OSH Oil Search Limited

   By Robb M. Stewart 
 

MELBOURNE, Australia--Oil Search Ltd. (OSH.AU) has struck a deal worth about US$2.2 billion to buy fellow Papua New Guinea-focused oil-and-gas company InterOil Corp. (IOC.AU).

The deal will boost Oil Search's exposure to what is expected to be the next major gas-export project to be built in the Pacific country and potentially see it developed alongside an existing liquefied natural gas venture in which Oil Search has a stake.

Oil Search said the deal has been approved by the boards of both companies, and would see InterOil shareholders receive Oil Search shares plus a cash payment tied to the certification of the resource for a discovery. The offer implies a value of US$40.25 an InterOil share.

Oil Search said it also has signed a memorandum of understanding with Total SA (TOT) to sell to the French energy company majority stakes in exploration assets acquired from InterOil. With both deals, Oil Search's stake in the planned Papua LNG project will increase to 29% and Total's interest to 48.1%.

-Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 19, 2016 19:05 ET (23:05 GMT)

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