InterOil Cites 23% Production Increase from Drilling in South America

InterOil Exploration & Production ASA's consolidated revenues amounted at all time high of USD$29.6 million in Q2 2008 with an EBITDA of USD$4.2 million. The production increased by 23% and the consolidated revenue has increased by 106% for the first half of 2008 compared with 2007.

Successful start of the new drilling campaign in both Peru and Colombia during Q2 2008 will contribute to
production growth in the upcoming quarters.

"Although the production declined by 6% since last quarter, the second quarter of 2008 has been a success for InterOil. InterOil started the 2008 drilling and fracturing program in Peru and Colombia in mid Q2 2008 and made a new discovery in the Mirador area in Peru.

The first results indicate a huge upside potential and the new area will have a significant impact on our reserves and future production in Peru. We will in Q3 test two more segments by drilling two more wells in August 2008 to verify the lateral extend of the new discovery. Most likely a significant number of wells could be drilled in this area during the next quarters. InterOil has also had success with the fracturing and drilling campaign in Colombia and will continue these campaigns during Q3 2008," said Nils N. Trulsvik, CEO
of InterOil Exploration & Production.

InterOil's second quarter 2008 consolidated revenues were a new record of USD 29.6 million, compared to USD 15.4 million for the second quarter 2007, representing an increase of 92 %. The EBITDA was USD 4.2 million in the second quarter 2008, compared to USD 0.4 million for the same period in 2007.

During Q3 2008, InterOil will test two segments by drilling two more
exploration wells in the Mirador area in the south of Block III. If
the next two wells are successful, InterOil has secured two drilling
rigs to drill 11 more wells back to back in this area during 2008.

In Colombia we will continue the drilling campaign by drilling three
more wells in Mana and eight shallow wells in Toqui Toqui and Mana
area during Q3 2008. InterOil will also complete the fracturing
campaign by fracturing four more wells during August and September
this year.

As a result of the active drilling and fracturing in Peru and
Colombia, we expect the production to increase significantly before
the end of 2008.