InterOil Selects Total For PNG Gas Development

(RTTNews) - InterOil Corp. (IOC) announced it has agreed to sell to Total S.A. (TTA.L, TTFNF.PK, TOT) a gross 61.3% interest in Petroleum Retention License 15, which contains the Elk-Antelope gas fields in the Gulf Province of Papua New Guinea, and has also granted Total an exclusive right to negotiate a farm-in to all its exploration licenses in Papua New Guinea.

InterOil said the agreement with Total provides for fixed and variable resource-based payments. The transaction price depends on appraisal and certification of Elk-Antelope, with illustrative payments of approximately US$1.5 billion-US$3.6 billion, for a range of 5.4 trillion to 9.0 trillion cubic feet of hydrocarbon gas equivalent.

Fixed payments to InterOil include: US$613 million on transaction completion, which is expected in the first quarter of 2014; US$112 million on a final investment decision for a new LNG plant; and US$100 million at first LNG cargo from the proposed LNG facility. Total has agreed to make a payment of US$100 million per tcfe for volumes over one tcfe for additional resources discovered in PRL15 from one exploration well.

Total and InterOil have also agreed to explore other business opportunities both in Papua New Guinea and elsewhere in the Asia Pacific region.