9 Dec 2013

Huge PNG deal cuts value of Interoil

8:12 pm on 9 December 2013

The petroleum company InterOil has reportedly lost over a third of its market value after concluding an agreement to sell a majority of its Papua New Guinea natural gas licences.

Interoil announced late last week it is selling the French oil and gas company Total a 61.3 percent stake in the Elk and Antelope gas fields in Gulf province.

The fields are yet to be developed.

Bloomberg reports that InterOil priced the deal at up to US $3.6 billion, although it won't receive a definitive price until at least 2015, depending on evaluation of assets by Total.

Total reached a gas exploration deal last year with Port Moresby-based Oil Search, which owns a 29 percent stake in the Exxon Mobil-led LNG project about to begin production in PNG.

An Interoil release says it has also granted Total an exclusive right to negotiate a farm-in to all its exploration licences in PNG.