InterOil Spuds Triceratops-1 Exploration Well in Papua New Guinea

InterOil reports that drilling has commenced at the Triceratops - 1 exploration well. The Triceratops is InterOil's first exploration test in its PPL 237 License and is targeting the Puri fractured limestone reservoir in a fault separated closure, 2.2 miles (3.5 kilometers) north of the Bwata - 1 discovery well that was drilled in 1959. The Bwata - 1 well encountered 516 feet (157 meters) of gas pay in the Miocene Puri limestone and tested a maximum sustained flow of 29 mmscfgd through a 1/2 inch choke over four days, indicating an estimated open hole potential of 43 mmscfgd. The Bwata - 1 well also encountered gas shows in intra-Orubadi sandstone above the limestone and this formation will also be penetrated within closure at the Triceratops location.

The Triceratops - 1 well is being drilled into a culmination identified by airborne gravity and confirmed by a seismic survey concluded in May 2005. The well will be drilled to a measured depth of 7,050 feet (2,150 meters) and is expected to take 50 days to drill and log. The limestone section will be drilled directionally to insure intersection of the Puri limestone near its crest and remain in the hanging wall throughout the potential pay section.

The Triceratops - 1 well is the second well in our recently announced eight well drilling program to be drilled and follows the closing of a US$125 million drilling fund for exploration purposes announced early 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.