InterOil Says Moose Sidetrack Well Encouraging

InterOil reports that on-site inspection of the core data from the Moose-1ST sidetrack well indicates more than fourteen oil shows in 135 meters (443 feet) of continuous core from 673 meters (2,208 feet) to 808 meters (2,651 feet). The shows are both in fractures and from porous sections within the limestone. The limestone is in two sections separated by a mudstone from 756 to 758 meters (believed to be Miocene 673-756 meters and Eocene 758-808 meters).

While the presence of hydrocarbons is encouraging, there is insufficient data to determine commercial significance. The presence of hydrocarbons has been confirmed by Baker Hughes Inteq employed as on-site mud-logging contractors. Core samples have been sent to the Australian Government Commonwealth Scientific & Industrial Research Organization (CSIRO) for independent verification and further study, including hydrocarbon analysis and age dating. Initial gas chromatograph and mass spectrometer results from CSIRO indicate a light natural crude oil of marine origin.

InterOil is considering testing procedures which may include flow testing, and/or electric wireline logging. In addition to the evaluation of this limestone section the sidetrack drilling will continue in order to determine the presence or absence of the primary targets, the Pale and Subu sandstones. "The presence of live oil is the evidence that we needed to confirm our view that the Eocene is a prospective oil zone in Papua New Guinea, and demonstrates the Puri-1 oil flow was not an isolated anomaly," said Andy Carroll, InterOil's General Manager of Exploration and Production. "Specifically, these cores demonstrate reservoir, seal, structure/trap and oil at Moose. The demonstration of oil generation, migration, and preservation upgrades the nearby leads and prospects within our multi-well drilling program."