InterOil Corporation

InterOil Corporation

January 10, 2005 18:12 ET

InterOil Announces Next Exploration Well to be Drilled


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: INTEROIL CORPORATION

TSX SYMBOL: IOL
ASX., AMEX SYMBOL: IOC

JANUARY 10, 2005 - 18:12 ET

InterOil Announces Next Exploration Well to be Drilled

TORONTO, ONTARIO--(CCNMatthews - Jan. 10, 2005) - InterOil Corporation
(TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC), a Canadian company with
operations in Papua New Guinea announced today that it intends to
commence the next well in its multi-well drilling program by the end of
the first quarter of 2005.

This well is on the Black Bass Prospect in Petroleum Prospecting License
(PPL) 236 in Papua New Guinea and is located approximately 100 miles
(160 kilometres) northwest of Port Moresby. The primary target is a
limestone reef which was identified by a recently conducted seismic
survey. The depth of this reef is estimated to be 3,937 feet (1,200m).

All necessary regulatory approvals have been received and the Company
has commenced preparation of the drill site. A drilling contract has
been executed and arrangements are being made to mobilize a drilling rig
to the site.

"We look forward to continuing our multi-well drilling program,
commencing with the Black Bass Prospect. This prospect is particularly
interesting to us from a strategic point of view because of its
accessibility by road and its proximity to InterOil's refinery at Port
Moresby," said Mr. Phil Mulacek, CEO of InterOil.

InterOil is developing a vertically integrated energy company whose
primary focus is Papua New Guinea and the surrounding region. Its assets
comprise an oil refinery, upstream petroleum exploration licenses, and
retail and commercial distribution assets. The majority of the refined
products from InterOil's refinery are secured by off-take contracts with
Shell and InterOil's wholly-owned subsidiary, InterOil Products Limited.
BP Singapore is InterOil's agent for crude oil supplied to the refinery.
InterOil is also undertaking an extensive petroleum exploration program
within its eight million acre license area located in Papua New Guinea.

InterOil's common shares trade on the Toronto Stock Exchange under the
symbol IOL in Canadian dollars; on the American Stock Exchange under the
symbol IOC in US dollars; and on the Australian Stock Exchange in CHESS
Depositary Interests in Australian dollars under the symbol IOC which
trade on a 10:1 basis to common shares. For more information please see
the InterOil website at: www.interoil.com.

Cautionary Statements

This press release contains forward-looking statements. All statements,
other than statements of historical facts, included in this release,
including without limitation, statements regarding our drilling plans,
business strategy, plans and objectives of management for future
operations and those statements preceded by, followed by or that
otherwise include the words "believe", "expects", "anticipates",
"intends", "estimates" or similar expressions or variations on such
expressions are forward-looking statements. The Company can give no
assurances that such forward-looking statements will prove to be
correct. Risks and uncertainties include, but are not limited to, the
existence of underground deposits of commercial quantities of oil and
gas; fluctuations in prices for oil and gas production; curtailments or
delays in development due to mechanical, operating, marketing or other
problems; capital expenditures that are either significantly higher or
lower than anticipated because the actual cost of identified projects
varied from original estimates; and from the number of exploration and
development opportunities being greater or fewer than currently
anticipated.

The Company currently has no reserves as defined under Canadian National
Instrument 51-101 reserve definitions. See the Company's filings with
the Canadian securities regulators for additional risks and information
about the Company's business.

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