PNG Drilling Ventures Ltd. will earn an indirect 6.75% working interest in InterOil's expanded 16 well program. The group has a right to convert part of the working interest into InterOil common stock at an average price of US$16.83 per share (C$23.24 per share). The agreement to convert is subject to regulatory approval. These funds now enable us to expand our previously announced 8 well drilling program to a 16 well program with all 16 exploratory wells drilled on separate, independent structures.
'We are pleased to continue to receive support from the investment community, both nationally and internationally, for our drilling program' said Phil Mulacek, CEO of InterOil. 'Although we just initiated our exploration program investors are sharing our enthusiasm for its potential to add significant value to InterOil.' InterOil is focused on Papua New Guinea and the surrounding region, and is developing an integrated energy business consisting of an oil refinery, petroleum exploration, and retail assets. The majority of product from the refinery is secured by contracts with Shell Overseas Holdings Ltd. BP Singapore is the exclusive agent for all crude oil supplied to the refinery. In addition to the refinery and retail assets, InterOil has commenced the largest exploration program by a single company in Papua New Guinea history.
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