InterOil signs preliminary works joint venture agreement with Mitsui

·        Agreement Provides Funding For Preliminary Works at Condensate Stripping Plant

·        Project Anticipates Yield of Approximately 9,000 Barrels of Condensate Per Day

 

Port Moresby  PNG, Cairns, Australia and Houston, TX --April 15, 2010: INTEROIL Corporation  announced ON Thursday, April 15, that the Company has entered into agreements with Mitsui & Co. Ltd., to jointly operate and fund the preliminary works involved to develop a proposed condensate stripping facility ('the Project') at InterOil's Elk and Antelope field site in Gulf Province, Papua New Guinea.

The preliminary works program is for all the works required to take us through the Front

End Engineering and Design (FEED) stage for the construction of a condensate stripping plant, to

the point of Final Investment Decision (FID).

The Project is proposed to be designed to process 400 million standard cubic feet per day (mmscf/day) of wellhead gas with an anticipated yield of approximately 9,000 barrels (bbls) of condensate per day.

Dry gas will be reinjected into the reservoir for storage until the proposed LNG facility has been constructed.

The condensate will be barged to the InterOil refinery in Port Moresby for processing and sale.

InterOil and Mitsui will each be responsible for half of the capital expenditure involved in

the preliminary works and Mitsui will fund InterOil's share.

Standard conditions of the agreements include the completion of FEED, an EPC agreement,

and the definitive agreements by December 31, 2010, necessary to reach FID.

In the event that FID is not reached, InterOil will be required to refund the capital expenditure incurred to date within a specified period.

 "We look forward to a long and prosperous relationship with Mitsui, one of the largest energy conglomerates in Japan, InterOil Chairman and CEO Phil Mulacek said.

"When in production, the condensate project will provide a stable platform of early cash flow enhancing the benefit to partners in our proposed LNG project."

 

For further in formation please contact

 Susuve Laumaea

Senior Manager  - Media Relations/Public Affairs

InterOil Corporation (PNG Operations)

Ph: 321 7040 or 3099363

Mobile: 72013870

Email: susuve.laumaea@interoil.com