InterOil Corporation
TSX : IOL
AMEX : IOC

InterOil Corporation

June 12, 2006 09:58 ET

InterOil Corporation Elk-1 ST-1 Well Drilling Report No. 6 12 June 2006

CALGARY, ALBERTA--(CCNMatthews - June 12, 2006) - InterOil Corporation (TSX:IOL) (AMEX:IOC) -



Elk Prospect

Type: Oil / Gas exploration well

Location: PPL 238, Eastern Papua Basin
145 degrees 08' 27.6" E; 007 degrees 06'
0.5" S

Current Status: Well is shut in while preparing to stabilize
well and subsequently perform a Drill Stem
Test to evaluate in more detail the gas that
flowed to surface while drilling at 5,558 feet
(1,694 meters). The DST will be performed in
the Marl/Puri Limestone open hole interval
from 5,381 feet to 5,558 feet (1,640m to
1,694m) to obtain detailed pressures, flow
rates, composition of the wet gas -
(methane-C1, ethane-C2, propane-C3, butane-C4
and pentane-C5,+) and other reservoir
parameters. Following the DST the intent is to
continue to drill ahead.

Activities since last Successfully squeezed and repaired the top of
report: the 7 inch liner with cement. Drilled out from
below 7 inch liner into the primary targeted
Marl/Puri Limestone formations from 5,381 feet
to 5,558 feet (1,640 meters to 1,694 meters).
Lost circulation at 5,558 feet (1,694 meters)
which induced wet gas into the wellbore. While
circulating out the gas kick, the well flowed
wet gas to surface at 2,000 psi through an
approximate 1 inch choke for 15 minutes to 30
minutes. The well was then shut in. The shut
in casing pressure is 3,150 psi.
(Other technical data will be posted on the
InterOil web site under Elk.)

Past Data: Drilled 12 1/4" hole to 4,075 feet
(1,242 meters). Set a cement plug from
approximately 2,766 to 2,560 feet
(840 to 780 meters) to establish the kickoff
point. Drilled 12 1/4" sidetrack hole to 3,478
feet (1,060 meters). Set 9 5/8" casing at
3,478 feet (1,060 meters). Ran 7" liner
(casing) to 5,393 feet (1,640 meters) and
cemented.

Planned Total Depth: Approximately 9,843 feet (3,000 meters).

Operator: InterOil subsidiary, SPI (208) Limited.

Prospect Description: This well is targeting the Puri/Mendi
fractured limestone.


Cautionary Statements

This press release contains forward-looking statements as defined in U.S. federal and Canadian securities laws. All statements, other than statements of historical facts, included in this release are forward-looking statements. Forward-looking statements include, without limitation, statements regarding our drilling plans, plans for expanding our business segments, business strategy, plans and objectives for future operations, future capital and other expenditures, and those statements preceded by, followed by or that otherwise include the words "may," "plans'" "believe," "expects," "anticipates," "intends," "estimates" or similar expressions or variations on such expressions. Each forward-looking statement reflects our current view of future events and is subject to risks, uncertainties and other factors that could cause our actual results to differ materially from any results expressed or implied by our forward-looking statements. These risks and uncertainties include, but are not limited to, the ability of our refinery to operate at full capacity and to operate profitability; uncertainty involving the geology of oil and gas deposits and reserve estimates; delays and changes in plans with respect to exploration or development projects or capital expenditures; political, legal and economic risks related to Papua New Guinea; the impact of competition; the volatility of prices for crude oil and the volatility of the difference between our purchase price of crude oil feedstocks and the sales price of our refined products; the uncertainty of our ability to attract capital; and the risks described under the heading "Risk Factors" in our 2005 Annual Information Form dated March 31, 2006.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of the assumptions could be inaccurate, and, therefore, we cannot assure you that the forward-looking statements included in this MD&A will prove to be accurate. In light of the significant uncertainties inherent in our forward-looking statements, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Except as may be required by applicable law, we undertake no obligation to publicly update or advise of any change in any forward-looking statement, whether as a result of new information, future events or otherwise. Our forward-looking statements are expressly qualified in their entirety by this cautionary statement.

We currently have no reserves as defined in Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. All information contained herein regarding resources are references to undiscovered resources under Canadian National Instrument 51-101, whether stated or not.

Contact Information