Oil Search Limited managing director Peter Botten confirmed yesterday that OSL has received a non-binding indicative proposal from Woodside.
Mr Botten said that Woodside’s bid offers to acquire all Oil Search shares for a consideration of one Woodside share for every four Oil Search shares held. The proposal is subject to the following conditions:
Completion by Woodside of satisfactory due diligence on Oil Search;
Execution of a mutually acceptable confidentiality agreement;
Oil Search granting an agreed period of exclusivity;
Oil Search obtaining support from key stakeholders and shareholders; and
Woodside being satisfied that the transaction is likely to be supported by the PNG Government on acceptable terms. The proposal would also be conditional on the parties entering into a binding Implementation Agreement. If the above conditions are satisfied and the proposal does proceed, the transaction would itself be subject to further conditions precedent, including Oil Search shareholder, court and PNG regulatory approvals.
In the meantime, Oil Search board intends to review the Proposal and will update shareholders and the market in due course.
The company also wishes to emphasise that there is no guarantee that a binding proposal can be agreed between the parties.
Mr Botten said while Oil Search will consider the proposal, it should be noted that Oil Search 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.
This, combined with the company’s low operating cost producing assets, reserves upside, significant discovered resources and extensive and high quality exploration acreage position, provide substantive scope for capital growth and position Oil Search to capitalize from a recovery in the oil price.
He said clearly, Oil Search shareholders are entitled to an offer which adequately reflects this value potential.
Oil Search has appointed Morgan Stanley as its financial adviser and Allens as its legal adviser.
The Government, which owns 10 per cent stake in OSL, said in a short statement that it is waiting for a full briefing on the offer.
"The offer will be considered if it is in the national interest," a spokesman said yesterday.