InterOil Corporation

InterOil Corporation

September 26, 2005 10:24 ET

InterOil Announces the Spudding of the Triceratops-1 Exploration Well in Papua New Guinea

TORONTO, ONTARIO--(CCNMatthews - Sept. 26, 2005) - InterOil Corporation (TSX:IOL) (AMEX:IOC), a Canadian company with operations in Papua New Guinea, announced today that drilling has commenced at the Triceratops - 1 exploration well. The Triceratops is InterOil's first exploration test in its PPL 237 License and is targeting the Puri fractured limestone reservoir in a fault separated closure, 2.2 miles (3.5 kilometers) north of the Bwata - 1 discovery well that was drilled in 1959. The Bwata - 1 well encountered 516 feet (157 meters) of gas pay in the Miocene Puri limestone and tested a maximum sustained flow of 29 mmscfgd through a 1/2 inch choke over four days, indicating an estimated open hole potential of 43 mmscfgd. The Bwata - 1 well also encountered gas shows in intra-Orubadi sandstone above the limestone and this formation will also be penetrated within closure at the Triceratops location.

The Triceratops - 1 well is being drilled into a culmination identified by airborne gravity and confirmed by a seismic survey concluded in May 2005. The well will be drilled to a measured depth of 7,050 feet (2,150 meters) and is expected to take 50 days to drill and log. The limestone section will be drilled directionally to insure intersection of the Puri limestone near its crest and remain in the hanging wall throughout the potential pay section.

The Triceratops - 1 well is the second well in our recently announced eight well drilling program to be drilled and follows the closing of a US$125 million drilling fund for exploration purposes announced early 2005.

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 dollar and on the American Stock Exchange under the symbol IOC in US dollars. 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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