ExxonMobil launches bidding war for InterOil

Papua New Guinea oil and gas firm InterOil said Monday that had received an acquisition bid from ExxonMobil that's more lucrative than a previous deal offered by Oil Search Limited, setting up a potential bidding war.

The ExxonMobil offer represents a "superior proposal" under the terms of InterOil's previous tie-up agreement, under which Oil Search now has three days to make a new offer, InterOil said.

ExxonMobil's deal usurps the Oil Search accord backed by France-based energy giant Total SA, which wants access to InterOil's position in 16,000 square kilometers of undeveloped gas fields in Papua New Guinea.

The new offer is worth at least $2.5 billion, plus additional payments based on future findings of unexpected additional energy capacity available for extraction by InterOil.

The base price is $45 per share, better than Oil Search's offer of $40.25, or $2.2 billion plus contingent payments based on capacity determination.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.