Exxon Deal with InterOil Completed

InterOil February 22 announced completion of its previously announced transaction with ExxonMobil Corporation, after Supreme Court of Yukon has granted a final order approving the deal-- which will provide new gas fields in Papua New Guinea to Exxon which operates an LNG export venture there.

Under the terms of the transaction, ExxonMobil acquired all of the outstanding common shares of InterOil, and InterOil shareholders received 0.5459 shares of ExxonMobil for each InterOil common share and a contingent resource payment.  With the completion of the transaction, the common shares of InterOil will be de-listed from the New York Stock Exchange.

In May, InterOil agreed to be taken over by Oil Search for $2.2bn, with Oil Search to sell a little over 60% to Total for $1.2bn. But on July 21, ExxonMobil trumped Oil Search’s bid to acquire InterOil with a $2.5bn-$3.6bn bid, the sum payable depending on the size of the reserves. There was no counter-bid.

InterOil founder and former CEO Phil Mulacek had lodged an appeal against the deal last year. November 4, the Court of Appeal of Yukon allowed the appeal lodged by Mulacek, and overturned the Supreme Court of Yukon's approval of the pending transaction with Exxon. Mulacek, who is still a shareholder, has been arguing that InterOil shareholders have not been compensated adequately. Early October, the Supreme Court of Yukon had approved the transaction, calling it fair and reasonable. InterOil is incorporated in Yukon, Canada.

Exxon declares lower reserves, but PNG helps

Exxon meanwhile said February 22 that its proved reserves were 20bn boe at year-end 2016, inclusive of a net reduction of 3.3bn boe from 2015. It said very low 2016 prices meant that some no longer qualified as proved reserves under US Securities and Exchange Commission guidelines, it said.

Amounts excluded include its entire 3.5bn boe of bitumen at Kearl in Alberta. A further 0.8bn boe in North America did not qualify either, but that was offset by some 1bn boe gas and oil reserve additions in Papua New Guinea (where 2.3 trillion ft³ was added), US, Kazakhstan, Indonesia and Norway. The PNG addition was from largely from existing fields.

Shardul Sharma