$75 Mill for Exploration

[Tree]

InterOil Continues Negotiations With ExxonMobil on Gas Monetization

ANNOUNCES $75 MILLION SECURED LOAN FACILITY FOR FURTHER EXPLORATION ACTIVITIES

PORT MORESBY, Papua New Guinea and HOUSTON, Aug. 19, 2013 /PRNewswire/ -- InterOil Corporation (IOC) (IOC) today announced that negotiations with ExxonMobil Papua New Guinea Ltd. (EMPNG), a subsidiary of ExxonMobil (XOM), relating to the development of Petroleum Retention License 15, were ongoing notwithstanding the lapse of an exclusivity arrangement.

InterOil will continue to work with EMPNG with the aim of accelerating the monetisation of its gas resources on terms that will benefit all stakeholders including Papua New Guinea.

InterOil today also announced it had finalized a $75 million secured loan facility to accelerate its exploration and drilling program.

InterOil's Executive Vice President of Corporate Development and Government Relations, Keli Taureka, has discussed the latest developments with the Government of Papua New Guinea and the Governor of the Gulf Province. "All of InterOil's businesses and assets are in PNG and we remain fully aligned with PNG's ambitions to develop its natural resources.  InterOil makes a significant contribution to PNG as a major employer and provider of fuel and we value our strong relations with the Government and local communities," Mr Taureka said.

$75 Million Loan Facility
InterOil today said that the Company and its subsidiaries, InterOil Products Limited (Downstream entity) and certain Upstream Entities, have entered into a one year $75 million equivalent combined secured loan facility with Westpac Bank PNG Limited (Westpac) and Bank South Pacific Limited (BSP) to be drawn in tranches, either USD and/or Papua New Guinea Kina (PGK), subject to standard closing conditions.

Borrowings under the facility will be used for exploration and drilling activities with $37.5 million funding to start immediately, and a further $37.5 million upon the execution of an agreement in relation to monetization of the Elk and Antelope resource. The principal repayment will be made on the earlier of, the first resource payment or 12 months from the first drawdown.

Existing downstream working capital facilities with Westpac and BSP totalling K140.0 million have been underutilized, due to the downstream division's prudent working capital management initiatives and strong liquidity. As such, all parties have agreed to channel existing downstream approved limits of K45.0 million to this secured loan facility. The downstream working capital facility will be kept.at the remaining K95.0 million.

Both facilities will be shared between Westpac and BSP, secured against downstream assets and undertakings, IOC parent guarantee, and guarantees from certain Upstream entities.

In announcing its 2013 second quarter results on July 13, the Company said that it would build on its success by seeking additional exploration partners.

Collin Visaggio, InterOil's CFO remarked, "We are pleased to have strengthened our existing relationship with BSP, Papua New Guinea's largest bank, and Westpac, one of the region's largest lenders. "

Greg Pawson, Westpac Pacific General Manager remarked "Westpac has been part of the fabric of Papua New Guinea since 1910. For over a century we have maintained a strong interest in supporting the economic growth of the country. It follows that we're pleased to support InterOil's exploration efforts in PNG."

Robin Fleming, BSP Group CEO commented "following on from our Co-Lead Arranger role in the midstream term loan syndication, BSP is delighted to support InterOil's upstream exploration activities."  Mr Fleming also highlighted BSP's commitment to both InterOil and the Gulf Province with the recent announcement of BSP's agreement to open a Rural Branch in Kerema.  Both Mr Visaggio and Mr Fleming believe these activities will strongly support economic development across the Province.

[Palm]

You don't do something like this without a high % chance that you have resource payments coming in.

[Tree]

You don't do something like this without a high % chance that you have resource payments coming in.

You also don't lend $ without a high % of resource payments coming in, and lookie like the bankies have a handle on that.

Borrowings under the facility will be used for exploration and drilling activities with $37.5 million funding to start immediately, and a further $37.5 million upon the execution of an agreement in relation to monetization of the Elk and Antelope resource. The principal repayment will be made on the earlier of, the first resource payment or 12 months from the first drawdown.

Borrowings under the facility will be used for exploration and drilling activities with $37.5 million funding to start immediately, and a further $37.5 million upon the execution of an agreement in relation to monetization of the Elk and Antelope resource. The principal repayment will be made on the earlier of, the first resource payment or 12 months from the first drawdown.

[TxPm]

"Borrowings under the facility will be used for exploration and drilling activities with $37.5 million funding to start immediately, and a further $37.5 million upon the execution of an agreement in relation to monetization of the Elk and Antelope resource. The principal repayment will be made on the earlier of, the first resource payment or 12 months from the first drawdown."

So let me get this straight we are using 1/2 this money immediately for drilling then we get another 1/2 when the deal closes yet we have to start making payements in 13 months at the latest?

In finance we call this a bridge loan. Wonder what we are bridging

[petrengr1]

InterOil Continues Negotiations With ExxonMobil on Gas Monetization

ANNOUNCES $75 MILLION SECURED LOAN FACILITY FOR FURTHER EXPLORATION ACTIVITIES

PORT MORESBY, Papua New Guinea and HOUSTON, Aug. 19, 2013 /PRNewswire/ -- InterOil Corporation (IOC) (IOC) today announced that negotiations with ExxonMobil Papua New Guinea Ltd. (EMPNG), a subsidiary of ExxonMobil (XOM), relating to the development of Petroleum Retention License 15, were ongoing notwithstanding the lapse of an exclusivity arrangement.

InterOil will continue to work with EMPNG with the aim of accelerating the monetisation of its gas resources on terms that will benefit all stakeholders including Papua New Guinea.

InterOil today also announced it had finalized a $75 million secured loan facility to accelerate its exploration and drilling program.

InterOil's Executive Vice President of Corporate Development and Government Relations, Keli Taureka, has discussed the latest developments with the Government of Papua New Guinea and the Governor of the Gulf Province. "All of InterOil's businesses and assets are in PNG and we remain fully aligned with PNG's ambitions to develop its natural resources.  InterOil makes a significant contribution to PNG as a major employer and provider of fuel and we value our strong relations with the Government and local communities," Mr Taureka said.

$75 Million Loan Facility
InterOil today said that the Company and its subsidiaries, InterOil Products Limited (Downstream entity) and certain Upstream Entities, have entered into a one year $75 million equivalent combined secured loan facility with Westpac Bank PNG Limited (Westpac) and Bank South Pacific Limited (BSP) to be drawn in tranches, either USD and/or Papua New Guinea Kina (PGK), subject to standard closing conditions.

Borrowings under the facility will be used for exploration and drilling activities with $37.5 million funding to start immediately, and a further $37.5 million upon the execution of an agreement in relation to monetization of the Elk and Antelope resource. The principal repayment will be made on the earlier of, the first resource payment or 12 months from the first drawdown.

Existing downstream working capital facilities with Westpac and BSP totalling K140.0 million have been underutilized, due to the downstream division's prudent working capital management initiatives and strong liquidity. As such, all parties have agreed to channel existing downstream approved limits of K45.0 million to this secured loan facility. The downstream working capital facility will be kept.at the remaining K95.0 million.

Both facilities will be shared between Westpac and BSP, secured against downstream assets and undertakings, IOC parent guarantee, and guarantees from certain Upstream entities.

In announcing its 2013 second quarter results on July 13, the Company said that it would build on its success by seeking additional exploration partners.

Collin Visaggio, InterOil's CFO remarked, "We are pleased to have strengthened our existing relationship with BSP, Papua New Guinea's largest bank, and Westpac, one of the region's largest lenders. "

Greg Pawson, Westpac Pacific General Manager remarked "Westpac has been part of the fabric of Papua New Guinea since 1910. For over a century we have maintained a strong interest in supporting the economic growth of the country. It follows that we're pleased to support InterOil's exploration efforts in PNG."

Robin Fleming, BSP Group CEO commented "following on from our Co-Lead Arranger role in the midstream term loan syndication, BSP is delighted to support InterOil's upstream exploration activities."  Mr Fleming also highlighted BSP's commitment to both InterOil and the Gulf Province with the recent announcement of BSP's agreement to open a Rural Branch in Kerema.  Both Mr Visaggio and Mr Fleming believe these activities will strongly support economic development across the Province.

It has now been “publicly” announced that the period of “exclusivity” has ended. Perhaps this is the signal that the front door is now open again. Might trigger some action if anyone else is interested.

[Crippsfl]

[quote='Palm' pid='27453' dateline='1376913678'] You don't do something like this without a high % chance that you have resource payments coming in.

You also don't lend $ without a high % of resource payments coming in, and lookie like the bankies have a handle on that.

Borrowings under the facility will be used for exploration and drilling activities with $37.5 million funding to start immediately, and a further $37.5 million upon the execution of an agreement in relation to monetization of the Elk and Antelope resource. The principal repayment will be made on the earlier of, the first resource payment or 12 months from the first drawdown.

Drill Baby, Drill

Borrowings under the facility will be used for exploration and drilling activities with $37.5 million funding to start immediately, and a further $37.5 million upon the execution of an agreement in relation to monetization of the Elk and Antelope resource. The principal repayment will be made on the earlier of, the first resource payment or 12 months from the first drawdown.

[cybersssss]

This is the clearest signal that I have ever seen that this deal is essentially done. What precludes them from signing on the dotted line at this point? Final deal terms? Government Approval?

It is amazing how the pps rockets down on a false, misinterpreted articel; yet when a release like this gets announced we barely trade in the premarket with a dollar up only.

[TxPm]

One other very important take away from the wording of this loan is it would appear that there will be a time gap btw "monotization" ie XOM/IOC announcement & first ressource payment which most likely occurs once the PNG govt signs off on the deal

Some had be speculating that these events would occur together

[Palm]

Tx, agree, but I also see this as part of the evolution of IOC under new leadership. IOC has always been criticized (and rightfully so), for it's very laborious process of drilling. Other companies have moved more quickly to prove up and that has given shorts leverage when they say that IOC must not have a viable resource ir they would be moving ahead. I think Collin V has done a great job fighting that by constantly speaking to the gearing ratio being so low traditionally and probably being a bit frustrated that the capacity has been there, but it has gone unused.

This is a high risk business and to survive a company must find, drill and monetize to keep going. Hession brings that attitude and I think with it the knowledge that it only increases intensity and quality of negotiations. They will not sit on their laurels anymore and I bet that brings with it closed deals and multiple venture partners.

[jft310]

Tx, agree, but I also see this as part of the evolution of IOC under new leadership. IOC has always been criticized (and rightfully so), for it's very laborious process of drilling. Other companies have moved more quickly to prove up and that has given shorts leverage when they say that IOC must not have a viable resource ir they would be moving ahead. I think Collin V has done a great job fighting that by constantly speaking to the gearing ratio being so low traditionally and probably being a bit frustrated that the capacity has been there, but it has gone unused. This is a high risk business and to survive a company must find, drill and monetize to keep going. Hession brings that attitude and I think with it the knowledge that it only increases intensity and quality of negotiations. They will not sit on their laurels anymore and I bet that brings with it closed deals and multiple venture partners.

IOC has a deal they can accept from someone. They don't need more NG.