InterOil Updates on ExxonMobil Transaction

Papua New Guinea focused InterOil Corporation on November 7 said ExxonMobil remains fully supportive of the InterOil-ExxonMobil transaction that was signed earlier this year despite an appeals court in Canada overturning approval of US major’s purchase of InterOil.

InterOil chairman Chris Finlayson said: 'Despite this disappointing ruling, we're pleased that ExxonMobil has advised that they remain fully supportive of the transaction as InterOil works through the issues raised by the Court.'

On November 4, the Court of Appeal of Yukon allowed the appeal lodged by founder and former CEO Phil Mulacek, and overturned the Supreme Court of Yukon's approval of the pending transaction with Exxon. Mulacek, who is still a shareholder, has been arguing that InterOil shareholders have not been compensated adequately. Early October, the Supreme Court of Yukon had approved the transaction, calling it fair and reasonable. InterOil is incorporated in Yukon, Canada.

InterOil said it is in discussions with ExxonMobil with respect to extending the outside date and is also considering options to file for leave to appeal to the Supreme Court of Canada.

In May, InterOil entered into a binding agreement to be acquired by Oil Search for $2.2bn, with Oil Search to sell a little over 60% to Total for $1.2bn. But on July 21, ExxonMobil trumped Oil Search’s bid to acquire InterOil with a $2.5bn-$3.6bn bid, the sum payable depending on the size of the reserves.

Shardul Sharma