InterOil's Antelope-2 Well Encounters Higher Than Pre-Drill Estimates

InterOil has drilled into the top of the reservoir in the Antelope-2 well in Papua New Guinea. The top of the Antelope reservoir has been intersected at 6,007 feet (1,831 meters measured depth) which is 345 feet (105 meters) higher than the pre-drill estimates. The Company has begun preparations to run 9 5/8 inch casing.

Following completion of the 9 5/8 inch liner and tie back installation and the running of the tandem down-hole deployment valves, InterOil plans to drill ahead and perform a drill stem test (DST) in the upper portion of the wellbore. As previously announced, the first successful drill stem test at the Antelope-1 well flowed at 18 million cubic feet per day (MMcfpd) through a restricted down-hole 1/2 inch diameter aperture. In a final flow test through 7 inch tubing and a 3 1/2 inch choke, the Antelope-1 well flowed at 382 MMcfpd with 5,000 barrels per day of condensate.

The Company plans to resume drilling operations following completion of the 9 5/8 inch casing and DST #1 to drill the remaining carbonate reservoir, targeting the zone of interest in which heavy condensate and crude oil was recovered in the Antelope-1 well. InterOil plans to conduct a modified testing procedure which incorporates knowledge gained from the Antelope-1 well and is designed to improve the recovery of condensate and liquids as well as reduce the time required for formation evaluation.

Mr. Phil Mulacek, Chief Executive Officer of InterOil stated, "We are pleased to have encountered the top of the reef higher than prognosis and believe that the additional 345 feet of reservoir could result in a meaningful increase in our internal gas resource estimates. It is also valuable to us that continual improvements in drilling and testing procedures are resulting in savings in time and capital."