Sonali Paul

MELBOURNE, (Reuters) –Oil Search shareholders will vote Dec. 7, after receiving approval from a Papua New Guinea judge and a mixed endorsement by an independent expert.

If the deal goes through, Oil Search’s A$8.8billion ($6.5billion) purchase would place Santos as the largest shareholder of Papua New Guinea’s most important resource project, PNG LNG. Exxon Mobil Corp (NYSE :).

Grant Samuel of Oil Search was appointed as an independent expert and stated that the merger would be in shareholders’ best interests. It would increase funding for its $3B Pikka oil project, Alaska, and will improve prospects for gas development in Papua New Guinea.

Santos’ proposal, which gives Oil Search shareholders 38.5% of the merged company, was not accurate. It stated that Oil Search’s true value is worth between 43%-44% of its total estimated value.

Grant Samuel stated in a report that was attached to the merger document to shareholders, “There is obviously a risk of the funding and other strategically beneficial benefits not fully compensating shareholders for this dilution.”

It was concluded however that Oil Search shareholders are likely to benefit from the agreement, considering the growing financial constraints faced by the industry as a result of the move away fossil fuels.

Peter Fredericson (Oil Search) was the acting chief executive officer. Fredericson said that the ratio took into consideration relative contributions from earnings.

Fredericson said that there would be a handful of people who will say there’s too much in the deal, but most shareholders we have spoken to recognize the strategic value of putting the businesses together.

Oil Search was valued at A$4.25 per share by Santos on Thursday, slightly higher than Oil Search’s closing price. This indicates that investors are expecting the deal will go through.

($1 = 1.3563 Australian dollars)