Deal Insight

Exxon outbids Oil Search for InterOil

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08 August 2016

Exxon outbids Oil Search for InterOil

Report summary

ExxonMobil is to acquire InterOil, after outbidding Oil Search. The prize is LNG. PRL15 is an undeveloped multi-tcf gas discovery, earmarked to supply some of the lowest breakeven pre-FID LNG projects globally. There are still huge uncertainties as to how development of PRL15 will play out. Our base case has assumed a two-train, greenfield LNG development – Papua LNG. The entrance of ExxonMobil, which operates the competing PNG LNG project, almost certainly changes the story. Nonetheless (and to some extent because of these uncertainties), we think the deal represents a big vote of confidence in: 1) long-term LNG demand, despite near-term over-supply; 2) the global competitiveness of Papua New Guinea LNG specifically; 3) yet-to-find resource upside on the block; 4) long-term oil prices in excess of US$70/bbl.

Table of contents

  • Executive summary
  • Transaction details
    • PRL15 (Elk-Antelope)
    • Other assets
    • Development scenarios
      • Scenario 1: Papua LNG
      • Scenario 2: integration with PNG LNG expansion
    • InterOil
    • ExxonMobil
    • Implications for Oil Search and Total
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 5 images and tables including:

  • Transaction details: Table 1
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Strategic rationale: Table 1
  • Deal analysis: Table 1

What's included

This report contains:

  • Document

    Exxon outbids Oil Search for InterOil

    PDF 297.08 KB