ExxonMobil Gets Approval for InterOil Takeover

Published at 09:04AM - 22/09/16

ExxonMobil’s proposal for a US$2.5 billion (£1.92 billion) takeover of InterOil announced in July has received a majority approval by InterOil shareholders and will close by the end of the month.

Under the transaction, ExxonMobil will gain access to InterOil’s coveted Elk-Antelope gas field, one of the largest undeveloped fields in Asia.

“I would like to thank our shareholder for their overwhelming support for this value-creating transaction. This transaction delivers shareholders a material and immediate premium, a potential direct cash payment based on the Elk-Antelope resource certification and exposure to future value through ownership of ExxonMobil shares,” said InterOil Chairman Chris Finlayson.

ExxonMobil Gets Approval for InterOil Takeover

ExxonMobil had announced in July that it was planning to acquire all of the outstanding shares of InterOil.

“This agreement will enable ExxonMobil to create value for the shareholders of both companies and the people of Papua New Guinea. 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,” Exxon CEO Rex W. Tillerson said, at the time.

ExxonMobil Gets Approval for InterOil Takeover
Papua New Guinea LNG Project Map

When the proposal was made, InterOil deemed it would deliver “super value to InterOil shareholders”, who would also benefit “from their interest in ExxonMobil’s diverse asset base and dividend stream,” InterOil Chairman Chris Finlayson said at the time.

ExxonMobil Reinforces LNG Asssets

Under the terms of the agreement, InterOil shareholders will receive a payment of US$45 (£34.66) per share of InterOil and a contingent resource payment of US$7.07 (£5.44) per share for each trillion cubic feet equivalent (tcfe) gross resource certification of the Elk-Antelope field above 6.2 tcfe.

When concluded, the transaction will provide Exxon with access to Interoil’s resource base, which includes interests in six licences in Papua New Guinea, namely the Elk-Antelope field, which is the anchor field for the proposed Papua Liquefied Natural Gas (LNG) project.

The project is the first of its kind in the country, it has been developed by Exxon on budget and ahead of schedule and is already exceeding production design capacity.