Earnings

[Gator]

PORT MORESBY, Papua New Guinea and HOUSTON, Nov. 11, 2013 /PRNewswire/ -- InterOil Corporation (NYSE:IOC) (POMSoX:IOC) today announced financial and operating results for the third quarter ended September 30, 2013.

Key Points

• Net loss for the quarter of $6.3 million compared to a profit of $5.3 million for the same period in 2012
  
  • $250 million secured syndicated capital expenditure facility led by Credit Suisse AG
    
    • Continuing focus on streamlining business units and reducing costs
      
      • Negotiations with a number of supermajors relating to the monetization of the Elk and Antelope resource in final stages; announcement expected by year end
        
        • Initiated seismic data acquisition and drilling activity including a well in each of the Company's three Petroleum Prospecting Licenses (PPLs)

        Commenting on the results, InterOil chief executive Dr Michael Hession said, "The Company is delivering on its commitments to strengthen its financial position, complete a monetization transaction and resume exploration".

        "We are pleased to have the support of a high calibre syndicate of international banks to bridge our funding requirements between the execution of a sales and purchase agreement (SPA) and completing the monetization transaction".

        "The management team is focused on the key drivers that create value for shareholders. We have identified priority objectives within our core business streams which are appropriately staffed and funded".

        "Negotiations with a number of supermajors regarding the monetization of our gas resources are in the final stages. We expect to be able to make an announcement on the selection of our development partner before year end".

        "Ongoing exploration activity is one of InterOil's four core business units in Papua New Guinea, the others being midstream refining, downstream wholesale and retail petroleum distribution and the monetization of its gas resources."

        "InterOil supports the communities in which it operates. We are proud to work with the people and Government of Papua New Guinea as we commit to further development that will provide revenue and employment for the PNG economy."

[Gator]

Group Financial Results InterOil's recorded net loss for the quarter ended September 30, 2013 was $6.3 million, compared with a profit of $5.3 million for the same period in 2012. The $11.6 million decrease in net profit was mainly due to an $8.6 million increase in foreign exchange losses and a $7.6 million decrease in gross margin on account of a relatively stable crude and product prices movement during the current quarter as compared to increases in the same quarter of 2012. EBITDA for the third quarter of 2013 was $9.9 million, a decrease of $9.1 million compared to EBITDA of $19.0 million for the same period in 2012. Total revenues decreased by $21.6 million to $305.2 million, primarily due to lower sales volumes during the quarter. The total volume of all products sold was 2.0 million barrels, compared with 2.3 million barrels in the same quarter of 2012, mainly due to the timing of refinery exports in the third quarter of 2012. Business Segment Results Upstream – InterOil today announced a seismic data acquisition and drilling program which will involve three initial wells in the Company's Petroleum Prospecting Licenses (PPLs) in Papua New Guinea. The work program consists of six wells (1 well each in our prospecting licenses PPL236, 237 and 238, 2 wells in PRL15, and 1 well in APRL39), plus a seismic program in Triceratops east, south west Antelope and a new prospect Bobcat. The Wahoo-1 well, the first well in the multi-well exploration drilling plan, is planned to be drilled utilizing InterOil's exploration Rig#3 in PPL 236. The Bob Cat-1 exploration well will be drilled utilising InterOil Rig#2. The proposed Bob Cat-1 location is in PPL 238 and is a target defined by an aero-magnetic, gravity and seismic data, and is on trend between the Antelope and Triceratops fields. During the previous quarter previous seismic data obtained from DPE archives over the Raptor prospect in PPL237 was reprocessed. The Company has contracted an additional rig to drill the Raptor-1 well with its exploration partner Pacific Rubiales Energy (PRE). The Raptor-1 well in PPL 237 is an exploration well delineated by aero-magnetic and gravity data as well as seismic data and is planned to commence drilling during the first quarter next year. Additional wells and seismic data acquisition will be conducted in PRL15 and Triceratops (APRL 39) to support development planning and to meet licence obligations. Beyond this InterOil intends to maintain an active work program across the portfolio of exploration targets in our core licences in the highly prospective Eastern Papuan Basin. The Upstream segment realized a net loss of $16.2 million in the quarter. The increased loss of $5.3 million over the same period in 2012 was mainly due to a decrease in gain on oil and gas properties due to the recognition of the sale of interest in PPL 237 to PRE in the prior year's comparable quarter, reduced revenue from civil works recovery and higher interest expense on inter-company loan balances. Midstream Refining – Total refinery throughput for the quarter ended September 30, 2013 was 26,786 barrels per operating day, compared with 23,980 barrels per operating day during the quarter ended September 30, 2012. Capacity utilization of the refinery for the quarter ended September 30, 2013, based on 36,500 barrels per day operating capacity, was 65% compared with 61% for quarter ended September 30, 2012. During the quarters ended September 30, 2013 and 2012, our refinery was shut down for 11 day and 9 days, respectively, for general maintenance activities.

[Optionray]

PORT MORESBY, Papua New Guinea and HOUSTON, Nov. 11, 2013 /PRNewswire/ -- InterOil Corporation (NYSE:IOC) (POMSoX:IOC) today announced financial and operating results for the third quarter ended September 30, 2013.

Key Points

• Net loss for the quarter of $6.3 million compared to a profit of $5.3 million for the same period in 2012
  
  • $250 million secured syndicated capital expenditure facility led by Credit Suisse AG
    
    • Continuing focus on streamlining business units and reducing costs
      
      • Negotiations with a number of supermajors relating to the monetization of the Elk and Antelope resource in final stages; announcement expected by year end
        
        • Initiated seismic data acquisition and drilling activity including a well in each of the Company's three Petroleum Prospecting Licenses (PPLs)

        Commenting on the results, InterOil chief executive Dr Michael Hession said, "The Company is delivering on its commitments to strengthen its financial position, complete a monetization transaction and resume exploration".

        "We are pleased to have the support of a high calibre syndicate of international banks to bridge our funding requirements between the execution of a sales and purchase agreement (SPA) and completing the monetization transaction".

        "The management team is focused on the key drivers that create value for shareholders. We have identified priority objectives within our core business streams which are appropriately staffed and funded".

        "Negotiations with a number of supermajors regarding the monetization of our gas resources are in the final stages. We expect to be able to make an announcement on the selection of our development partner before year end".

        "Ongoing exploration activity is one of InterOil's four core business units in Papua New Guinea, the others being midstream refining, downstream wholesale and retail petroleum distribution and the monetization of its gas resources."

        "InterOil supports the communities in which it operates. We are proud to work with the people and Government of Papua New Guinea as we commit to further development that will provide revenue and employment for the PNG economy."

Sounds like multiple deals, and I sure wouldn't think Hesson would stick his neck out there if he was pretty confident.  Year end is shaping up nicely!

[Palm]

As good are
1. The announced drilling plans; Raptor, Wahoo, new Bobcat (between EA and Tri) and other prospects to meet license requirements.
2. With the pull-back on cash expenditures their unrestricted cash is of course down, but nowhere near what fear-mongers were projecting. Hession has come in and taken hold of the reins.

[ArtM72]

That is quite a drilling plan announcement. Put together with the bridge loans and we have a very positive outlook. The negative? It will be partner announcement before the end of the year. Been there, done that already. I'd have been much, much happier to see PSA announcements by that time.

[Palm]

Upstream drilling is pretty comprehensive and several mentions of meeting license requirements:

"InterOil today announced a seismic data acquisition and drilling program which will involve three initial wells in the Company’s Petroleum Prospecting Licenses (PPLs) in Papua New Guinea. The work program consists of six wells (1 well each in our prospecting licenses PPL236, 237 and 238, 2 wells in PRL15, and 1 well in APRL39), plus a seismic program in Triceratops east, south west Antelope and a new prospect Bobcat.

The Wahoo-1 well, the first well in the multi-well exploration drilling plan, is planned to be drilled utilizing InterOil’s exploration Rig#3 in PPL 236. The Bob Cat-1 exploration well will be drilled utilising InterOil Rig#2. The proposed Bob Cat-1 location is in PPL 238 and is a target defined by an aero-magnetic, gravity and seismic data, and is on trend between the Antelope and Triceratops fields.

During the previous quarter previous seismic data obtained from DPE archives over the Raptor prospect in PPL237 was reprocessed. The Company has contracted an additional rig to drill the Raptor-1 well with its exploration partner Pacific Rubiales Energy (PRE). The Raptor-1 well in PPL 237 is an exploration well delineated by aero-magnetic and gravity data as well as seismic data and is planned to commence drilling during the first quarter next year.

Additional wells and seismic data acquisition will be conducted in PRL15 and Triceratops (APRL 39) to support development planning and to meet licence obligations. Beyond this InterOil intends to maintain an active work program across the portfolio of exploration targets in our core licences in the highly prospective Eastern Papuan Basin.

The Upstream segment realized a net loss of $16.2 million in the quarter. The increased loss of $5.3 million over the same period in 2012 was mainly due to a decrease in gain on oil and gas properties due to the recognition of the sale of interest in PPL 237 to PRE in the prior year’s comparable quarter, reduced revenue from civil works recovery and higher interest expense on inter-company loan balances."

[TxPm]

Anyone that expected a partner announcement today hasnt been following IOC for long enough. Personally I am quite pleased with todays report. Partner announcement by EOY should boost the pps considerably over the next few weeks. Drilling plan and financing addresses two of biggest issues I have heard from people. Cash should no longer be an issue for the firm as we have financing in place now to hold us over until the SD. The new drilling plan has IOC doing what IOC does best and that is finding the gas & hopefully soon Oil. 2014 should turn out to be the year IOC's pps finally begins to trade at fair value

[admin]

Anyone that expected a partner announcement today hasnt been following IOC for long enough. Personally I am quite pleased with todays report. Partner announcement by EOY should boost the pps considerably over the next few weeks. Drilling plan and financing addresses two of biggest issues I have heard from people. Cash should no longer be an issue for the firm as we have financing in place now to hold us over until the SD. The new drilling plan has IOC doing what IOC does best and that is finding the gas & hopefully soon Oil. 2014 should turn out to be the year IOC's pps finally begins to trade at fair value

That sums it up nicely, Tx

[Gator]

As good are 1. The announced drilling plans; Raptor, Wahoo, new Bobcat (between EA and Tri) and other prospects to meet license requirements. 2. With the pull-back on cash expenditures their unrestricted cash is of course down, but nowhere near what fear-mongers were projecting. Hession has come in and taken hold of the reins.

Cash is down and they used almost all of the August secured loan available for drilling ($34.6 of $37.5 Million), but the entire $80 million non-recourse and $87.7 of the working capital loan is available.  They will not run out of cash before the monetization of E/A announcment by year end.

[Palm]

From the MD&A, a few more details:

• On July 16, 2013, we entered into a Settlement and Termination Deed with Mitsui following the

termination of the CSP JVOA on February 28, 2013. In accordance with the deed, we repaid Mitsui

$34.4 million in relation to the cancellation of option to acquire interests in the Elk and Antelope fields,

and Mitsui’s share of capital expenditure incurred on the condensate stripping facilities, the unsecured

loan, together with interest thereon. The facility has now been fully repaid and all security provided to

Mitsui discharged.

• The work program undertaken on behalf of OSE in the combined seismic over their PPL338 and our

PPL237 licenses was completed. OSE has requested additional lines be acquired on their behalf in the

coming quarter. We will continue to act as the operator of the work program under a data sharing and

joint processing arrangement. During the quarter, previous seismic data obtained from DPE archives

over the Raptor prospect in PPL237 was reprocessed. With advances in technology the reprocessed

data will provide a better understanding of the prospectively of the acreage and identify well locations.

• Subsequent to quarter end, a multi-well drilling and seismic work program and budget was approved by

our Board. The work program consists of six wells (1 well each in our prospecting licenses PPL236, 237

and 238, 2 appraisal wells in PRL15, and 1 well in APRL39), plus a seismic program in Triceratops east,

southwest Antelope and a new prospect Bobcat located on PPL238.

• Subsequent to quarter end, on October 24, 2013, we entered into an Exchange Agreement with PNGEI

to buyback their 4.25% indirect participation interest percentage under the Amended Indirect

Participation Interest Agreement dated May 12, 2004, including their interest and rights to future

distributions in exchange for 100,000 of our common shares.

• Subsequent to quarter end, on November 11, 2013, we entered into a $250.0 million secured syndicated

capital expenditure facility led by Credit Suisse AG related to the approved seismic data acquisition and

drilling program. In addition to Credit Suisse, the participating lenders are Commonwealth Bank of

Australia (“CBA&rdquo, Australia and New Zealand Banking Group Limited (“ANZ&rdquo, UBS AG, Macquarie

Group Limited (“Macquarie&rdquo, Bank South Pacific Limited (“BSP&rdquo, BNP Paribas and Westpac Bank PNG

Limited (“Westpac&rdquo. The facility is secured by our existing Upstream and Corporate entities. The

facility bears interest at LIBOR plus 5.5% margin on the drawn amount for the first six months. After the

first six month period the margin escalates 2.0% every two months to a maximum of 11.5% in the last

two months of the 12-month term. The facility is payable in full (within a certain timeframe) upon any sale

or disposal of our interest in the Elk and Antelope fields.

• On September 10, 2013, we sold our investment in FLEX LNG shares for $7.8 million, resulting in a gain

on the investment for the nine months ended September 30, 2013 of $3.7 million

As at September 30, 2013, we had cash, cash equivalents, and restricted cash of $79.3 million (September 30,

2012 – $96.7 million), of which $38.9 million (September 30, 2012 - $39.6 million) was restricted. Of the total

restricted cash of $38.9 million, $27.3 million (September 30, 2012 - $33.6 million) was restricted pursuant to the

BNP working capital facility utilization requirements, $11.2 million (September 30, 2012 – $5.6 million) was

restricted as a cash deposit on the secured loans (ANZ, BSP and BNP syndicated secured loan facility as at

September 30, 2013, and OPIC facility as at September 30, 2012), and the balance was made up of a cash

deposit on office premises together with term deposits on our PPLs."