InterOil Bidding War On The Horizon? Exxon Mobil Makes An Offer

InterOil Corporation (USA) IOC may be on the brink of a bidding war following the reported entry of Exxon Mobil Corporation XOM in the fray.

Citing people familiar with the matter, Reuters reported that Exxon Mobil offered to buy InterOil in excess of the $2.2 billion deal from Australia's Oil Search Limited (ADR) OISHY.

InterOil agreed to be acquired by Oil Search in May, but late June, InterOil stated it received another non-binding offer "even as global markets roiled in the wake of Britain's exit from the European Union."

InterOil is an independent oil and gas business with a sole focus on Papua New Guinea. InterOil's assets include one of Asia's largest undeveloped gas fields, Elk-Antelope, in the Gulf Province, and exploration licenses covering about 16,000-square kilometers. Its main offices are in Singapore and Port Moresby.

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Reuters reported that Exxon's offer includes "Exxon stock, as well as a Contingent Value Right (CVR), a seldom used instrument, which may give InterOil shareholders cash on a sliding scale depending on the value of a pending gas deposit discovery."

While this proposal follows the same structure as the Oil Search bid, Exxon's bid is higher, Reuters said.

InterOil's agreement with Oil Search allows for talks with a rival bidder as long as certain conditions are met.

At the time of writing, shares of InterOil rose 2.01 percent to $48.73, while Exxon slipped 0.19 percent to $94.73.