The sale of IOC to Exxon will close before the drilling of Antelope-7 and before the certification process commences. It is in the interest of both Companies and all Interoil shareholders for the certified volume to be as high as possible. All of the benefits of the SPA between IOC and Total will accrue to Exxon. Of course the IOC shareholders will benefit based on the agreement between IOC and Exxon since the value of the CRP increases $7.07/sh/TCF. Unfortunately those benefits accruing to Exxon will be greater than those granted to IOC under the takeover “Arrangement Agreement”.
Here is what the Arrangement Agreement has to say about the drilling of Antelope-7 and the certification process:
WHEREAS, the Interim Resource Certification will not be completed before the Effective Time;
Interim Resource Certification” has the meaning set forth in the Total Sale Agreement
“Payment Condition” means (A) the Interim Resource Certification has been completed, and (B) the volume of PRL 15 2C Resources has been determined under the Total Sale Agreement and is greater than 6.2 Tcfe.
PRL 15 2C Resources” means “PRL 15 2C Resources” as defined in the Total Sale Agreement and as determined pursuant to the Interim Resource Certification set out in the Total Sale Agreement.
Section 3.05. Payment Procedures. (a) If the Payment Condition occurs, then AcquisitionCo will, as soon as practicable (and in any event not later than ten Business Days) after the date that the Payment Condition has been satisfied, deliver to the Holder Committee and the Escrow Agent a notice in writing (the “Achievement Certificate&rdquo
that the Payment Condition has been satisfied, which notice shall include the amount of the Aggregate CRP Payment and the amount of the Distributable CRP Payment and Loan Proceeds Payment in respect of each EVR. Acquisition Co will also, subject to Applicable Confidentiality Obligations, disclose the result of the Interim Resource Certification to the Escrow Agent and the Holder Committee (and AcquisitionCo shall use its commercially reasonable efforts to obtain any consents required in order to make such disclosure, or to otherwise cause such disclosure to be permitted under Applicable Confidentiality Obligations, including ensuring that any agreed-upon extensions or amendments to the Applicable Confidentiality Obligations include language permitting such disclosure). The Escrow Agent will promptly (and in any event, within 10 days after receipt) deliver a copy of such Achievement Certificate to the Holders. The Escrow Agent will deliver to AcquisitionCo and the Holder Committee a certificate certifying the date of delivery of such Achievement Certificate to the Holders.© If the Interim Resource Certification has been completed, the volume of PRL 15 2C Resources has been determined under the Total Sale Agreement and the volume of PRL 15 2C Resources is equal to or less than 6.2 Tcfe, then promptly (and in any event not later than 10 Business Days) after the completion of the Interim Resource Certification, AcquisitionCo will deliver to the Escrow Agent and the Holder Committee an Officer’s Certificate (the “Non-Achievement Certificate”) certifying that the Payment Condition has not been satisfied and is incapable of being satisfied and that AcquisitionCo has complied in all material respects with its obligations under this Agreement. The Escrow Agent will promptly (and in any event, within 10 days after receipt) deliver a copy of such Non-Achievement Certificate to the Holders. The Escrow Agent will deliver to AcquisitionCo and the Holder Committee a certificate certifying the date of delivery of such certificate to the Holders.
Parent shall procure that all Subsidiaries of Parent support, and do not obstruct or delay, the drilling of the Antelope-7 well, including, as applicable, voting in favor of the Antelope-7 well at all Operating Committee Meetings convened by the operator of the PRL 15 joint venture (including any re-votes) and including not supporting any resolution or action that may have the effect of postponing the drilling of the Antelope-7 well.
AcquisitionCo will cause its Subsidiaries to support, and not obstruct or delay, the drilling of the Antelope-7 well, including:
(i) to the extent applicable, voting in favor of the Antelope-7 well when it is proposed at any operating committee meeting convened pursuant to the PRL 15 JOA; and
(ii) not supporting any resolution or proposed resolution at any operating committee meeting convened pursuant to the PRL 15 JOA to postpone or delay drilling of the Antelope-7 well.
(g) AcquisitionCo will, during the period commencing on the date hereof and ending on the date that all the EVRs are satisfied in full ensure that SPI (208) Limited continues to be registered under the Companies Act 1997 (PNG).
(h) AcquisitionCo will cause its Subsidiaries not to agree to the commencement of the Interim Resource Certification, and contest any purported notice received pursuant to Clause 3.3(a) of the Total Sale Agreement, until such time as the drilling and testing of the Antelope-7 well has concluded.
(p) During the Interim Resource Certification process, AcquisitionCo will use its commercially reasonable efforts to retain and consult with the persons set forth on Section 5.13 of the Company Disclosure Letter in connection with the Interim Resource Certification and the determination of the PRL 15 2C Resources, including with respect to the preparation of submissions and data for delivery to the independent certifiers undertaking the Interim Resource Certification. In connection with the foregoing, AcquisitionCo will use its commercially reasonable efforts to daily drilling reports and results of drilling and testing of the Antelope-7 well) in order to facilitate such consultants in furnishing advice, analyses, consultation and related services to AcquisitionCo.
