InterOil Scales-Up PNG Operations

[cybersssss]

SINGAPORE, Jan. 29, 2014 /PRNewswire/ -- InterOil Corporation (NYSE: IOC; POMSoX: IOC) today announced the relocation of core functions from its 100-person office in Cairns, Australia, to support expanding operations in Papua New Guinea ("PNG". The Cairns office will close by the end of the year.

The decision to increase capacity in PNG comes as InterOil is finalizing an agreement with Total S.A. of France (CAC: TOT; NYSE: TOT) to develop a multi-billion dollar LNG project in PNG. Work continues on completing the Total agreement by the end of Q1 2014, including the buy-out of minority interests.

Putting Resources Where Impact is Greatest 
InterOil's Chief Executive Officer, Dr. Michael Hession, said the relocation of core functions would put resources where they are most needed. "PNG is our base, and where all our activities are, including exploration, refining, and distribution – and, of course, the LNG project. It makes sense to focus our workforce there," Dr. Hession said.

A New Drilling Campaign Begins 
InterOil has also begun a new round of drilling as part of its exploration activities across almost 4 million acres in PNG. The company plans to drill up to eight wells in the next 12-15 months. The drilling of each well is expected to take about three months. Currently, 1100 people are working in the field on the seismic program and preparation for drilling operations. The commencement of drilling operations will employ an additional 300 people.

Well	License	Progress
Wahoo 1  Exploration	PPL236	Camp commissioned on January 20, and fully functional Cellar and rig pad construction completed Mini camp in place Communications set up, and 80% complete Rig loads mobilising from Napa Napa to site; 25% complete Rig has two rig crews on site Rig-up operations 10% complete
Raptor 1  Exploration	PPL237	Water source 100% cleared Camp preparation 10% complete Cutting to grade 60% complete Rig started moving on January 14
Bobcat 1  Exploration	PPL238	Cutting to grade 100% complete Cellar construction 100% complete Pad construction 60% complete Drill camp construction 70% complete Rig move started on January 17 (five days ahead of schedule) and now 30% on site
Antelope 4  Appraisal	PRL15	Final site coordinates under review Well-site planning is underway Landowner agreement in place and signed

About InterOil
InterOil Corporation is a vertically integrated oil and gas company in Papua New Guinea. It has exploration interests over approximately 3.9 million acres (about 1.6 million hectares) and holds a major interest in the large Elk-Antelope gas field, which is being developed for a liquefied natural gas project with Total of France. InterOil owns and operates Papua New Guinea's only oil refinery, and operates an extensive petroleum retail and commercial distribution network. It has corporate headquarters in Singapore and its operations office in Port Moresby and employs more than 1000 people. InterOil is listed on the New York and Port Moresby stock exchanges. 

Investor contacts for InterOil
Wayne Andrews, Vice President Capital Markets	Meg LaSalle, Investor Relations Coordinator
Wayne.Andrews@InterOil.com	Meg.LaSalle@InterOil.com
Phone: +1-281-292-1800	Phone: +1-281-292-1800
Media contacts for InterOil
John Hurst, Cannings Corporate Communications
jhurst@cannings.net.au
Phone: +61 418 708 663

Forward Looking Statements 
This press release includes "forward-looking statements" as defined in United States federal and Canadian securities laws. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that InterOil expects, believes or anticipates will or may occur in the future are forward-looking statements, including in particular, the development the proposed Gulf LNG Project, the use of gas from the Elk and Antelope fields, the purchase of minority interests in PRL15, expectations regarding the ability to achieve a satisfactory conclusion or any conclusion of the partnering process and the timing of a conclusion of the partnering process, the proposed 8 well drilling program to be completed in 12-15 months, business prospects and strategies. These statements are based on our current beliefs as well as assumptions made by, and information currently available to us, including discussions with minority interest owners and closing of the proposed LNG partnering with Total SA. No assurances can be given however, that these events will occur. Actual results could differ, and the difference may be material and adverse to the Company and its shareholders. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause our actual results to differ materially from those implied or expressed by the forward-looking statements. Some of these factors include the risk factors discussed in the Company's filings with the Securities and Exchange Commission and on SEDAR, including but not limited to those in the Company's Annual Report for the year ended December 31, 2012 on Form 40-F and its Annual Information Form for the year ended December 31, 2012. In particular, there is no established market for natural gas or gas condensate in Papua New Guinea and no guarantee that gas or gas condensate from the Elk and Antelope fields will ultimately be able to be extracted and sold commercially. Investors are urged to consider closely the disclosure in the Company's Form 40-F, available from us at www.interoil.com or from the SEC at www.sec.gov and its Annual Information Form available on SEDAR at www.sedar.com.

[sfiaes]

Palm, thylacine-2 you can thank me later.

IPI results get pushed back to end of quarter with everything else.

Reminds me a lot of the "old" IOC.

[Libtardius Maximus]

Funny thing I have learned about email in my advancing years. It is simply this...whatever one's concerns are in the moment is the context of which the message will be interpreted.

[cybersssss]

I must have missed the part that says it is "pushed back to to end of quarter" Let the man do what he has to do. As long as the deal closed by the end of Q1.

The PR is a clear and concise summary of ongoing drilling preparation. Would be nice to get input from those in the industry about how far away is Wahoo drilling based on this report.

[ltinvest]

Sfiaes, I could not disagree with you more strongly. Your myopic fixation on the IPI/PAC deal timing is done with no knowledge whatsoever of what is actually transpiring. I, for one, advocated announcing the minority interest buy-out and Total closing and receipt of $613 million all at the same time. After all, it's all related. Nevertheless, those with knowledge of the negotiations have been nothing but positive. That is the fact. Hessions responsibility is to close the Total deal this Quarter. All parties involved will see that it happens!

[ltinvest]

Oh, and nice to see 1100 people on the ground in PNG working on seismics, site prep and rig transportation. 3 wells spudded this Q.....8 over the next 12-15 months....that's serious progress. Exciting days ahead followed by $$$BILLIONS in recertification payments next year. Important and meaningful.

[Palm]

Agree lt, negotiating is an art and as we said more than once the last couple of days the real deadline all along has been by the end of the 1st qtr. There was "hope" of getting it done by the end of Jan, but the real timetable is set around getting the deals closed in time that the gov is happy and will extend licenses and add Total to PRL 15 as necessary. Hession has stated that he spends more than 50% of his time in PNG and working with stakeholders. They know what is required and are working toward that end. Not something we think should be done with our very limited knowledge.

Per the presentation from Dec 6th, slide 7:
"- Completion of the transaction expected 1Q14
with minimal conditionality
− PNG Government approval
− Acquisition of Pacific LNG minority interests in
PRL15"

Pavel then decided in the CC to ask when they thought the IPI would be settled. Hession should have said, "Read the freaking presentation Pavel. It says, end of 1Q14. We have made progress and we hope that is done by the end of January BUT 1Q14." Mistake? Sure, but did that really change the 1Q14 date on the presentation? No. In some people's minds maybe, but not in reality.

[jft310]

I for one fully as in 100% understand the frustrations. Phil pumped us with promises he did not deliver on over and over again. I know Phil and can say with 100% authority that he was well intended and never lied to what he thought was true.
But this project was much bigger than him and many of his employees. Or he was above his pay grade and failed to deliver.
Today we have a deal with a Super Major with Billions on the horizon. Embrace the changes with LNG plant building experienced NEW
management team. We lost years with Phil and his miscues. Today Duma is 100% behind us and pushing for progress.
An LNG plant costs at least $13.5 Billion and to start construction requires certain boxes to be checked. Pavel states the price of IOCs NG will accrete from 79 cents to $2 per mcf as we make progress to cash flow from the new plant.

[johnwgrant]

OK - what is the "cellar" that they reference along with the rig pad ?

[Palm]

"Depending on the safety requirements and type of rig used to drill the well, it may be necessary to dig a ‘cellar’, which is approximately 2m square and 2m deep, to house a Blow Out Preventer (BOP) which is a safety mechanism which seals the well in case of a build up of pressure."