InterOil Corporation

InterOil Corporation

October 06, 2005 12:40 ET

InterOil Announces Arrival of New Drilling Rig in Papua New Guinea

TORONTO, CANADA--(CCNMatthews - Oct. 6, 2005) - InterOil Corporation (TSX:IOL) (AMEX:IOC) (POMSoX:IOC), a Canadian company with operations in Papua New Guinea, announced today that its newly engineered rig (InterOil Rig #2) has arrived in Port Moresby, Papua New Guinea. The rig is a 'double' and was engineered by Loadmaster Rig Systems of Houston, Texas, with a depth capacity of over 13,123 feet (4,000 meters). The rig has been designed as heli-portable to meet the requirements in Papua New Guinea for efficient helicopter transportation in jungle terrain to our drilling locations.

The rig will be commissioned at the refinery site for assembly and testing prior to its anticipated mobilization to our Elk exploration prospect. We currently intend to commence drilling on our Elk exploration prospect in November 2005.

"We are excited by the arrival of our new rig, at a time when there is a worldwide shortage of rig availability, that will provide us with great cost advantages going forward. This rig signals a key event in our exploration program allowing InterOil to kick off a world class drilling program for hydrocarbons in PNG. The rig has been engineered to meet the depth requirements of our key structures and we believe that it will shorten the drilling time between spud to target depth on our next six exploration wells," said Mr Phil Mulacek, CEO and Chairman.

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 Port Moresby Stock Exchange under the symbol IOC in Kina; For more information please see the InterOil website at:

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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