InterOil Recovers Additional Oil from Antelope-1 in PNG

InterOil Corp.

InterOil announced additional oil recovery from the most recently drilled interval from 7,891 feet (2,402 meters) to the total depth at 8,170 feet (2490 meters) in the second side track of the Antelope-1 well. Drill Stem Test (DST) #14, performed over an interval from 7,940 feet (2,420 meters) to 8,045 feet (2,452 meters) in the second side track, recovered gas, condensate, oil and drilling fluid over the 105 foot (32 meter) open hole section. Subsequently, DST #15 performed over an interval from 8,078 feet (2,462 meters) to 8,170 feet (2,490 meters) was unsuccessful due to the downhole valve failing to open. The oil recovered in DST #14 measured in the lab within a range 33 to 43 degree API gravity.

The forward plan is to complete the well for a long term production test. We are currently installing 2 7/8ths production tubing to the open hole section below the liner from 7700 feet (2347 meters) to the top of a cement plug at the bottom of the well at 8055 feet (2455 meters).

Following completion of the well the rig will be moved to the prepared Antelope-2 location targeting a spud date near the end of July. Our analysis of test results to date indicate condensate rich natural gas from the top of the reservoir at 5,742 feet (1,750 meters) down to 7,769 feet (2,368 meters), a total of 2,027 feet (618 meters), a possible oil and heavy condensate column from 7,769 feet (2,368 meters) to 8045 feet (2452 meters), a total of 276 feet (84 meters) and transition zone to water estimated to be between 8,160 feet (2,487 meters) and 8,367 feet (2,550 meters). The long term production test should further our understanding of the volumes and recovery of both condensate and oil in the reservoir as well as completing the original objective of testing for a higher condensate-to-gas ratio.

The Company is in the early stages of evaluation and has not yet been able to determine any reasonable approximation of oil volumes, and in particular whether oil volumes would be sufficient to be commercially exploitable.