per share of InterOil, paid in ExxonMobil shares; and,
- A Contingent Resources Payment (CRP), which would be an additional cash payment of approximately $US7.07 per share for each Tcf gross resource certification of the Elk-Antelope field above 6.2 Tcf, up to a maximum of 10 Tcf.
InterOil has advised that it intends to make a change in its recommendation and enter into an Arrangement Agreement with ExxonMobil.
However, InterOil must provide Oil Search a minimum three days (up to 21 July) to submit a revised offer before it is able to enter the Arrangement Agreement with ExxonMobil.
Total SA, with which Oil Search has a memorandum of understanding regarding the InterOil assets, is in active dialogue with Oil Search whether another bid will be put forward.
Despite potentially missing out on InterOil, Oil Search is in a strong position given its existing interests in both the PNG LNG Project and the Papua LNG Project, and could stand to make some very significant benefits from the cooperation between and/or integration of the projects.
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).