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Exxon Mobil Corporation (XOM) - free report >>
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ExxonMobil (XOM) Bids for InterOil, Trumps Oil Search Offer
ExxonMobil Corporation (XOM - Free Report) has placed a bid for Canadian company InterOil to enhance its liquefied natural gas position in Papua New Guinea.
Per Oil Search, the U.S. supermajor’s offer of about $2.2 billion for Papua New Guinea-focused InterOil Corp. has outbid that of Oil Search, which is backed by French energy giant Total SA with an agreement to buy part of InterOil's stake in the potentially lucrative Elk-Antelope gas field. According to reports, ExxonMobil has found favor with InterOil.
ExxonMobil has offered $45 worth of its own shares for each InterOil share along with a payment of $0.90 per million cubic feet equivalent (mcfe) for resources of over 6.2 trillion cubic feet in the Elk-Antelope gas field.
Oil Search, on the other hand, has offered 8.05 of its own shares for every InterOil share, and has valued InterOil's shares at $42.66 at the end of the trading session as of July 15. Also, the company has offered $0.77 per mcfe for resources of over 6.2 tcfe at Elk-Antelope.
Oil Search, which had announced its plan to buyout InterOil in May, has until Jul 21 to submit a revised offer. The company is presently having discussions with Total about raising the bid. Per the agreement, Oil Search also intends to farm out a portion of InterOil's exploration assets and interests acquired from a petroleum retention license to Total.
EXXON MOBIL CRP Price
EXXON MOBIL CRP Price | EXXON MOBIL CRP Quote
InterOil's assets comprise a 36.5% interest in the Papua LNG Project that includes Elk-Antelope, one of Asia's largest untapped gas fields, and owns exploration licenses covering 16,000 square kilometers.
However, if InterOil’s board changes its decision and the agreement is terminated, Oil Search would be entitled to receive a break fee of $60 million. Total would receive 20% of this amount.
Currently, ExxonMobil holds a Zacks Rank #2 (Buy). Other well-ranked players from the energy sector are Sasol Ltd (SSL - Free Report) and ReneSola Ltd. (SOL - Free Report) . Both of these stocks sport a Zacks Rank #1 (Strong Buy).
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