HOUSTON, July 25, 2016 /PRNewswire/ --
- InterOil shareholders will forego billions of dollars of value,
including the five (5) cash payments TOTAL, S.A. has already agreed to make
under its existing 2014 agreement with InterOil, unless the current
proposal from Exxon is modified.
- Presentation offers detailed analysis of the CRP portion of the
XOM Proposal and presents constructive suggestions that would be
fair to all shareholders.
- Exxon urged to improve the fairness of the CRP for InterOil
shareholders.
- Conference call scheduled for 8:15 a.m.
EDT on Tuesday, July 26,
2016.
The founding shareholder, former chairman and Chief Executive
Officer of InterOil Corporation ("InterOil" or the
"Company") (NYSE:IOC), Mr. Phil Mulacek, announced today that he will
release a presentation to InterOil shareholders and media after the
market closes on Monday, July 25,
2016, in connection with the proposed bid by Exxon Mobil
Corporation ("XOM"
or "Exxon") to acquire all of the issued and
outstanding shares of InterOil (the "XOM Proposal").
The presentation will be available for download at
www.ConcernedInterOilShareholders.com, which is maintained by Mr.
Mulacek. Mr. Mulacek invites all interested persons to join a
moderated conference call in which he will discuss the presentation
and proposed solutions. The call will be held Tuesday, July 26, 2016, at 8:15 a.m. EDT. The toll-free number to dial
in is 1 (800) 983-0345. The Conference ID
details will be provided shortly, on our website: www.concernedInteroilshareholders.com.
In his presentation, Mr. Mulacek outlines the potentially
multi-billion shortfall for InterOil shareholders if the contingent
resource payment ("CRP") part of the XOM Proposal, as
announced on July 18, 2016, proceeds
as currently structured. "I believe the XOM CRP is vastly
inadequate for InterOil shareholders. InterOil shareholders give up
(i) all material payments InterOil was to receive from TOTAL, S.A.
("TOTAL"), under its 2014 agreement with InterOil,
(ii) the value of the remaining 36.54% interest in PRL 15 that
InterOil holds, and (iii) InterOil's exploration acreage and other
resources, in exchange for the XOM stock and a potentially
manipulative and structurally flawed CRP that fails to properly
account for the value of the five (5) agreed cash payments from
TOTAL and enormous upside potential of the Elk and Antelope
resource."
"The recent certification of the Elk and Antelope resource,
which Oil Search Limited
("OSH"), recently conducted in connection with
its purchase of a minority interest in PRL15 in 2014, shows an
average estimated 2C resource of only 6.43 tcfe. This is
materially below the 10 tcfe estimate OSH suggested during a recent
conference call on that transaction, and provides strong support
for our view that the CRP as proposed by XOM would have only a
minimal value unless modified. For example, if the Oil Search
estimate were applied to the XOM CRP, it would yield only about
US$1.62/share."
"Our main concern is that the XOM CRP is based only on a single
resource estimate performed after Antelope #7 and before any gas or
LNG is produced, which will not fully reflect the true resource
size. To correct this, the XOM CRP must provide for
recertifying the resource after production is underway and for
supplemental payments based on the recertification, in each case
back-to-back with similar recertifications and payments under the
existing TOTAL agreement with InterOil. This is reasonable
and fair to both parties," he said. "Not modifying the XOM
CRP in this matter will damage the InterOil shareholders by
hundreds of millions to over 1 billion
dollars," Mr. Mulacek continued.
Mr. Mulacek commented that the proposed modification is also
very similar to Exxon's proposal during discussions in 2013, and
would allow both InterOil and XOM shareholders to capture a fair
portion of the value of the five TOTAL cash payments while still
leaving significant upside for Exxon.
Mr. Mulacek also noted his concern about the lack of input by
InterOil shareholders in the
certification process that underlies the CRP, which will be managed
by Exxon and TOTAL. "InterOil shareholders have no effective
advocate for their position in the current XOM Proposal.
InterOil shareholders must have the opportunity to interact
directly with the certifiers to protect their interests," he
said.
"Exxon is a well-respected company, and we urge them to amend
the XOM CRP and certification review process to provide a fair
outcome for InterOil shareholders as well as Exxon."
The presentation also questions the abusive amount of stock
recently taken by IOC board and Management and the cash
compensation over the past 2 years while shareholders have lost
billions of dollars.
"According to our information, retail shareholders largely
opposed the 2016 InterOil Stock Plan while certain institutional
shareholders largely supported it, but perhaps without fully
understanding that the InterOil Board would issue all of the newly
authorized shares within 2 months. Combining these shares
with break-fees paid to OSH and excessive cash bonuses and salaries
paid to the Board and Management, you get approximately
US$4.25 per share of waste. How
can approving such outright waste be in the best interests of the
institutions or their stakeholders?"
Finally, the presentation points out some questionable trades by
members of the current Board and management of InterOil that were
made during January and February, 2016, while the previously
announced OSH/TOTAL proposal and an early offer from Exxon were
under active consideration by the InterOil Board but had not been
publicly disclosed.
Please review Mr. Mulacek's presentation, to be available at
www.ConcernedInterOilShareholders.com.
Cautionary Statement Regarding Forward-Looking
Statements:
This press release contains forward‐looking statements. All
statements contained here that are not clearly historical in nature
or that necessarily depend on future events are forward‐looking,
and the words "anticipate," "believe," "expect," "estimate,"
"plan," and similar expressions are generally intended to identify
forward‐looking statements. These statements are based on current
expectations of Mr. Mulacek and currently available information.
They are not guarantees of future performance, involve
certain risks and uncertainties that are difficult to predict, and
are based upon assumptions as to future events that may not prove
to be accurate or may be under the control of unrelated third
parties. Mr. Mulacek does not assume any obligation to update
any forward‐looking statements contained in this press release.
Information Contact:
For additional information on this press release please contact
Mr. Mulacek at +1 (832) 510-7028, or by email at
info@concernedinteroilshareholders.com.
To view the original version on PR Newswire,
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SOURCE Petroleum Independent & Exploration, LLC