Exxon boosts bid for InterOil; still not enough for prime opponent

[Gator]

Exxon Mobil Corp.’s offer to raise its bid for InterOil Corp. to as high as $3.9 billion isn’t enough to pacify the

deal’s most prominent opponent.

InterOil founder Phil Mulacek, who left in in 2013 and remains the third-largest shareholder, said Exxon still isn’t

offering shareholders full value for InterOil’s hydrocarbon reserves in Papua New Guinea. Exxon last week

increased the amount of gas reserves for which it would pay a bonus to shareholders, essentially boosting its

maximum offer by 9.8 percent.

Mulacek’s opposition complicates what would be Exxon’s largest acquisition since 2010 and the Irving, Texasbased

company’s plans to assimilate InterOil’s gas reserves into its existing Papua New Guinea liquefied

natural gas project. The Court of Appeal of Yukon in Canada halted the deal in November after an appeal from

Mulacek.

“The key points we have stressed from the beginning are not addressed at all by the recent Exxon-IOC

proposed offer,” Mulacek said by e-mail. “We remain opposed.”

Spokespersons for InterOil didn’t immediately respond to requests for comment. Lauren Kerr, an Exxon

spokeswoman, declined to comment. InterOil shares in New York rose 0.4 percent Wednesday to close at

$49.92, the highest level since Oct. 19.

Exxon is offering a deal that would pay InterOil shareholders an up-front fee for their shares as well as a socalled

‘contingent resource payment’ bonus based on an estimate of how much gas can be recovered from the

Elk and Antelope fields in Papua New Guinea, in which InterOil maintains a 36.5 percent stake. Exxon last week

raised the cap on the extra payment to 11 trillion cubic feet, from it’s original 10 trillion.

Estimating Reserves

Mulacek called the increase “illusory” and said the real issue isn’t the cap, but the way that Exxon is estimating

the reserves. Exxon should pay based on the initial estimate as well as on a second estimate reached after

production begins, when more information will be made available.

Mulacek also said he believes an appraisal well being used to estimate reserves missed its target and will

underestimate the amount of gas in place. InterOil said in a press release Friday that the well, known as

Antelope-7, has been drilled to 2,127 meters (6,979 feet) of its proposed 2,300-meter depth and has not hit the

reservoir yet.

InterOil in 2014 sold Total SA about 40 percent of the Elk and Antelope fields in a deal that also included

contingent resource payments based on reserves. Mulacek also wants those payments passed through to

InterOil shareholders.

“InterOil shareholders deserve to be paid based on the true size of the Elk and Antelope fields,” Mulacek said.

“Without fixing these fundamental problems, we are unable to support the Exxon Mobil proposal as it is

ethically flawed.”

http://fuelfix.com/blog/2016/12/22/exxon...-opponent/

[Martinistocks]

amen!

[Kaliboo]

Exxon Mobil Corp.’s offer to raise its bid for InterOil Corp. to as high as $3.9 billion isn’t enough to pacify the

deal’s most prominent opponent.

InterOil founder Phil Mulacek, who left in in 2013 and remains the third-largest shareholder, said Exxon still isn’t

offering shareholders full value for InterOil’s hydrocarbon reserves in Papua New Guinea. Exxon last week

increased the amount of gas reserves for which it would pay a bonus to shareholders, essentially boosting its

maximum offer by 9.8 percent.

Mulacek’s opposition complicates what would be Exxon’s largest acquisition since 2010 and the Irving, Texasbased

company’s plans to assimilate InterOil’s gas reserves into its existing Papua New Guinea liquefied

natural gas project. The Court of Appeal of Yukon in Canada halted the deal in November after an appeal from

Mulacek.

“The key points we have stressed from the beginning are not addressed at all by the recent Exxon-IOC

proposed offer,” Mulacek said by e-mail. “We remain opposed.”

Spokespersons for InterOil didn’t immediately respond to requests for comment. Lauren Kerr, an Exxon

spokeswoman, declined to comment. InterOil shares in New York rose 0.4 percent Wednesday to close at

$49.92, the highest level since Oct. 19.

Exxon is offering a deal that would pay InterOil shareholders an up-front fee for their shares as well as a socalled

‘contingent resource payment’ bonus based on an estimate of how much gas can be recovered from the

Elk and Antelope fields in Papua New Guinea, in which InterOil maintains a 36.5 percent stake. Exxon last week

raised the cap on the extra payment to 11 trillion cubic feet, from it’s original 10 trillion.

Estimating Reserves

Mulacek called the increase “illusory” and said the real issue isn’t the cap, but the way that Exxon is estimating

the reserves. Exxon should pay based on the initial estimate as well as on a second estimate reached after

production begins, when more information will be made available.

Mulacek also said he believes an appraisal well being used to estimate reserves missed its target and will

underestimate the amount of gas in place. InterOil said in a press release Friday that the well, known as

Antelope-7, has been drilled to 2,127 meters (6,979 feet) of its proposed 2,300-meter depth and has not hit the

reservoir yet.

InterOil in 2014 sold Total SA about 40 percent of the Elk and Antelope fields in a deal that also included

contingent resource payments based on reserves. Mulacek also wants those payments passed through to

InterOil shareholders.

“InterOil shareholders deserve to be paid based on the true size of the Elk and Antelope fields,” Mulacek said.

“Without fixing these fundamental problems, we are unable to support the Exxon Mobil proposal as it is

ethically flawed.”

http://fuelfix.com/blog/2016/12/22/exxon...-opponent/

Thanks.  Glad to hear Phil speak up.  The A7 announcement is very disappointing....so far.

[AU74]

WE need one more large sharholder to come out against the deal and it will effectively be dead. Do any of them have balls to do it?

[jft310]

Every institutional shareholder should review the Dell law suite . In that suit T R Price was successfully sued for $200 million dollars for not voting no and dissenting on the Dell deal . Carl Icahn filed his dissent and he won causing a difference in price between his receiver price and what other shareholders received . Dell had a favorable fairness opinion.