ExxonMobil has agreed to buy InterOil, a US company developing a large onshore natural gas project in Papua New Guinea, in a deal valued at up to $3.6bn.
Exxon said it would pay InterOil shareholders $45 per share in stock and help strengthen the company’s position in liquefied natural gas.
However, the company added that it would offer a contingent resource payment depending on the size of the Elk-Antelope field that could see InterOil receive pay of as much as $71.87 per share. That would bring the deal value to $3.6bn, according to Financial Times’ calculations.
The news comes after Oil Search said it would not submit a revised offer for InterOil. Oil Search had first made a $2.2bn bid for InterOil, its partner in the Elk-Antelope project in Papua New Guinea, in May.
InterOil chairman Chris Finlayson said:
"Our board of directors thoroughly reviewed the ExxonMobil transaction and concluded that it delivers superior value to InterOil shareholders. They will also benefit from their interest in ExxonMobil’s diverse asset base and dividend stream".
Exxon shares were 0.3 per cent lower at $93.62, while InterOil shares were up 0.4 per cent to $49.06 on Thursday.
*Note: This article has been amended since original publication to clarify that the deal value could reach up to $3.6bn.
(Published by Financial Times - July 22, 2016)