InterOil Corporation
NYSE : IOC

InterOil Corporation

August 05, 2009 22:08 ET

InterOil Announces Second Quarter 2009 Financial Results

CAIRNS, AUSTRALIA--(Marketwire - Aug. 5, 2009) - InterOil Corporation (NYSE:IOC) (POMSoX:IOC) announces financial results for the second quarter ending June 30, 2009. For the quarter, InterOil reported net income of $9.4 million (diluted $0.24 per share), $6.2 million less than the equivalent quarter in the prior year. Earnings before Interest, Taxes, Depreciation and Amortization(i) ("EBITDA") for the quarter totalled $17.9 million, a reduction of $9.5 million over 2008 second quarter EBITDA of $27.4 million. Second quarter 2008 results also included a $6.5 million gain on disposal of non-strategic oil and gas properties and a $3.7 million gain arising from an indirect participation interest investor's decision to waive its right to convert its working interest in certain wells into InterOil's shares.

Business Segment Results

During the quarter, InterOil's Midstream Refining segment generated a net profit of $9.6 million, compared with a net profit $11.3 million for the same quarter in 2008. Throughput averaged 21,574 barrels per day in the second quarter of 2009 versus 21,694 in the comparable period a year ago. Throughput per day has been calculated excluding shut down days. Capacity utilization, based on 36,500 barrels per day operating capacity was 39% for the quarter as compared to 30% in the same quarter of 2008. Premium margin distillates were 56% of production in the current quarter, down from 59% in the same period a year ago. Refining EBITDA in the quarter totalled $14.1 million, down from $16.3 million in the previous year as a result of lower distillate margins, which were partially offset by lower foreign exchange losses.

The Company's Midstream Liquefaction segment posted a net loss of $1.8 million for the quarter, which was our share of expenses incurred by the PNG LNG Inc. joint venture during the quarter to progress the development of the Liquefied Natural Gas (LNG) project in Papua New Guinea.

The Downstream segment derived a net profit of $1.7 million, compared with a net profit of $3.4 million in the second quarter of 2008. Downstream EBITDA in the quarter totalled $4.2 million compared to $7.9 million in the prior year period. During the 2009 second quarter refined product sales volumes totalled 140.8 million liters versus 128.3 million liters in the prior year period. Sales and operating revenues declined from $243.7 million in the previous year's quarter to $147.6 million, largely due to the decline in commodity prices. The decrease in net profit and EBITDA was due to lower gross margin achieved mainly due to the negative effect of import parity price movements as applied to the inventory sold during the period, partially offset by lower expenses and reduced stockholding fees.

During the second quarter, the Upstream business segment recorded a net loss of $2.4 million, down from a gain of $9.2 million in the comparable 2008 quarter. The 2008 quarter result included a $10.2 million gain on sale of oil and gas properties as compared to $1.1 million in the current quarter.

The following is a table containing the consolidated results for the eight quarters ended June 30, 2009 by business segment, and on a consolidated basis.



----------------------------------------------------------------------------
Quarters ended 2009 2008
($ thousands except per share data) Jun-30 Mar-31 Dec-31 Sep-30
----------------------------------------------------------------------------
Upstream 660 611 487 698
Midstream - Refining 114,347 145,523 194,617 216,750
Midstream - Liquefaction 2 5 23 35
Downstream 85,472 78,572 128,540 172,528
Corporate 8,640 7,753 9,591 8,415
Consolidation entries (60,625) (70,801) (114,691) (134,695)
----------------------------------------------------------------------------
Sales and operating revenues 148,496 161,663 218,567 263,731
----------------------------------------------------------------------------
Upstream (669) (470) (2,483) 231
Midstream - Refining 14,134 14,747 (13,976) 17,516
Midstream - Liquefaction (1,378) (2,360) (2,501) (1,570)
Downstream 4,150 3,241 (7,244) 610
Corporate 1,897 3,052 226 764
Consolidation entries (278) (7,286) (2,866) (736)
----------------------------------------------------------------------------
Earnings before interest, taxes,
depreciation and amortization (1) 17,856 10,924 (28,844) 16,815
----------------------------------------------------------------------------
Upstream (2,382) (2,134) (4,003) (1,039)
Midstream - Refining 9,624 10,349 (19,490) 12,660
Midstream - Liquefaction (1,765) (2,553) (2,597) (1,677)
Downstream 1,742 964 (5,901) (886)
Corporate (677) 350 (2,275) (1,759)
Consolidation entries 2,895 (4,333) 36 1,929
----------------------------------------------------------------------------
Net profit/(loss) per segment 9,437 2,643 (34,230) 9,228
----------------------------------------------------------------------------
Net profit/(loss) per share
(dollars)
----------------------------------------------------------------------------
Per Share - Basic 0.25 0.07 (0.96) 0.26
Per Share - Diluted 0.24 0.07 (0.96) 0.22
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Quarters ended 2008 2007
($ thousands except per share data) Jun-30 Mar-31 Dec-31 Sep-30
----------------------------------------------------------------------------
Upstream 895 618 579 1,176
Midstream - Refining 197,864 176,973 137,509 168,737
Midstream - Liquefaction 19 13 26 10
Downstream 140,467 116,048 118,495 102,786
Corporate 8,334 8,531 7,352 11,825
Consolidation entries (102,566) (109,767) (91,129) (94,430)
----------------------------------------------------------------------------
Sales and operating revenues 245,013 192,416 172,832 190,104
----------------------------------------------------------------------------
Upstream 10,164 (1,135) (3,128) (5,015)
Midstream - Refining 16,329 5,724 9,589 (1,332)
Midstream - Liquefaction (1,784) (1,636) (797) (4,104)
Downstream 7,893 4,529 3,627 3,301
Corporate (2,155) 1,796 2,145 6,248
Consolidation entries (3,092) (2,143) (4,540) (9,353)
----------------------------------------------------------------------------
Earnings before interest, taxes,
depreciation and amortization (1) 27,355 7,135 6,896 (10,255)
----------------------------------------------------------------------------
Upstream 9,189 (1,993) (3,736) (4,893)
Midstream - Refining 11,344 202 2,990 (12,199)
Midstream - Liquefaction (1,909) (1,728) (877) (4,157)
Downstream 3,383 2,197 670 (255)
Corporate (5,164) (1,390) (883) 3,578
Consolidation entries (1,240) 314 (877) 35
----------------------------------------------------------------------------
Net profit/(loss) per segment 15,603 (2,398) (2,713) (17,891)
----------------------------------------------------------------------------
Net profit/(loss) per share
(dollars)
----------------------------------------------------------------------------
Per Share - Basic 0.48 (0.08) (0.09) (0.60)
Per Share - Diluted 0.40 (0.08) (0.09) (0.60)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Earnings before interest, taxes, depreciation and amortization is a
non-GAAP measure and is reconciled to GAAP in the section to this
document entitled 'Non-GAAP Measures and Reconciliation'.


Liquidity and Capital Resources

As at June 30 2009, the Company's financial position has benefited significantly from the conversion of the $95 million 8% convertible subordinated debentures issued in May 2008 into common shares, and the completion of the $70.4 million registered direct stock offering completed in June 2009. These transactions improved our Debt-To-Capital Ratio (Long term Debt/(Shareholders' equity + Long term Debt) to 13% at June 30, 2009, substantially down from 43% at the same time in 2008.



Summary of Debt Facilities

----------------------------------------------------------------------------
Balance
outstanding
Organization Facility June 30, 2009 Maturity date
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Overseas Private Investment
Corp. secured $ 58,000,000 $ 58,000,000 December 2015
Unsecured 8% convertible
debentures $ 95,000,000(2) $ 0 Fully Converted
BNP Paribas working capital
facility $ 190,000,000 $ 0(1) August 2009
Westpac working capital
facility $ 27,200,000 $ 3,962,238 October 2011
BSP working capital
facility $ 23,800,000 $ 0 August 2009
----------------------------------------------------------------------------
(1) Excludes letters of credit totalling US$72.6 million

(2) Initial debenture issue of $95 million, was fully converted in June 2009


At June 30, 2009 InterOil held cash, cash equivalents and restricted cash of $117.7 million (June 2008 - $55.2 million), of which $21.4 million (June 2008 - $26.4 million) was restricted under the BNP Paribas working capital facility and OPIC debt reserve. Our net cash from operating activities for the quarter were $65.1 million, compared with an outflow of $32.6 million for the quarter ended June 30, 2008. The improved cash flows from operations were mainly due to reduced working capital requirements resulting from decreased feedstock price environment as compared to prior year.

Subsequent Events

On July 27, 2009, the Company announced that drilling has commenced on the Antelope-2 appraisal well, located approximately 2.2 miles (3.5 km) south of the Antelope-1 well in Petroleum Prospecting License 237 in Papua New Guinea. The planned total depth of the well is approximately 8,366 feet (2,550 meters) and is expected to take in the order of 100 days to drill. As at August 5, 2009, the Company has set 18 5/8 casing in the Antelope-2 well at 810 feet (247 meters) and is currently drilling ahead at 1,102 feet (336 meters).



InterOil Corporation

Consolidated Statement of Operations
(Unaudited, Expressed in United States dollars)

Quarter ended Six months ended
----------------------------------------------------------------------------
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
$ $ $ $
----------------------------------------------------------------------------
Revenue
Sales and operating
revenues 147,570,673 243,657,490 308,411,228 435,029,765
Interest 89,058 439,751 165,119 756,279
Other 836,246 916,110 1,581,957 1,641,404
----------------------------------------------------------------------------
148,495,977 245,013,351 310,158,304 437,427,448
----------------------------------------------------------------------------

Expenses
Cost of sales and
operating expenses 126,007,123 206,213,757 262,417,838 383,197,441
Administrative and
general expenses 7,454,273 11,038,893 14,617,065 16,296,642
Derivative
losses/(gains) 345,650 9,010,951 (931,060) 10,629,376
Legal and professional
fees 2,607,296 3,849,293 3,847,982 5,956,524
Exploration costs,
excluding exploration
impairment (note 11) 31,075 83,191 247,121 (154,077)
Exploration impairment
(note 11) - (14,052) - 11,279
Short term borrowing
costs 782,556 2,050,022 1,847,351 3,662,066
Long term borrowing
costs 2,861,819 4,083,348 6,432,965 8,485,202
Depreciation and
amortization 3,773,772 3,439,684 7,154,347 6,924,442
Gain on sale of oil
and gas properties
(note 11) (1,087,483) (10,245,533) (1,087,483) (10,245,533)
Foreign exchange
(gain)/loss (5,284,183) (3,484,037) 1,105,731 (4,784,214)
----------------------------------------------------------------------------
137,491,898 226,025,517 295,651,857 419,979,148
----------------------------------------------------------------------------

Income before income
taxes and
non-controlling
interest 11,004,079 18,987,834 14,506,447 17,448,300

Income taxes
Current (1,686,815) (3,183,469) (998,699) (4,025,799)
Future 122,731 (199,745) (1,422,203) (215,428)
----------------------------------------------------------------------------
(1,564,084) (3,383,214) (2,420,902) (4,241,227)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Income before
non-controlling interest 9,439,995 15,604,620 12,085,545 13,207,073
----------------------------------------------------------------------------

Non-controlling interest
(note 20) (1,925) (2,044) (3,995) (1,859)

----------------------------------------------------------------------------
Net income 9,438,070 15,602,576 12,081,550 13,205,214
----------------------------------------------------------------------------

Basic income per share
(note 26) 0.25 0.48 0.32 0.41
Diluted income per share
(note 26) 0.24 0.40 0.32 0.36
Weighted average number
of common shares
outstanding
Basic 38,244,238 32,720,492 37,216,877 31,873,424
Basic and diluted 38,946,516 38,629,556 37,724,806 36,781,249
----------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements


InterOil Corporation

Consolidated Statement of Cash Flows
(Unaudited, Expressed in United States dollars)

Quarter ended Six months ended
----------------------------------------------------------------------------
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
$ $ $ $
----------------------------------------------------------------------------
Cash flow s provided by
(used in):

Operating activities
Net profit 9,438,070 15,602,576 12,081,550 13,205,214
Adjustments for
non-cash and
non-operating
transactions
Non-controlling
interest 1,925 2,044 3,995 1,859
Depreciation and
amortization 3,773,772 3,439,684 7,154,347 6,924,442
Future income tax asset 683,427 76,531 1,012,884 47,721
Gain on sale of plant
and equipment - - - (16,250)
Gain on sale of
exploration assets (1,087,483) (10,245,533) (1,087,483) (10,245,533)
Amortization of
discount on
debentures liability 484,489 472,700 1,212,262 472,700
Amortization of
deferred financing
costs 55,986 64,320 111,972 148,428
Gain on unsettled hedge
contracts (283,900) (154,849) (208,800) (154,849)
Timing difference
between derivatives
recognised and settled (265,400) 6,824,675 15,074,050 6,554,700
Stock compensation
expense 1,892,759 1,536,178 3,317,212 2,241,425
Inventory revaluation (205,546) - - -
Non-cash interest on
secured loan facility - 605,868 - 2,189,907
Non-cash interest
settlement on
preference shares - 186,475 - 186,475
Non-cash interest
settlement on
debentures 2,352,084 - 2,352,084 -
Oil and gas properties
expensed 31,075 69,139 247,121 (142,798)
Loss/(gain) on
proportionate
consolidation of LNG
project - - 724,357 (236,666)
Unrealized foreign
exchange gain (1,967,988) (3,484,037) (3,901,133) (4,784,214)
Change in operating
working capital
Decrease/(increase) in
trade receivables 3,761,094 (34,394,001) 1,945,982 (58,665,410)
(Decrease)/increase in
unrealised hedge
gains (4,008,175) - 6,268,950 -
Decrease/(increase) in
other assets and
prepaid expenses 104,229 (3,053,296) 1,124,916 (398,947)
(Increase)/decrease in
inventories (34,020,246) 64,398,765 (27,306,167) 17,072,100
Increase/(decrease) in
accounts payable,
accrued liabilities
and income tax
payable 84,367,580 (74,607,339) 58,598,130 3,044,741
----------------------------------------------------------------------------
Net cash from/(used in)
operating activities 65,107,752 (32,660,100) 78,726,229 (22,554,955)
----------------------------------------------------------------------------

Investing activities
Expenditure on oil and
gas properties (20,054,923) (14,880,064) (43,675,787) (29,067,251)
Proceeds from IPI cash
calls 3,603,284 - 5,575,534 4,340,000
Expenditure on plant
and equipment (5,138,243) (1,565,972) (4,863,524) (2,570,013)
Proceeds received on
sale of assets - - - 312,500
Proceeds received on
sale of exploration
assets - 1,500,000 - 1,500,000
(Increase)/decrease in
restricted cash held as
security on borrowings (3,982,816) (6,013,771) 4,920,600 (3,993,941)
Change in non-cash
working capital
(Decrease)/increase in
accounts payable and
accrued liabilities (11,038,843) (924,866) (5,890,357) 1,565,416
----------------------------------------------------------------------------
Net cash used in
investing activities (36,611,541) (21,884,673) (43,933,534) (27,913,289)
----------------------------------------------------------------------------

Financing activities
Repayments of secured
loan (4,500,000) (4,500,000) (4,500,000) (4,500,000)
Repayments of bridging
facility, net of
transaction costs - (70,000,000) - (70,000,000)
Proceeds from PNG LNG
cash call - 875,500 - 3,502,000
Proceeds from Clarion
Finanz for Elk option
agreement - 4,500,000 3,577,288 4,500,000
Proceeds from Petromin
for Elk participation
agreement 1,000,000 - 4,435,000 -
(Repayments of)/proceeds
from working capital
facility (39,358,309) 41,032,787 (64,830,164) 7,557,193
Proceeds from issue of
common shares/conversion
of debt, net of
transaction costs 68,068,669 (421,496) 73,905,499 (421,496)
Proceeds from issue of
debentures, net of
transaction costs - 94,780,034 - 94,780,034
----------------------------------------------------------------------------
Net cash from financing
activities 25,210,360 66,266,825 12,587,623 35,417,731
----------------------------------------------------------------------------

Increase/(decrease) in
cash and cash
equivalents 53,706,571 11,722,052 47,380,318 (15,050,513)
Cash and cash
equivalents, beginning
of period 42,644,319 17,089,197 48,970,572 43,861,762
----------------------------------------------------------------------------
Cash and cash
equivalents, end of
period (note 5) 96,350,890 28,811,249 96,350,890 28,811,249
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements
See note 6 for non cash financing and investing activities


InterOil Corporation

Consolidated Statements of Shareholders' Equity
(Unaudited, Expressed in United States dollars)

Six months Six months
ended Year ended ended
----------------------------------------------------------------------------
June 30, December 31, June 30,
2009 2008 2008
$ $ $
----------------------------------------------------------------------------
Share capital

At beginning of period 373,904,356 259,324,133 259,324,133
Issue of capital stock
(note 21) 166,178,411 114,580,223 65,531,474
----------------------------------------------------------------------------
At end of period 540,082,767 373,904,356 324,855,607
----------------------------------------------------------------------------
Preference shares

At beginning of period - 6,842,688 6,842,688
Converted to common shares
(note 22) - (6,842,688) -
----------------------------------------------------------------------------
At end of period - - 6,842,688
----------------------------------------------------------------------------
8% subordinated debentures

At beginning of period 10,837,394 - -
Issue of debentures (note 23) - 13,036,434 -
Conversion to common shares
during the year (10,837,394) (2,199,040) 13,036,434
----------------------------------------------------------------------------
At end of period - 10,837,394 13,036,434
----------------------------------------------------------------------------
Contributed surplus

At beginning of period 15,621,767 10,337,548 10,337,548
Fair value of options
exercised transferred to
share capital (note 24) (1,581,105) (456,867) (66,495)
Stock compensation expense
(note 24) 3,317,211 5,741,086 2,241,425
----------------------------------------------------------------------------
At end of period 17,357,873 15,621,767 12,512,478
----------------------------------------------------------------------------
Warrants

At beginning of period
(note 25) 2,119,034 2,119,034 2,119,034
Movement for period - - -
----------------------------------------------------------------------------
At end of period 2,119,034 2,119,034 2,119,034
----------------------------------------------------------------------------
Accumulated Other
Comprehensive Income
Deferred hedge gain/(loss)
At beginning of period 18,012,500 - -
Deferred hedge movement for
period, net of tax (note 7) (10,200,850) 18,012,500 (3,487,049)
----------------------------------------------------------------------------
Deferred hedge gain/(loss) at
end of period 7,811,650 18,012,500 (3,487,049)
----------------------------------------------------------------------------
Foreign currency translation
reserve
At beginning of period 9,685,806 6,025,019 6,025,019
Foreign currency translation
movement for period, net of
tax (945,965) 3,660,787 5,262,965
----------------------------------------------------------------------------
Foreign currency translation
reserve at end of period 8,739,841 9,685,806 11,287,984
----------------------------------------------------------------------------
Accumulated other
comprehensive income at end of
period 16,551,491 27,698,306 7,800,935
----------------------------------------------------------------------------
Conversion options

At beginning of period 17,140,000 19,840,000 19,840,000
Movement for period (note 19) - (2,700,000) -
----------------------------------------------------------------------------
At end of period 17,140,000 17,140,000 19,840,000
----------------------------------------------------------------------------
Accumulated deficit

At beginning of period (220,186,930) (208,389,853) (208,389,853)
Net income/(loss) for period 12,081,550 (11,797,077) 13,205,214
----------------------------------------------------------------------------
At end of period (208,105,380) (220,186,930) (195,184,639)
----------------------------------------------------------------------------
Shareholders' equity at end of
period 385,145,785 227,133,927 191,822,537
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements


NON-GAAP EBITDA Reconciliation

Gross Margin is a non-GAAP measure and is 'sales and operating revenues'
less 'cost of sales and operating expenses'.

----------------------------------------------------------------------------
Consolidated - Operating
results
($ thousands, except per Quarter ended June 30, Six months ended June 30,
share data) 2009 2008 2009 2008
----------------------------------------------------------------------------
Sales and operating
revenues 147,571 243,657 308,411 435,030
Cost of sales and operating
expenses (126,007) (206,214) (262,418) (383,197)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gross Margin 21,564 37,443 45,993 51,833
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA, represents our net income/(loss) plus total interest expense (excluding amortization of debt issuance costs), income tax expense, depreciation and amortization expense. EBITDA is used by us to analyze operating performance. EBITDA does not have a standardized meaning prescribed by United States or Canadian generally accepted accounting principles and, therefore, may not be comparable with the calculation of similar measures for other companies. The items excluded from EBITDA are significant in assessing our operating results. Therefore, EBITDA should not be considered in isolation or as an alternative to net earnings, operating profit, net cash provided from operating activities and other measures of financial performance prepared in accordance with GAAP. Further, EBITDA is not a measure of cash flow under GAAP and should not be considered as such. For reconciliation of EBITDA to the net income (loss) under GAAP, refer to the following table.

The following table reconciles net income (loss), a GAAP measure, to EBITDA, a non-GAAP measure for each of the last eight quarters.



----------------------------------------------------------------------------
Quarters ended 2009 2008
($ thousands) Jun-30 Mar-31 Dec-31 Sep-30
----------------------------------------------------------------------------
Upstream (669) (470) (2,483) 231
Midstream - Refining 14,134 14,747 (13,976) 17,516
Midstream - Liquefaction (1,378) (2,360) (2,501) (1,570)
Downstream 4,150 3,241 (7,244) 610
Corporate 1,897 3,052 226 764
Consolidation Entries (278) (7,286) (2,866) (736)
----------------------------------------------------------------------------
Earnings before interest, taxes,
depreciation and amortization 17,856 10,924 (28,844) 16,815
----------------------------------------------------------------------------
Subtract:
----------------------------------------------------------------------------
Upstream (1,563) (1,552) (1,345) (1,137)
Midstream - Refining (1,709) (1,786) (2,771) (2,113)
Midstream - Liquefaction (333) (158) (65) (63)
Downstream (1,013) (1,142) (2,232) (885)
Corporate (1,600) (2,325) (2,320) (2,484)
Consolidation Entries 3,142 2,922 2,866 2,636
----------------------------------------------------------------------------
Interest expense (3,076) (4,041) (5,867) (4,046)
----------------------------------------------------------------------------
Upstream - - - -
Midstream - Refining - - - -
Midstream - Liquefaction (32) (12) (12) (25)
Downstream (733) (485) 4,297 82
Corporate (800) (359) (163) (21)
Consolidation Entries (2) (2) 4 (3)
----------------------------------------------------------------------------
Income taxes and non-
controlling interest (1,567) (858) 4,126 33
----------------------------------------------------------------------------
Upstream (150) (112) (175) (134)
Midstream - Refining (2,801) (2,611) (2,742) (2,742)
Midstream - Liquefaction (20) (20) (19) (19)
Downstream (662) (651) (722) (693)
Corporate (174) (18) (19) (18)
Consolidation Entries 32 32 32 32
----------------------------------------------------------------------------
Depreciation and amortisation (3,775) (3,380) (3,645) (3,574)
----------------------------------------------------------------------------
Upstream (2,382) (2,134) (4,003) (1,039)
Midstream - Refining 9,624 10,349 (19,490) 12,660
Midstream - Liquefaction (1,764) (2,551) (2,596) (1,677)
Downstream 1,742 964 (5,900) (886)
Corporate (677) 350 (2,276) (1,759)
Consolidation Entries 2,895 (4,333) 35 1,929
----------------------------------------------------------------------------
Net profit/(loss) per segment 9,438 2,645 (34,230) 9,228
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Quarters ended 2008 2007
($ thousands) Jun-30 Mar-31 Dec-31 Sep-30
----------------------------------------------------------------------------
Upstream 10,164 (1,135) (3,128) (5,015)
Midstream - Refining 16,329 5,724 9,589 (1,332)
Midstream - Liquefaction (1,784) (1,636) (797) (4,104)
Downstream 7,893 4,529 3,627 3,301
Corporate (2,155) 1,796 2,145 6,248
Consolidation Entries (3,092) (2,143) (4,540) (9,353)
----------------------------------------------------------------------------
Earnings before interest, taxes,
depreciation and amortization 27,355 7,135 6,896 -10,255
----------------------------------------------------------------------------
Subtract:
----------------------------------------------------------------------------
Upstream (841) (704) (474) (177)
Midstream - Refining (2,263) (2,761) (4,397) (8,155)
Midstream - Liquefaction (60) (53) (53) (53)
Downstream (715) (1,005) (1,145) (3,320)
Corporate (2,871) (3,091) (3,005) (2,870)
Consolidation Entries 1,823 2,425 3,629 9,353
----------------------------------------------------------------------------
Interest expense (4,927) (5,189) (5,445) (5,222)
----------------------------------------------------------------------------
Upstream - - - -
Midstream - Refining - - (44) 69
Midstream - Liquefaction (49) (24) (13) -
Downstream (3,213) (753) (1,112) 261
Corporate (122) (81) (11) 212
Consolidation Entries (2) 0 (1) 2
----------------------------------------------------------------------------
Income taxes and non-
controlling interest (3,386) (858) (1,181) 544
----------------------------------------------------------------------------
Upstream (135) (154) (134) 299
Midstream - Refining (2,723) (2,761) (2,158) (2,781)
Midstream - Liquefaction (16) (15) (15) -
Downstream (582) (573) (700) (497)
Corporate (16) (15) (12) (12)
Consolidation Entries 32 32 34 33
----------------------------------------------------------------------------
Depreciation and amortisation (3,440) (3,486) (2,985) (2,958)
----------------------------------------------------------------------------
Upstream 9,188 (1,993) (3,736) (4,893)
Midstream - Refining 11,345 201 2,990 (12,199)
Midstream - Liquefaction (1,910) (1,727) (878) (4,157)
Downstream 3,384 2,197 670 (254)
Corporate (5,164) (1,390) (882) 3,578
Consolidation Entries (1,240) 314 (877) 34
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Net profit/(loss) per segment 15,603 (2,398) (2,713) (17,891)
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COMPANY DESCRIPTION

InterOil Corporation is developing a vertically integrated energy business whose primary focus is Papua New Guinea and the surrounding region. InterOil's assets consist of petroleum licenses covering about 4.6 million acres, an oil refinery, and retail and commercial distribution facilities, all located in Papua New Guinea. In addition, InterOil is a shareholder in a joint venture established to construct an LNG plant on a site adjacent to InterOil's refinery in Port Moresby, Papua New Guinea.

InterOil's common shares trade on the NYSE in US dollars.

Cautionary Statements

This press release may include "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 the InterOil expects, believes or anticipates will or may occur in the future are forward-looking statements, including in particular statements concerning the development of a Liquefied natural Gas facility in Papua New Guinea, and drilling plans (including the Antelope-2 appraisal well). These statements are based on certain assumptions made by the Company based on its experience and perception of current conditions, expected future developments and other factors it believes are appropriate in the circumstances. No assurances can be given however, that these events will occur. Actual results will 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 with the Securities and Exchange Commission and SEDAR, including but not limited to those in the Company's Annual Report for the year ended December 31, 2008 on Form 40-F and its Annual Information Form for the year ended December 31, 2008.

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 and its Annual Information Form available on SEDAR at www.sedar.com, including in particular the risk factors discussed in the Company's filings.

Contact Information