- ExxonMobil to pay $45 per share plus
additional cash payment based on Elk-Antelope resource size
- Boards of directors of both companies
unanimously approve terms of agreement
- Acquisition adds to ExxonMobil
resources in successful Papua New Guinea business
- Oil Search transaction terminated
Exxon Mobil Corporation (NYSE: XOM) and InterOil Corporation
(NYSE: IOC, POMSoX: IOC) today announced an agreed transaction
worth more than $2.5 billion, under which ExxonMobil will acquire
all of the outstanding shares of InterOil (the ExxonMobil
Transaction).
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View the full release here:
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“This agreement will enable ExxonMobil to create value for the
shareholders of both companies and the people of Papua New Guinea,”
said Rex W. Tillerson, chairman and chief executive officer of
Exxon Mobil Corporation.
“InterOil’s resources will enhance ExxonMobil’s already
successful business in Papua New Guinea and bolster the company’s
strong position in liquefied natural gas.”
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.”
Under the terms of the agreement with ExxonMobil, InterOil
shareholders will receive:
- A payment of $45.00 per share of
InterOil, paid in ExxonMobil shares, at closing. The number of
ExxonMobil shares paid per share of InterOil will be calculated
based on the volume weighted average price (VWAP) of ExxonMobil
shares over a measuring period of 10 days ending shortly before the
closing date (Share Consideration).
- A Contingent Resource Payment (CRP),
which will be an additional cash payment of $7.07 per share for
each trillion cubic feet equivalent (tcfe) gross resource
certification of the Elk-Antelope field above 6.2 tcfe, up to a
maximum of 10 tcfe. The CRP will be paid on the completion of the
interim certification process in accordance with the Share Purchase
Agreement with Total SA, which will include the Antelope-7
appraisal well, scheduled to be drilled later in 2016. The CRP will
not be transferrable and will not be listed on any exchange.
Together the Share Consideration and the CRP represent a
material premium to the closing price of InterOil shares on May 19,
2016 -- the day prior to the announcement of the Oil Search
transaction -- based on a range of Elk-Antelope resource
estimates:
Tcfe 6.2 7.0 8.0 9.0
10.0 (Base Volume)
(Cap) Share Consideration Value $ 45.00
$ 45.00 $ 45.00 $ 45.00
$ 45.00 CRP – Potential Value1 $ 0.00
$ 5.66 $ 12.73 $ 19.80
$ 26.87
Aggregate
Consideration(US$/share)
$ 45.00 $ 50.66
$ 57.73 $ 64.80
$ 71.87 Premium to May 19 close2 42.2 %
60.1 % 82.4 % 104.7 %
127.1 % Premium to 1-month VWAP3 41.2 %
58.9 % 81.1 % 103.2 %
125.4 % Premium to 3-month VWAP4 48.2 %
66.8 % 90.1 % 113.4 %
136.6 %
1
Represents potential future payment at
given certified resource level; not discounted to present
value.
2
Based on InterOil’s closing price of
US$31.65 per share as of May 19, 2016, prior to announcement of the
Oil Search transaction.
3
Based on InterOil’s 1-month VWAP up to and
including May 19, 2016 of US$31.88 per share.
4
Based on InterOil’s 3-month VWAP up to and
including May 19, 2016 of US$30.37 per share.
Compelling Benefits of the Transaction
When concluded, this transaction will give ExxonMobil access to
InterOil’s resource base, which includes interests in six licenses
in Papua New Guinea covering about four million acres, including
PRL 15. The Elk-Antelope field in PRL 15 is the anchor field for
the proposed Papua LNG project.
ExxonMobil’s more than 40 years of experience in the global LNG
business enables it to efficiently link complex elements such as
resource development, pipelines, liquefaction plants, shipping and
regasification terminals, which it has demonstrated through the PNG
LNG project, working closely with co-venturers, national,
provincial and local governments, and local communities. ExxonMobil
will bring to bear its industry-leading performance and strong
commitment to excellence as it grows its business in Papua New
Guinea.
The PNG LNG project, the first of its kind in the country, was
developed by ExxonMobil in challenging conditions on budget and
ahead of schedule and is now exceeding production design capacity,
demonstrating the company’s leadership in project management and
operations.
ExxonMobil will work with co-venturers and the government to
evaluate processing of gas from the Elk-Antelope field by expanding
the PNG LNG project. This would take advantage of synergies offered
by expansion of an existing project to realize time and cost
reductions that would benefit the PNG Treasury, the government’s
holding in Oil Search, other shareholders and landowners.
Path to Completion
The ExxonMobil Transaction has been unanimously approved by the
boards of both companies. The InterOil board unanimously recommends
that InterOil shareholders approve the ExxonMobil Transaction.
The ExxonMobil Transaction will be implemented by way of a
court-approved plan of arrangement under the Business Corporations
Act (Yukon) and will require the approval of at least 66 2/3
percent of the votes cast by InterOil shareholders at a special
meeting expected to take place in September, 2016.
In addition to InterOil shareholder and court approvals, the
ExxonMobil Transaction is also subject to other customary
conditions. Subject to obtaining the aforementioned approvals and
satisfaction of closing conditions, the ExxonMobil Transaction is
expected to close in September, 2016.
Further information regarding the transaction with ExxonMobil
will be included in an information circular, which will be mailed
to InterOil shareholders in due course. Copies of the key
transaction documents for the ExxonMobil Transaction (being the
arrangement agreement and the information circular) will be
available online under InterOil’s corporate profile at
www.sedar.com.
Oil Search Transaction
The InterOil board of directors, in consultation with its
independent legal and financial advisors, determined that the
ExxonMobil Transaction is superior to the previously announced
transaction with Oil Search Limited (ASX:OSH, POMSoX: OSH) and so
advised Oil Search on July 18, 2016. Immediately prior to entering
into the arrangement agreement with ExxonMobil, InterOil terminated
its previously announced arrangement agreement with Oil Search, and
ExxonMobil is paying Oil Search the termination fee in accordance
with the requirements of the Oil Search arrangement agreement on
behalf of InterOil. The previously scheduled Special Meeting of
Shareholders to vote for the approval of the Oil Search transaction
has been cancelled.
Advisers
Davis Polk & Wardwell LLP and Blake, Cassels & Graydon
LLP served as legal advisers to ExxonMobil in relation to the
ExxonMobil Transaction.
Credit Suisse (Australia) Limited, Morgan Stanley & Co. LLC
and UBS served as financial advisers to InterOil in relation to the
ExxonMobil Transaction, and Wachtell, Lipton, Rosen & Katz and
Goodmans served as its legal advisers. Morgan Stanley & Co. LLC
provided the InterOil board with a Fairness Opinion.
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and
gas company, uses technology and innovation to help meet the
world’s growing energy needs. ExxonMobil holds an industry-leading
inventory of resources and is one of the world’s largest integrated
refiners, marketers of petroleum products and chemical
manufacturers. For more information, visit www.exxonmobil.com or
follow us on Twitter www.twitter.com/exxonmobil.
About InterOil
InterOil Corporation is an independent oil and gas business with
a sole focus on Papua New Guinea. InterOil’s assets include one of
Asia’s largest undeveloped gas fields, Elk-Antelope, in the Gulf
Province, and exploration licenses covering about 16,000 square
kilometers. Its main offices are in Singapore and Port Moresby.
InterOil is listed on the New York and Port Moresby stock
exchanges.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this release relating to future plans,
projections, events or conditions are forward-looking statements.
Actual results could differ materially as a result of a variety of
risks and uncertainties, including: the timing to consummate the
proposed acquisition; the risk that a condition to closing of the
proposed acquisition may not be satisfied; the risk that a
regulatory or other required approval for the proposed acquisition
is not obtained or is obtained subject to conditions that are not
anticipated; and the outcome of the resource certification process
for the Elk-Antelope field as applicable to the Contingent Resource
Payment. Other factors that could materially affect ExxonMobil’s
future project plans, timing and results relating to the
acquisition include: changes in long-term oil or gas prices or
other market or economic conditions affecting the oil and gas
industry; completion of development projects as planned; unforeseen
technical difficulties; political events or disturbances; reservoir
performance; the outcome of commercial negotiations; wars and acts
of terrorism or sabotage; changes in technical or operating
conditions; and other factors discussed under the heading “Factors
Affecting Future Results” available through the "Investors" section
on ExxonMobil’s website and in Item 1A of ExxonMobil's 2015 Form
10-K. No assurances can be given that any of the events anticipated
by the forward-looking statements will occur, or if any of them do
what impact they will have on the future results of operations or
financial condition of ExxonMobil. Neither ExxonMobil nor InterOil
assumes any duty to update these statements as of any future date.
References to gas resources in this release may include amounts
that ExxonMobil or InterOil believe will ultimately be produced but
that are not yet classified as “proved reserves” under U.S. SEC
definitions.
Legal Notice
None of the securities anticipated to be issued pursuant to the
arrangement agreement for the ExxonMobil Transaction have been or
will be registered under the United States Securities Act of 1933,
as amended (U.S. Securities Act), or any state securities laws, and
any securities issued in the acquisition are anticipated to be
issued in reliance upon available exemptions from such registration
requirements pursuant to Section 3(a)(10) of the U.S. Securities
Act and applicable exemptions under state securities laws. This
press release does not constitute an offer to sell or the
solicitation or an offer to buy any securities.
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version on businesswire.com: http://www.businesswire.com/news/home/20160721006048/en/
For InterOil:Investor
ContactsSingaporeDavid Wu, +65 6507 0222Senior Vice
PresidentInvestor Relationsdavid.wu@interoil.comorUnited
StatesCynthia Black, +1-212-653-9778Investor RelationsNorth
Americacynthia.black@interoil.comorMedia
ContactsSingaporeAnn Lee, +65 6507 0222Communications
Specialistann.lee@interoil.comorUnited StatesJames Golden /
Aaron Palash, +1-212-355-4449Joele Frank, Wilkinson Brimmer
Katcherioc-jf@joelefrank.comorFor ExxonMobil:ExxonMobilMedia
Relations, +1-972-444-1107media@exxonmobil.com
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