Fri, Oct. 21, 10:22 PM
- Raymond James analyst Pavel Molchanov has long been bearish on ExxonMobil (NYSE:XOM), and now he recommends the same advice for current InterOil (NYSE:IOC) shareholders following XOM's buyout: Sell.
- Molchanov says XOM is poorly positioned to take full advantage of a sustained oil price recovery, as the company's structural overweight to refining, chemicals, and (within upstream) non-LNG gas does not directly benefit from rising oil prices; he also says XOM shares already are pricing in long-term oil prices at an above-consensus WTI at $70/bbl.
- For current IOC shareholders, Molchanov says sell the post-buyout shares and use the proceeds to reinvest into any of a wide range of oil-levered stocks such as Halliburton (NYSE:HAL), Hess (NYSE:HES), Marathon Oil (NYSE:MRO) and Whiting Petroleum (NYSE:WLL).
- Molchanov believes the IOC founder's last-ditch attempt to delay XOM’s purchase will not succeed; the next hearing is scheduled for Oct. 31.
Tue, Sep. 20, 6:19 PM
- InterOil (NYSE:IOC) founder and ex-CEO Phil Mulacek concedes that most of the company’s shareholders will vote in favor of ExxonMobil’s (NYSE:XOM) acquisition tomorrow.
- Mulacek objected to XOM’s bid when it was announced in July, saying IOC directors should have pressed for a better deal, and says that during the final months of his time as CEO, negotiations were underway with XOM over an offer that was 3x higher than the current deal.
- Under the July deal, XOM agreed to pay $45-$71.87/share, depending on how much gas in IOC's Elk-Antelope field, which prompted Mulacek to rip into IOC directors as “incompetents” who “ripped off shareholders.”
Tue, Aug. 23, 12:58 PM
- Oil Search (OTCPK:OISHF) says development of a second standalone liquefied natural gas export terminal in Papua New Guinea is unlikely, as Exxon Mobil and Total are expected to favor cooperation to expand the existing PNG LNG project.
- The company says it is in the midst of a strategy review after losing out in its battle for InterOil (NYSE:IOC) to be completed by Q4, which will focus on cooperation between the PNG LNG and Papua LNG projects to determine what strategies hold the most value for all stakeholders.
- The remarks followed Oil Search's release of H1 results, which included an 89% Y/Y decline in net income to a below consensus $25.6M as a drop in energy prices offset increased production.
- Oil Search owns 29% of the Exxon Mobil-led (NYSE:XOM) PNG LNG project and a 22.8% stake in the Papua LNG development operated by Total and co-owned by IOC.
Mon, Aug. 15, 12:43 PM
- InterOil (IOC -0.1%) is downgraded to Market Perform from Outperform with a $52 price target at Bernstein, which believes a counter-bid from Total now is unlikely following Exxon Mobil's $2.5B offer for the company.
- The firm foresees upside potential to IOC's latest certification that suggests 2C resources of 6.43T cfe due to the change in certifiers in the next round and “involvement of Exxon Mobil who are incentivized to maximize the resource estimate."
- Bernstein also expects further upside from Antelope-7, which is expected to be drilled at the end of 2016; IOC has guided to potential upside of as much as 3T cf.
Thu, Aug. 4, 7:10 AM
Wed, Aug. 3, 5:30 PM
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Mon, Jul. 25, 7:22 PM
- Former InterOil (NYSE:IOC) chairman/CEO Phil Mulacek - as well as the company's third-largest investor, with a 5.35% stake - says ExxonMobil’s (NYSE:XOM) takeover offer is “vastly inadequate” and urges XOM to sweeten the offer.
- Mulacek claims the bonus XOM plans to pay out based on how much gas the Elk-Antelope discovery holds will force IOC shareholders to “forego billions of dollars of value," and believes XOM should modify the way it will calculate the contingent resource payments.
- XOM struck a deal last week to pay from $45 to $71.87/share, depending on how rich the Elk-Antelope field is in gas: XOM’s base price is $45 of its own stock for each IOC share, and XOM will pay CRPs as high as $26.87/share for every 1T cf of gas reserves above 6.2T cf that Elk-Antelope holds.
Thu, Jul. 21, 12:23 PM
- InterOil (IOC +0.2%) makes it official: Exxon Mobil (XOM -0.2%) agrees to acquire IOC in a deal that valued the company at $2.5B; shares are halted.
- XOM will pay $45/share plus an additional contingent payment of $7.07/share for each Tcfe gross resource certification of the Elk-Antelope field above 6.2T cfe, up to a maximum of 10T cfe.
- Oil Search (OTCPK:OISHF) opened the way for XOM last night when it said it was dropping out of the bidding for IOC.
Wed, Jul. 20, 11:38 PM
- The way is clear for Exxon Mobil (NYSE:XOM) to buy InterOil (NYSE:IOC) after Oil Search (OTCPK:OISHF) says it is dropping out of the bidding.
- Oil Search and Total (NYSE:TOT) had jointly offered to buy IOC in May in a deal that valued the company at $2.2B; XOM topped the bid earlier this week with an all-stock offer Oil Search says totaled $2.5B.
- IOC owns a 36.5% stake in Papua New Guinea's Elk-Antelope natural gas field (TOT is the operator) and had proposed building a second gas project in the country to compete with the existing XOM-led PNG LNG facility.
- Oil Search and TOT say that allowing XOM to take over IOC could help speed up development of Elk-Antelope and that cooperation between the two projects could save ~$2B.
- "This scenario would be the lowest cost viable supply in the Pacific Basin," Wood Mackenzie analyst Saul Kavonic tells Reuters. "Those are the negotiations that will have to take place in order for that joint development to occur."
Wed, Jul. 20, 10:27 AM
- Total (TOT -0.7%) says it is analyzing Exxon Mobil's (XOM -0.3%) competing offer for InterOil (IOC -0.4%), its partner in developing natural gas in Papua New Guinea, by Oil Search (OTCPK:OISHF), but analysts say TOT is unlikely to challenge XOM in a bidding war.
- Analysts say it makes sense for TOT to let XOM have IOC, as using the Elk-Antelope gas field to feed an expansion of XOM's existing PNG LNG plant could generate double the return compared to building TOT's proposed $10B Papua LNG plant.
- TOT says in its statement that it would remain the largest shareholder of the Elk-Antelope joint venture with 31.1% interest while IOC owns 28.3% and OISHF holds 17.7%.
- The oil majors are targeting Papua New Guinea for growth as the quality of its gas, low costs and proximity to Asia's big liquefied natural gas consumers make it one of the world's most attractive places for gas projects.
Tue, Jul. 19, 12:48 PM
- Exxon Mobil's (XOM -0.3%) offer to buy InterOil (IOC -0.5%) for at least $2.2B shows “that rare corporate ability of planning a deal at the bottom of the commodity cycle that holds the promise of long-term returns,” Reuters’ Clyde Russell writes.
- Russell believes that XOM’s best option to expand its 6.9M metric tons/year capacity at its existing Papua New Guinea liquefied natural gas plant is to acquire sufficient reserves to justify building another liquefaction train in the country; IOC's Elk-Antelope gas field holds at least 6.2T cf of natural gas, and further drilling should expand this reserve.
- Russell says this means that XOM's bid, if successful, could underwrite the expansion of its PNG LNG project on a time scale that may see it deliver its first cargoes just as the surplus of LNG is expected to disappear in the mid-2020s.
- The big question, according to Russell is the next move from Total (TOT -1%) - operator and 40.1% owner of Elk-Antelope with IOC the next biggest holder at 36.5% - which has outlined plans to build its own LNG project in Papua New Guinea.
Mon, Jul. 18, 2:23 AM
- Exxon Mobil (NYSE:XOM) has made a superior $2.2B offer for InterOil (NYSE:IOC), outbidding Oil Search (OTCPK:OISHF) for the company's large natural gas reserves in Papua New Guinea and the possibility to export the fuel from the Pacific nation.
- The move pits Exxon Mobil, the world's biggest oil company, against Total (NYSE:TOT), which is backing Oil Search. The latter has at least until July 21 to submit a revised offer.
Tue, Jul. 12, 10:05 PM
- Exxon Mobil (NYSE:XOM) has offered to buy InterOil (NYSE:IOC) for more than the $2.2B deal from Oil Search (OTCPK:OISHF), Reuters reports.
- XOM's interest is comprised of shares as well as a contingent value right, which may give IOC shareholders cash on a sliding scale depending on the value of a pending gas deposit discovery - the same structure as the Oil Search bid, but higher - according to the report.
- IOC agreed in May to be acquired by Oil Search but two weeks ago it said it received another non-binding offer; XOM has been rumored to be the mystery suitor.
Tue, Jul. 5, 11:47 AM
- Exxon Mobil (XOM -1.3%) has not identified itself as the bidder announced by InterOil (IOC +0.5%) last week, but Australian newspapers are saying XOM is indeed the suitor, which also cite two sources involved in the bidding.
- XOM has the most to gain from a bid: Buying IOC would secure it a 36.5% stake in Papua LNG, which contains the Elk-Antelope field located close to the XOM-operated PNG LNG, and gas from Elk-Antelope would be piped along the same offshore pipeline route as PNG LNG and ultimately shipped from the same port.
- XOM has until July 28 to finalize its offer ahead of an IOC shareholder vote on a $2.2B takeover offer from Oil Search (OTCPK:OISHF).
Thu, Jun. 30, 2:01 PM
Thu, Jun. 30, 8:32 AM
- InterOil (NYSE:IOC) +4.1% premarket after saying it received an unsolicited takeover proposal by an unnamed third party, a development that could threaten Oil Search's (OTCPK:OISHF) $2.2B deal to acquire the company.
- IOC says its board is reviewing the offer, while continuing to recommend the Oil Search deal; the value of the new proposal is not disclosed.
- IOC says its shareholders will vote on the Oil Search takeover on July 28.