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Image courtesy of InterOil.

Oil Search said Thursday that it will not submit a new bid for InterOil after ExxonMobil made a superior offer earlier this week.

Australia-based Oil Search said that it does not intend to submit a revised offer for InterOil under its arrangement agreement with InterOil.

Oil Search was notified on July 18 that InterOil had received an unsolicited “superior proposal” from Exxon.

Exxon has offered InterOil a fixed price of $45 per share to be paid in ExxonMobil shares.

Exxon has also offered a contingent resource payment of $0.90 per million cubic feet equivalent of Elk-Antelope 2C resources in excess of 6.2 trillion cubic feet equivalent, subject to a cap of 10 tcfe.

The contingent resource payment will be payable in cash at resource certification and will not be transferable or listed on an exchange.

Oil Search had offered 8.05 of its own shares for every InterOil share, with each InterOil share being valued at $42.66.

InterOil shareholders would have also received a contingent value right for each InterOil share that will pay $6.044 in cash per InterOil share for each 1 tcfe above 6.2 tcfe of certified 2C resources at Elk-Antelope.

InterOil is an independent oil and gas business with a sole focus on Papua New Guinea.

The company’s assets include the Elk-Antelope, one of Asia’s largest undeveloped gas fields.

Oil Search currently holds a 22.835 percent interest in PRL 15 where the Elk-Antelope gas discoveries are located.

Oil Search said it has reached a mutual agreement with France’s Total to terminate their memorandum of understanding if InterOil decides to enter into binding agreement with ExxonMobil.

If InterOil terminates the agreement with Oil Search, Oil Search will receive a $60 million break fee.

Total will be entitled to 20 percent of the fee.

Oil Search said the break fee will “more than cover the costs associated with the offer.”

“The bid by ExxonMobil clearly underscores the merits of our offer for InterOil and highlights both the quality of our LNG assets in PNG and the potential value that would be created by cooperation between PNG’s two world class LNG projects,” Oil Search’s Managing Director Peter Botten.