ExxonMobil to buy InterOil for about $2.5 bln

He also mentioned that the shareholders would benefit from interest in ExxonMobil’s diverse resource base and dividend stream.

Exxon said it will pay $2.5 billion for InterOil in a deal that will complement its large liquefied natural gas facility in the country. InterOil shares edged 0.3% lower.

InterOil’s Elk-Antelope gas field holds at least 6.2 trillion cubic feet of natural gas, and further drilling should expand this reserve.

Total shares were down 0.4% to 47.68. The CRP will not be transferrable and will not be listed on any exchange.

When completed, the acquisition will offer ExxonMobil access to InterOil’s assets base, which comprises stake in six licenses in Papua New Guinea ranging upto four million acres, and include PRL 15. The PNG LNG plant is a almost $20 billion megaproject on the island north of Australia that first began shipping gas cargoes two years ago. ExxonMobil will bring to bear its industry-leading performance and strong commitment to excellence as it grows its business in Papua New Guinea.

Exxon said it plans to chill, liquefy and export the gas from the Elk-Antelope field in its PNG LNG complex on the coast of the South Pacific nation. Total SA and Oil Search have already signalled their desire to cooperate with the PNG LNG Project, to maximise synergy values for all stakeholders.

Oil Search was due to raise equity from Total had its takeover deal with InterOil gone through, causing some to question whether it may need to go to the market more broadly with a capital raising it if didn’t.

In addition to InterOil shareholder and court approvals, the ExxonMobil Transaction is also subject to other customary conditions.

InterOil’s board has switched to backing ExxonMobil’s offer over the rival bid from Oil Search, although the Australian company has the chance to trump the counter offer.

Oil Search had until today to match Exxon’s multi-billion dollar offer but decided such a move couldn’t be justified. Total and Oil Search had three days to respond with a counterbid.

Davis Polk & Wardwell LLP and Blake, Cassels & Graydon LLP are Exxon’s legal advisers.