ExxonMobil Beats Rival Explorers For InterOil

Published at 10:31AM - 22/07/16

ExxonMobil has successfully acquired gas explorer InterOil after a US$2.5 billion (£1.88 billion) bid that was not countered by rivals Oil Search and Total.

Total and Oil Search had offered to buy InterOil in May, but the offer was topped by Exxon on July 18.

“This agreement will enable ExxonMobil to create value for the shareholders of both companies and the people of Papua New Guinea,” ExxonMobil Chairman and Chief Executive Officer Rex W. Tillerson, said.

ExxonMobil Beats Rival Explorers For InterOil

Under the agreement, Exxon will acquire all of the outstanding shares of InterOil.

The company will pay $45 (£33.9) per share, plus additional cash payment based on the size of resources at the Elk-Antelope development.

InterOil Elk Antelope Gas Field
InterOil Elk Antelope Gas Field

With this acquisition, Exxon gains access to further resources in Papua New Guinea, where it already had a significant presence.

“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,” Tillerson added.

Overall, the transaction will give Exxon access to interests in six licences in Papua New Guinea, including the Elk-Antelope field in PRL 15, which is the anchor field for the proposed Papua liquefied natural gas (LNG) project.

Oil Search Gains Synergies With Exxon Win

Oil Search has said it is still happy with the result, as Exxon’s acquisition will enable it to gain the same synergies as it would have otherwise.

“Our board of directors thoroughly reviewed the ExxonMobil transaction and concluded that it delivers superior value to InterOil shareholders. They will also benefit from their interest in ExxonMobil’s diverse asset base and dividend stream,” InterOil Chairman Chris Finlayson, said.

The Papua New Guinea LNG project (PNG LNG) is the first of the kind in the country and has been developed by Exxon on budget and ahead of schedule.

According to the supermajor, the project is now exceeding production design capacity.

Gas processing from the Elk-Antelope field will be assessed by ExxonMobil, its co-venturers and the government through the expansion of the LNG project.