September 13, 2016 - 9:16 AM EDT
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Blog Coverage Exxon Mobil and Oil Search Partner to Acquire Gas Exploration Licenses in Papua New Guinea

LONDON, UK / ACCESSWIRE / September 13, 2016 / Active Wall St. blog coverage looks at the headline from Exxon Mobil Corporation (NYSE: XOM) ("ExxonMobil") as the company and Oil Search Ltd. announced on September 12, 2016 that they have entered into a partnership to acquire offshore licences from Gini Energy Ltd., which is owned by CNOOC (China National Offshore Oil Corporation) Ltd. (NYSE: CEO) for a joint gas exploration venture in Papua New Guinea. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/

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About Gini Energy

In March 2012, CNOOC Ltd. and UMC Energy had acquired equity in PNG Energy Ltd. wherein CNOOC held 70% whereas UMC Energy held the remaining 30%. PNG Energy through its wholly owned subsidiary Gini Energy Ltd. holds Petroleum Prospecting Licences (PPLs) in Papua New Guinea. As per the terms of agreements between CNOOC and UMC, CNOOC was responsible for funds required for all the expenditure for the exploration of the PPLs.

In January 2014, CNOOC had successfully conducted the 2D seismic acquisition program over the offshore Petroleum Prospecting Licenses (PPL), PPL374 and PPL375. The exploration recorded a total of 3015 line kms of 2D seismic data over the offshore permits in Papua New Guinea.

The Location

Gini owns the Petroleum Prospecting Licenses (PPL) to the offshore acreage PPL 374 and PPL 375. These licences are located 150 kilometres south of Port Moresby in the deep water section of the Gulf of Papua, Papua New Guinea and cover a combined area of 24,936 square kilometres, with water depths ranging between 1,000 metres and 2,500 metres.

The Deal

ExxonMobil and the subsidiary company of Oil Search, Oil Search (PNG) Ltd., have announced that they would acquire 40% each of the said licenses and each of the remaining 20% of licences will be retained by Gini. Subject to conditions precedent, operatorship of both licences will transfer from Gini to ExxonMobil. The financial terms of the deal have not been disclosed by the companies and the finalisation of the agreement is subject to regulatory approvals.

Oil Search had conducted extensive studies in the area in 2015-2016 and the results indicated significant potential for gas in the offshore Papuan Gulf where the licenses are located.

Commenting on the deal, Peter Botten, Managing Director of Oil Search said:

"We are delighted to be partnering with ExxonMobil, which has significant experience in exploration and production in deep water, and we also welcome the opportunity to work with CNOOC Limited for the first time."

Interestingly, in July 2016, ExxonMobil and Oil Search had entered into a bidding war to acquire InterOil Corp. ExxonMobil had finally closed the acquisition in a $ 2.5 billion deal. Oil Search, which has considerable assets in Papua New Guinea had plans to build a liquefied natural gas operation in six licences owned by InterOil in Papua New Guinea.

Stock Market reaction

ExxonMobil's share price has been slightly down in the past week. The stock finished yesterday's trading session at $87.29, advancing slightly 0.52%. A total volume of 10.83 million shares exchanged hands, which was higher than the 3 months average volume of 10.69 million shares. The stock has advanced 7.72% and 24.31% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the company has gained 14.92%. The stock is trading at a PE ratio of 34.68 and a dividend yield of 3.44%.

Conversely, shares of CNOOC have been on an upward swing and have been performing well on the markets. On Monday, September 12, 2016, CNOOC's shares are up 1.78%, finishing the day at $123.25 with volume of 156.31 thousand shares exchanging hands by the close of the trading session. For the last one month and six months, the stock has gained 2.18% and 9.78%. Furthermore, on a year to date basis, the stock gained 22.82%. Shares of the company have a dividend yield of 3.87%.

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Source: ACCESSWIRE Investor Awareness (September 13, 2016 - 9:16 AM EDT)

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