• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days Does Toyota Know Something That We Don’t?
  • 6 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 days America should go after China but it should be done in a wise way.
  • 8 days China is using Chinese Names of Cities on their Border with Russia.
  • 9 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 9 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 9 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 8 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 9 days Putin and Xi Bet on the Global South
  • 9 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 10 days United States LNG Exports Reach Third Place
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Exxon Sweetens Offer For InterOil, Deal To Close In Q1 2017

Exxon has increased the additional cash payment offered to InterOil shareholders as part of a US$2.5-billion all-stock takeover proposal that was first announced in July. As a result, the deal should close by March 31, 2017, which has been set as an outside date for the acquisition, according to InterOil.

Initially, Exxon had offered InterOil a total of US$71.87 per share in stock and cash. This has now been raised to US$78.94 per share, after a ruling by the Canadian Federal Court of Appeals.

InterOil holds the rights to the Elk-Antelope gas field in Papua New Guinea, one of the largest undeveloped gas fields in Asia. The company’s best estimates for the field’s reserves are 7.8 trillion cu ft.

Exxon was not the only suitor for InterOil: it competed with Papua-based Oil Search, which offered less for the business. Although InterOil’s shareholders were in favor of the Exxon takeover, ex-CEO Phil Mulacek opposed it and took Exxon to court in Canada over it, claiming the offer undervalued the business.

The Federal Court of Appeal ruled in favor of the chief executive and his argument that the Elk-Antelope formation could hold as much as 2 billion barrels of oil equivalent, an amount equal to 10 percent of Exxon’s current reserves.

Related: The Pain Is Almost Over For Oil And Gas Drillers

As a result, Exxon was forced to raise the upper limit of its offer, which is based on resource estimates. The original amount was a flat US$45 in cash per InterOil share, plus an additional US$7.07 for every trillion cubic ft of natural gas discovered at Elk-Antelope above a minimum level of 6.2 tcf. The upper limit was 10 tcf, which has now been raised to 11 tcf, hence the updated total of US$7.94 in cash and stock.

In exchange, the termination fee for InterOil has been increased to US$100 million, from US$67 million.

By Irina Slav for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News