InterOil Commences Operations on Moose Prospect

InterOil Corporation reports that the drilling rig to be used to drill the Moose prospect has arrived in Papua New Guinea. The Moose prospect is scheduled to spud on March 23rd and is the first well of the eight well drilling program. The drilling program is expected to continue through 2003.

The Moose prospect primary targets are the Late Cretaceous Pale and Subu Sands, at 1,500-2,000 meters with a secondary target Eocene limestone, at 1,100 meters. The drilling of the Moose prospect follows two successful stratigraphic wells drilled by InterOil, which discovered a new oil system. Technical studies were carried out by an Australian Government entity, the Petroleum Division of CSIRO (Commonwealth Science and Industry Research Organisation). The mean estimate (P50) of the Moose prospect is 350 million bbls. InterOil currently has 100% working interest in PPL 238 within which the Moose prospect is located. The Government of PNG has a right to take a 22.5% interest in the Moose prospect. InterOil has contracted RB Drilling to operate the drilling equipment under the management of InterOil's wholly owned subsidiary, SPI (208) Limited.

"We start the largest drilling program in PNG history, in an area our exploration team feels could be a new World Class Basin," says Phil Mulacek, Chief Executive Officer, InterOil. "Due to the attractive logistics of the Moose prospect, which is located close to an airstrip and navigable river, a discovery can lead to early development and production."