InterOil Corporation

InterOil Corporation

March 22, 2005 09:31 ET

InterOil Announces US$125 Million Drilling Exploration Program Funding Now Unconditional


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: INTEROIL CORPORATION

TSX SYMBOL: IOL
ASX., AMEX SYMBOL: IOC

MARCH 22, 2005 - 09:31 ET

InterOil Announces US$125 Million Drilling Exploration
Program Funding Now Unconditional

TORONTO, ONTARIO--(CCNMatthews - March 22, 2005) - InterOil Corporation
(TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC), a Canadian company with
operations in Papua New Guinea, today announced that it has received
waivers from the Australian Stock Exchange (ASX) and the Port Moresby
Stock Exchange (POMSoX). These waivers allow US$33 million of indirect
participation interest issued to be closed, as part of the US$125
million issuance of indirect participation interest to fund InterOil's
exploration program in Papua New Guinea. Investors holding the US$33
million of indirect participation interest may elect to convert all of
their interest in the second half of 2006, and upon conversion they
would receive 877,420 common shares.

In addition, the POMSoX has agreed to consider allowing InterOil to
maintain its PNG listing so long as it meets its home exchange listing
rules, by waiving any POMSoX rules that may conflict with rules of its
home exchange. As a result, InterOil will remain listed on the POMSoX
under the symbol IOC and will continue to trade in full common shares.

"We are pleased the POMSoX recognized the conflict that can arise from
being listed on numerous exchanges, and has allowed us to remain listed
on the POMSoX under our primary stock exchange listing requirements,"
stated Mr. Phil Mulacek, CEO and Chairman. "This will allow for
continued investment support within Papua New Guinea."

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.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would
be unlawful prior to the registration or publication under the security
laws of any such state. These securities have not been registered under
the Securities Act of 1933 and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements.

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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