Exxon's South Pacific Gas Grab Derided By InterOil's Founder
(Bloomberg) -- InterOil Corp.’s founder and third-largest investor said Exxon Mobil Corp.’s $3.6 billion offer for the South Pacific natural gas driller is “vastly inadequate” and he urged Exxon to sweeten the offer.
Phil Mulacek, who led InterOil from its 1990s inception until he stepped down in 2013, said the bonus Exxon plans to pay out based on how much gas the Elk-Antelope discovery holds will force InterOil shareholders to “forego billions of dollars of value,” according to a statement he released on Monday. Alan Jeffers, an Exxon spokesman, declined to comment on Mulacek’s remarks.
“Exxon Mobil has submitted an offer to acquire InterOil Corp., which we believe represents a superior proposal,” Jeffers said by e-mail.
Mulacek, who held a 5.35 percent stake in the Papua New Guinea-focused explorer as of his most recent securities filing, wants Exxon to modify the way it will calculate the bonus payouts, known as contingent resource payments, or CRPs, according to the statement. Mulacek plans to conduct a conference call on Tuesday to lay out his proposal.
Exxon struck a deal last week to pay as much as $3.6 billion in stock and cash for InterOil in what will be the oil major’s biggest acquisition since a 2009-2013 shale buying spree. Exxon plans to process InterOil’s gas through its $19 billion liquefied natural gas complex on the Papuan coast for export to Asia and other markets.
Related: Exxon to Buy Gas Explorer InterOil for Up to $3.6 Billion
Exxon’s purchase price will range from $45 to $71.87 per InterOil share, depending on how rich the Elk-Antelope field is in gas. Exxon’s base price is $45 of its own stock for each InterOil share. Additionally, for every trillion cubic feet of gas reserves above 6.2 tcf that Elk-Antelope holds, Exxon will pay CRPs as high as $26.87 a share.
InterOil shares rose 1 percent to $49.66 in New York Monday.
To contact the reporter on this story: Joe Carroll in Chicago at email@example.com To contact the editors responsible for this story: David Marino at firstname.lastname@example.org ;Lynn Doan at email@example.com Carlos Caminada, Steven Frank
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.
- Offshore Australia Project Marks Step-Change (Jan 16)
- Venezuela Will Remap its Caribbean Oil, Gas Prospects (Jan 09)
- Offshore Guyana Wildcat Spuds (Jan 07)
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)