ExxonMobil proposes acquirement of InterOil

US-based ExxonMobil has made a $2.2bn bid to acquire InterOil, as well as its stake in a Papua New Guinea gas field.

The company’s offer topped one from Australia's Oil Search that was announced in May this year to acquire InterOil.

Oil Search owns a stake in Papua LNG project and PNG LNG project and its bid for InterOil is aimed at tying the two LNG projects together to help cut costs.

Exxon Mobil is Oil Search’s co-venturer in the PNG LNG project and also operates it.

InterOil has determined that the ExxonMobil offer constitutes a 'Superior Proposal', as defined in the company’s agreement with Oil Search.

Under the offer made by ExxonMobil, InterOil shareholders would receive a payment of $45 per share of InterOil.

A contingent resource payment (CRP) will also be made to InterOil, which would be an additional cash payment of about $7.07 per share for each trillion cubic feet equivalents (tcfe) gross resource certification of the Elk-Antelope field above 6.2tcfe.

InterOil said that there can be no assurance that the ExxonMobil offer will lead to the termination of the Oil Search agreement and the execution of an agreement with ExxonMobil.

Oil Search noted that InterOil must provide it with a minimum of three days to submit a revised offer prior to entering into an agreement with ExxonMobil.

Furthermore, ExxonMobil’s offer endorses Oil Search’s view on the quality of the Elk-Antelope gas fields and the value of the Papua LNG project.