Sources: Exxon Tops Oil Search's Bid For InterOil
July 12 (Reuters) - Exxon Mobil Corp has tabled an offer to buy InterOil Corp topping the $2.2 billion deal from Australia's Oil Search Ltd, according to people familiar with the matter.
In May, InterOil agreed to be acquired by Oil Search but on 30 June, InterOil acknowledged it received another non-binding offer even as global markets roiled in the wake of Britain's exit from the European Union.
Exxon's interest, which has not yet been made public by either company, is comprised of Exxon stock, as well as a Contingent Value Right (CVR), a seldom used instrument, which may give InterOil shareholders cash on a sliding scale depending on the value of a pending gas deposit discovery, the people said.
This is the same structure as the Oil Search bid, though Exxon's bid is higher, the people said.
InterOil and Oil Search declined to comment. Exxon did not respond to a request for comment. The people asked not to be named because the talks were private.
InterOil, which trades on the New York Stock exchange, is an attractive takeover target for companies looking to tap the potential of Papua New Guinea's liquefied natural gas (LNG) reserves as it has a 36.5 percent stake in a project in the Elk-Antelope fields.
Papua New Guinea's Elk-Antelope fields could hold at least 6.2 trillion cubic feet of gas, more than enough to fill one LNG processing train.
France's Total SA, Oil Search and the Papua New Guinea government are partners in the project.
Exxon also has an LNG project in the country, considered a good location due to its high-quality gas and low costs.
InterOil's merger contract with Oil Search allows for negotiations with a rival bidder to proceed if certain conditions were met, the companies said in its 30 June announcement of a conditional, non-binding bid from an unnamed party.
According to a presentation filed with the U.S. Securities and Exchange Commission on Tuesday, InterOil received three proposals, including Oil Search's, to sell the entire company during its initial sale process.
InterOil has scheduled a special shareholder meeting to vote on the Oil Search deal on July 28.
Since the deal's announcement, InterOil's merger with Oil Search has hit other bumps. Interoil's founder and former chief executive Phil Mulacek attempted to oust InterOil's board in June, but major proxy advisor Institutional Shareholder Services (ISS) said Mulacek had "not made a compelling case for change."
(Reporting by Mike Stone in New York)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Operates 16 Offshore Rigs
- Exxon, Petrobras Form Alliance To Develop Oil, Gas Projects (Dec 14)
- ExxonMobil to Lead Construction, Ops of Mozambique LNG Facilities (Dec 13)
- ExxonMobil Jumping in to Mexico Fuel Market With First US Cargo (Dec 06)
Company: Oil Search Ltd. more info
- Papua New Guinea Government To Sell Stake In Oil Search (Sep 21)
- Oil Search Profit Soars, Focus On Advancing PNG Gas Projects (Aug 22)
- Oil Search Q3 Revenue Beats Forecasts (Oct 18)
Company: InterOil Corporation more info
- Exxon's South Pacific Gas Grab Derided By InterOil's Founder (Jul 26)
- Oil, Gas Companies Tighten Cash Flow at Expense of Future Growth (Jul 26)
- Oil Search Won't Counter Exxon Bid For Gas Explorer InterOil (Jul 21)