Total to be the Loser if Xom wins

[ioc.aussie]

US energy giant ExxonMobil has, as expected, intervened to spoil Oil Search's $US2.2 billion takeover ambitions for Papua New Guinea gas explorer InterOil, leaving the ASX-listed player needing to lift its own bid by about 10 per cent or be knocked out of the running. Exxon's bid, of $US45 ($59.4) per share in stock plus an additional payment depending on the size of InterOil's Elk-Antelope gas field, has been deemed by InterOil's board to be superior to Oil Search's friendly deal struck in May. That means Oil Search now has three days to match it to stay in the race. However even if it doesn't, Port Moresby-based Oil Search is expected to benefit, given an Exxon takeover of InterOil would improve the chances of a new competitive LNG project in PNG. US-listed InterOil advised earlier this month it had received an eleventh-hour alternative proposal from an unidentified third party but which The Australian Financial Review revealed was ExxonMobil. At that stage the offer, believed to be the second bid the US major has made for InterOil after an initial offer last year, had yet to be firmed up. With French oil major Total SA supporting Oil Search's offer, the tussle has drawn in some of the world's most powerful energy heavyweights. ExxonMobil is the operator of the $US19 billion PNG LNG venture, but doesn't have a stake at present in Elk-Antelope, which Oil Search and Total plan to develop to feed a new LNG venture, Papua LNG. Related Quotes OSH OIL SEARCH FPO 10T (OSH) $7.230.253.51% volume 4258507value 30542068.8 5 years 1 Day May14GMT+1000 (AUS Eastern Standard Time)Jul11Jul1667895.8869.689 Last updated: Mon Jul 18 2016 - ‎1‎:‎30‎:‎19‎ ‎PM View full quote Company Profile Exploration for oil and gas deposits in Papua New Guinea and the development and production of such deposits. http://www.oilsearch.com Oil, Gas & Consumable Fuels (101020) ASIC 055079868 ASX Announcements 18/7/16 IOC notification of Superior Proposal 15/7/16 PAC sellers' certification completed 7/7/16 Drilling Report for June 2016 1/7/16 Notification From IOC 1/7/16 OSH Advises of Notice of Meeting and MIC View all announcements Total is aware of the latest developments, Oil Search said on Monday. "The parties are in active dialogue and have the flexibility to submit a revised offer either during the three day notice period or after InterOil enters into an arrangement agreement with ExxonMobil," the company said. Oil Search said its board and management "are committed to acting in the best interests of shareholders at all times and are presently considering their position". Several equity analysts have said they would not want to see Oil Search raise its own bid, a view echoed by Morgans senior resource analyst Adrian Prendergast on Monday. "Our preference would be for [Oil Search to give way to Exxon] given OSH could not hope to match the clout of its massive JV partner in the event of a competitive bidding process," Mr Prendergast said. Oil Search is entitled to a $US60 million break fee from InterOil if the deal folds. It would also gain if Exxon wins InterOil as that would essentially ensure the integration of the PNG LNG and Papua LNG ventures, in both of which it has a stake. Oil Search managing director Peter Botten has estimated potential synergies from integrating the two LNG projects at $US2 billion-$US3 billion. Shares in Oil Search rose as much as 3.7 per cent to $7.24 on Monday morning. Oil Search's bid involves a stock offer worth about $US40.25 per share at the time it was made, plus a security whose value depends on how much gas is determined to be in Elk-Antelope, widely seen as one of the world's most competitive new gas supply sources for LNG production. That security is worth US77c per thousand cubic feet for any gas volume in Elk-Antelope beyond 6.2 trillion cubic feet and would be tradeable on the stock exchange. In Exxon's offer, the value put on any gas beyond 6.2 tcf is US90c, but the resource size is capped at 10 tcf. Exxon's "contingent resource payment" would also not be transferable between InterOil shareholders or listed on an exchange. Mr Prendergast said Exxon's entry into the Elk-Antelope joint venture supplying Papua LNG would be "in everyone's best interest". "Exxon is a world-class operator, would be able to manage all of the marketing for the project, and presumably would be able to organise group financing in the same way it did for PNG LNG," he said. "Total would initially remain the operator of Elk-Antelope, but we see a case for Exxon taking over operatorship as part of future potential negotiations around linking the two LNG projects." But in that case, Total would be the big loser as its ambitions to operate an LNG project in Asia would be foiled and it would remain with a smaller stake in Elk-Antelope. Read more: http://www.afr.com/business/energy/gas/e...z4EjBRtzJy Follow us: @FinancialReview on Twitter | financialreview on Facebook

[Stavros]

Mr. Prendergast said Exxon's entry into the Elk-Antelope joint venture supplying Papua LNG would be "in everyone's best interest". "Exxon is a world-class operator, would be able to manage all of the marketing for the project, and presumably would be able to organise group financing in the same way it did for PNG LNG," he said. "Total would initially remain the operator of Elk-Antelope, but we see a case for Exxon taking over operatorship as part of future potential negotiations around linking the two LNG projects." But in that case, Total would be the big loser as its ambitions to operate an LNG project in Asia would be foiled and it would remain with a smaller stake in Elk-Antelope."

Dear Mr. Phatprick Pouyanne:

You were so sure a few weeks ago that InterOil Concerned Shareholders would be the big losers!

Now you have a choice . . . either TOTAL is the big loser, or you pay us properly for our assets.

Let us know your decision NOOS.

[ioc.aussie]

[quote='ioc.aussie' pid='74060' dateline='1468812950']

Mr. Prendergast said Exxon's entry into the Elk-Antelope joint venture supplying Papua LNG would be "in everyone's best interest". "Exxon is a world-class operator, would be able to manage all of the marketing for the project, and presumably would be able to organise group financing in the same way it did for PNG LNG," he said. "Total would initially remain the operator of Elk-Antelope, but we see a case for Exxon taking over operatorship as part of future potential negotiations around linking the two LNG projects." But in that case, Total would be the big loser as its ambitions to operate an LNG project in Asia would be foiled and it would remain with a smaller stake in Elk-Antelope."

Dear Mr. Phatprick Pouyanne:

You were so sure a few weeks ago that InterOil Concerned Shareholders would be the big losers!

Now you have a choice . . . either TOTAL is the big loser, or you pay us properly for our assets.

TOTAL have spent too much time and money on this project to walk away now. They have made committments to th PNG Government   .

Still a good buy at XOM + 10%

[jft310]

It's the IOC SPA payments that makes it clear Total must bid or pay Exxon over $1 Billion in payments .
OSH may not even bid again but Total is between the Rock and the hard place and Exxon can keep pushing the envelope .