Oil Search Limited and Total SA have announced that they have entered into an exclusive Memorandum of Understanding (MoU). This follows Oil Search’s agreement to acquire InterOil Corporation (InterOil).
Oil Search will sell down 60% of InterOil’s interests in PRL 15 and 62% of InterOil’s interests in its other exploration assets to Total following the successful completion of Oil Search’s acquisition of InterOil. The terms of the sell down will be consistent with the value implied under the InterOil transaction.
Oil Search and Total will seek to maximise the value for all stakeholders by pursuing cooperation and/or integration opportunities with the PNG LNG Project.
The transaction is anticipated to occur shortly after completion of the proposed acquisition of InterOil. Following completion of the sell-down process, Oil Search and Total will share, on a pro rata basis, all costs and liabilities in respect of acquiring InterOil, as well as any future Contingent Value Rights payable to InterOil shareholders, at or above a 2C resource of 6.5 tcfe for Elk/Antelope.
Following the sell-down to Total, Oil Search expects to have an equity interest in PRL 15 of up to 37.4%, or 29.0% post government back-in, with Total holding an equity interest in PRL 15 of up to 62.1%, or 48.1% post government back-in. This equates to Oil Search selling down 60% of InterOil’s 36.5% (28.3% post government back-in) PRL15 interest to Total.