INTEROIL says ExxonMobil Corporation’s made a better offer than Oil Search to acquire it.
InterOil yesterday announced the unsolicited proposal for its purchase, the receipt of which was publicly announced by the company on June 30, by ExxonMobil.
Under the terms of Exxon Mobil’s offer, InterOil shareholders would receive:
- A payment of US$45 (K141) per share of InterOil paid in ExxonMobil shares. The number of ExxonMobil shares paid per share of InterOil would be calculated based on volume weighted average price of ExxonMobil shares over a measuring period of 10 days ending shortly before a closing date; and
- A contingent resource payment (CRP), which would be an additional cash payment of about US$7.07 (K22) per share for each tcfe gross resource certification of the Elk-Antelope field above 6.2 tcfe up to a maximum of 10 tcfe. The CRP would be paid on completion of interim certification process in accordance with share purchase agreement with Total SA, which would include Antelope-7 appraisal well. The CRP would not be transferrable and would not be listed on any stock exchange.
Under the terms of the Oil Search agreement, Oil Search has three days, which would expire on Thursday, during which it could amend terms.
InterOil said Oil Search was under no obligation to make such an offer. The company continues to recommend Oil Search’s transaction to its shareholders.
However, Oil Search said Total SA, with which Oil Search has a memorandum of understanding with regarding InterOil assets, was aware of the developments and Oil Search’s right to submit a revised offer.
‘The parties are in active dialogue and have the flexibility to submit a revised offer either during the three-day notice period or after InterOil entered into an arrangement with ExxonMobil,” Oil Search said in a statement. Oil Search noted that its board and management were committed to acting in the best interests of shareholders and were considering their position.
“The proposal from ExxonMobil endorses Oil Search’s view on the quality of the Elk-Antelope gas fields and the value of Papua LNG project. Given its existing material interests in both the PNG LNG project and in Papua LNG project, Oil Search is well placed to participate in potentially very significant benefits that are expected to arise from cooperation between, and/or integration of, the projects.
‘In the event that the Oil Search arrangement agreement is terminated following a change in recommendation from InterOil’s board, Oil Search is entitled to be paid a US$60 million break fee (of which Total is entitled to 20 per cent), which would more than cover the costs associated with its offer.
“Oil Search will update shareholders and the market in due course. In light of the above development, the company intends to delay the release of its activities report for the second quarter of 2016 until Thursday.”