InterOil Corp. said on Nov. 4 that an appeals court in Canada overturned approval of the natural gas producer's $2.5 billion sale to ExxonMobil Corp. (NYSE: XOM), throwing the deal's viability in doubt.

The Supreme Court of Yukon ruled for Phil Mulacek, InterOil's founder and second-largest shareholder, who had objected to the all-stock deal announced in July.

The Supreme Court approved the deal in early October, but Mulacek filed an objection saying it did not properly remunerate InterOil shareholders.

InterOil is incorporated in Yukon, Canada, with operations in Papua New Guinea and headquarters in Singapore.

An InterOil representative said on Nov. 4 that Canadian approval was all that remained to close the deal.

ExxonMobil representatives were not immediately available for comment. A representative for Mulacek was not immediately available for comment.

InterOil said it still believed that the ExxonMobil deal represented "compelling value" for its shareholders and was considering options to close the deal.

Shares of InterOil fell 5.8% to close at $45.75, and ExxonMobil edged down 0.1% to $83.57.

InterOil owns a 36.5% stake in Papua New Guinea's Elk-Antelope gas field, which is operated by Total.

The acquisition would give ExxonMobil interests in six licenses in Papua New Guinea covering about four million acres and help the company supply LNG to Asian markets.