Exxon tops rival’s offer for InterOil Corp

Exxon tops rival’s offer for InterOil Corp

Oil Search (ASX:OSH), Papua New Guinea’s largest oil and gas company said its US$2.2 billion bid for InterOil (NYSE:IOC) has been topped by a $2.5 billion proposal from Exxon Mobil Corp (NYSE: XOM).

Exxon already runs Papua New Guinea’s only liquefied natural gas terminal and buying InterOil would give it a new source of the fuel for its exports.

InterOil said Exxon is offering it at a fixed price of $45 per share and values the company at $25 billion, including $188 billion in net debt.

Oil Search announced in May it would buy out rival InterOil and would sell part of its exploration assets and interests acquired from a petroleum retention license to France’s Total (LSE:TTA).

InterOil’s assets include a 36.5% interest in the Papua LNG project which also includes Elk-Antelope, one of Asia’s largest untapped gas fields. It also owns the exploration licences spanning 16,000 square kilometres.

Oil Search has three days under its deal to submit a revised offer before InterOil’s deal with Exxon can go ahead.

“The proposal from Exxon Mobil endorses Oil Search’s view on the quality of the Elk-Antelope gas fields and the value of the Papua LNG Project,” said Oil Search in a statement.

“Given its existing material interests, Oil Search is well placed to participate in the potentially very significant benefits that are expected to arise from cooperation between, and/or integration of the projects.”

If the agreement is terminated, Oil Search would be entitled to a $60 million break fee and France’s Total would be entitled to 20%.