Oil Search to acquire InterOil in $2.2 billion deal
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Oil Search will provide InterOil shareholders with a cash alternative for the share component.
The implied transaction value of the Oil Search share component of the consideration is $40.252 per InterOil share, for a total transaction value of approximately $2.2 billion, which represents a significant premium to InterOil’s recent trading prices.
In addition, the CVR entitles holders to
a contingent cash payment that is linked to the volume of 2C hydrocarbon gas resource certified to be contained in the Elk-Antelope fields.
Each CVR will deliver approximately $6.05 per InterOil share for each tcfe above 6.2 tcfe gross certified 2C resource in the Elk-Antelope fields, and will be paid in cash upon completion of the certification process. The CVR provides InterOil shareholders with an uncapped additional payment, depending on the size of the certified 2C resources in the Elk-Antelope fields.
Oil Search will also provide InterOil shareholders with a cash alternative for the share component, up to a total of $770 million, with any cash not taken up by InterOil shareholders to be applied to an Oil Search share buyback following completion of the InterOil Transaction in order to reduce dilution for Oil Search shareholders.
In a separate agreement, Oil Search and Total have executed a Memorandum of Understanding (the Total MoU), under which Oil Search will sell to Total, for cash, 60% of the interest acquired from InterOil in Petroleum Retention Licence (PRL) 15 and 62% of InterOil’s exploration assets, subject to closing of the InterOil Transaction and entry into definitive documentation with Total, thereby de-risking the acquisition of InterOil. ■