by Meriba Tulo – EM TV News, Port Moresby
Australian Energy Company, Woodside, has today formally put forward a proposal to acquire Oil Search Limited.
The offer, announced to both the Australian Stock Exchange and Port Moresby Stock Exchanges today, is subject to certain conditions, one being that Woodside’s bid be supported by the government of Papua New Guinea.
This morning, Woodside confirmed that it provided Oil Search Limited a confidential and non-binding proposal to merge.
In a statement released to the Australian Stock Exchange (ASX), Woodside further indicated that it is currently engaged in discussion with Oil Search, and there is no certainty that these discussions will result in a transaction.
The offer put forward by Woodside is subject to the following:
1. Completion by Woodside of satisfactory due diligence on Oil Search;
2. Execution of a mutually acceptable confidentiality agreement;
3. Oil Search granting an agreed period of exclusivity;
4. Oil Search obtaining support from key stakeholders and shareholders; and
5. Woodside being satisfied that the transaction is likely to be supported by the PNG Government on acceptable terms.
Today, Oil Search Limited also informed both the ASX and POMSoX about Woodside’s proposal, adding that its board intends to review the proposal and will update shareholders and the market in due course.
In its statement, Oil Search highlighted its strengths, saying it has a material equity position in the world class PNG LNG Project and attractive, low cost, LNG development opportunities including the PNG LNG Train 3 expansion and the Papua LNG Project – which provides substantive scope for capital growth and position the company to capitalise from a recovery in the oil price.
Oil Search has emphasised that there is no guarantee that a binding proposal can be agreed between the parties at this stage, but adds that its shareholders are entitled to an offer which adequately reflects its value potential.