High-flying energy company InterOil Corp. (NYSE: IOC) is getting another stock price boost this morning after revealing that the company is in “exclusive” negotiations with Exxon Mobil Corp. (NYSE: XOM) on development of licenses that InterOil holds on a vast tract of land in Papua New Guinea (PNG). In addition to its petroleum operations, Australia-based InterOil is involved in a joint venture with Pacific LNG Group Ltd. to build a liquefied natural gas (LNG) liquefaction facility in PNG, and it is this part of the company’s business that have spawned the talks with Exxon.

Exxon is currently constructing its own $19 billion LNG liquefaction project in PNG and is a obvious choice to take a stake in InterOil’s competing project, which almost certainly will cost more than the $6 billion original price tag. Exxon raised the cost of its LNG project in PNG by 21% just last year.

According to today’s announcement, InterOil and Pacific LNG Group are considering selling a stake of unspecified size in its 3.9 million licensed acres to Exxon. The price would be sufficient for the partners to build a second LNG facility (called a “train”). Exxon would also fund additional drilling.

InterOil has reached an agreement with the government of PNG that smooths over the rough spots in the relationship between the two, but the massive costs of building LNG facilities threatens to derail the firm’s plans unless it can find a deep-pocketed partner. Exxon certainly fits the bill there.

InterOil’s shares traded at around $10 at the beginning of 2009, and closed yesterday at just over $100, a new all-time high. The stock’s 52-week range is $50.90 to $106.44.

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