InterOil Corporation

InterOil Corporation

February 25, 2005 20:37 ET

InterOil Provides Operational Update on Papua New Guinea Refinery


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: INTEROIL CORPORATION

TSX SYMBOL: IOL
ASX., AMEX SYMBOL: IOC

FEBRUARY 25, 2005 - 20:37 ET

InterOil Provides Operational Update on Papua New
Guinea Refinery

TORONTO, ONTARIO--(CCNMatthews - Feb. 25, 2005) - InterOil Corporation
(TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC), a Canadian company with
operations in Papua New Guinea, today announced that, following the
declaration of a force majeure notice on February 14, 2005 by Oil
Search, curtailing crude loading operations at its Kumul terminal in
Papua New Guinea, InterOil will suspend refining operations at its
refinery in Papua New Guinea commencing February 28, 2005. InterOil has
ensured that this activity will not adversely affect domestic Papua New
Guinea refined product delivery obligations. The force majeure situation
at the Kumul terminal has unexpectedly interrupted the refinery crude
supply as InterOil's next crude cargo from Kumul was scheduled to be
delivered during the last week of February.

An alternative crude cargo has been sourced through InterOil's crude
supplier BP, scheduled to arrive at the refinery around March 10, 2005.
Elective maintenance and upgrading activities will be carried out during
this period. These upgrades will result in the production of a larger
volume of higher value product and the optimization of our refinery into
the 2nd Quarter, 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 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.

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.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    InterOil Corporation: Houston, TX USA
    Gary M Duvall
    V.P., Corporate Development
    (281) 292-1800
    Email: gary.duvall@interoil.com
    or
    InterOil Corporation: Cairns, Qld Australia
    Anesti Dermedgoglou
    V.P., Investor Relations
    +61 7 4046 4600
    Email: anesti@interoil.com
    Website: www.interoil.com