Interoil Wins Stake Blocks 5 & 6 Offshore Angola

InterOil Exploration & Production ASA

InterOil Exploration & Production ASA has signed the Production Sharing Agreement (PSA) for Blocks 5 & 6 in Angola. These awards are an important step in InterOil's process of establishing operations in West Africa.

InterOil is now a 40% participant in Block 5, where Vaalco Energy Inc. is operator with an equal interest. Sonangol P&P (national oil company of the Republic of Angola) is also a partner with an interest of 20%.

In Block 6 InterOil is participating with 20%, where Petrobras is operator with an interest of 40% and Sonangol, Initial Oil & Gas and Falcon Oil are partners with a total interest of 40%.

Blocks 5 & 6 are located in the shallow water (50 - 500m) areas of offshore Angola, and are on trend with major discoveries and production both North and South of the two blocks. 3D seismic has been acquired in the late 90's and in 2001 and will form the basis for a new exploration phase.

Block 5 is 5,708 square kilometers and is located in the Kwanza basin in the northern waters offshore Angola. 95% of the block has a water depth of less then 200 meters. The acreage is equivalent to approximately 10 offshore blocks in the North Sea. The block was first licensed to Total in the 1970s. The area was further developed by Conoco and Sonangol throughout the 1980s and 1990s. Twelve wells have been drilled in block 5 by the previous operators, which resulted in 5 discoveries. These oil accumulations were, at the time, deemed non-commercial, although it is reported by Sonangol that they discovered approximately 50 million barrels in three separate structures. A 3D seismic survey has already been acquired that covers the most prospective areas and the data quality is such that Interoil expects to firm up the potential and drill during 2007, subject to rig availability.

Block 6 covers an area of 4.930 square kilometers and is also located in the northern area of Kwanza Basin offshore Angola. The water depth ranges from 50 meters to 500 meters. Block 6 was first licensed to Total. After being further developed by Conoco and Sonangol, it will now be operated by Petrobras. Eight wells have been drilled by the previous operators, which resulted in 2 heavy oil discoveries. The largest of the discoveries is the Cegonha heavy oil field, which according to Sonangol contains 135 million barrels of oil. The discovery of heavy oil in two wells gives rise to optimism, as the new operator has extensive experience in the development of such fields. A 3D survey has now been acquired over the Cegonha field and additional 3D will be acquired in Block 6.

All previous discoveries in Blocks 5 & 6 were based on 2D data.

InterOil's share of the signing fee for the two blocks amount in total to US $24.75 million. The working program for the partners in Blocks 5 & 6 over the next 4 years include drilling of 2 exploration wells in each block and shot or acquire existing 3D seismic in total of 2,200 square kilometers. InterOil's share of the working program will cost approximately US $25 million.

InterOil Exploration & Production ASA is an international independent petroleum company with headquarters in Oslo. The company is engaged in the acquisition, exploration, development and operation of oil and natural gas properties. InterOil E&P serves as operator or active license partner in several production and exploration assets in Peru, Colombia and Angola.