InterOil Announces 2011 Financial and Operating Results

PORT MORESBY, Papua New Guinea and HOUSTON, March 19, 2012 /PRNewswire/ -- InterOil Corporation (NYSE: IOC) (POMSoX:IOC) today announced financial and operating results for the fourth quarter and full year ended December 31, 2011.

Fourth Quarter 2011 Highlights and Recent Developments

  • During the fourth quarter, InterOil completed two Heads of Agreements (HOA) on long-term LNG supply for its proposed LNG project in Papua New Guinea, bringing the total of its three HOAs to 3.3 to 3.8 million tonnes per annum (mtpa). While not binding, these HOAs set out the basis upon which the parties intend to negotiate and document terms for the purchase and sale of LNG.
  • Exploration activities continued across our three Petroleum Prospecting Licenses (PPLs) in PNG during the quarter. Seven dip lines were acquired to further delineate the Wahoo and Mako prospects and identify potential drilling locations.  Processing and interpretation of the data is ongoing.  A third phase of seismic data acquisition, which consists of two dip orientated lines totaling 21 kilometers in length over the Tuna prospect and Wahoo/Mako prospects, commenced on December 22, 2011.  Line preparation is currently in progress.
  • Net profit for the year ended December 31, 2011 was $17.7 million compared with a net loss of $44.5 million for the same period in 2010, an improvement of $62.2 million.  The operating segments of Corporate, Midstream Refining and Downstream collectively returned a net profit for the year of $82.3 million.  The development segments of Upstream and Midstream Liquefaction yielded a net loss of $64.6 million.
  • Subsequent to the quarter end, on January 17th, 2012, InterOil announced that the Triceratops-2 delineation well had been spudded.  The Triceratops-2 well is an appraisal well to test the presence of hydrocarbons and determine whether a potential reefal carbonate reservoir exists in the Triceratops field.

InterOil's Chief Executive Officer Phil Mulacek commented, "We continue to work with our existing LNG development partners and the PNG government to advance our LNG project towards first production.  Simultaneously, our advisors are managing the process of soliciting and evaluating proposals from potential strategic LNG partners.  If a strategic partner is selected, we expect that such a partner would assist with accelerating the LNG project's capacity growth.  Our delineation drilling at Triceratops has the potential to add to our substantial resource estimate at Elk and Antelope, and provide back-up supply for increasing LNG capacity.  Our prospect inventory is maturing and we anticipate that it will support our goal of a multi-year, multi-well exploration program.  We believe that these achievements, combined with our strong balance sheet, support our continued growth and operational success."

Corporate Financial Results

InterOil recorded a net profit for the year ended December 31, 2011 of $17.7 million, compared with a net loss of $44.5 million for the same period in 2010, an improvement of $62.2 million.  The operating segments of Corporate, Midstream Refining and Downstream collectively returned a net profit for the year of $82.3 million.  The development segments of Upstream and Midstream Liquefaction yielded a net loss of $64.6 million for an aggregate net profit of $17.7 million.

EBITDA for the year ended December 31, 2011 was $50.4 million, an increase of $66.9 million over negative EBITDA of $16.5 million for the same period in 2010, the improvement was mainly due to unusual, one time charges in 2010 and an improvement in our net foreign exchange gains as a result of rising Papua New Guinea Kina ("PGK") against USD.

Total revenues for the year ended December 31, 2011 were $1,118.9 million compared with $807.0 million and $693.1 million respectively for the same periods in 2010 and 2009.  This increase in the year ended 2011 compared to the same period in 2010 was due to the higher crude price environment in the 2011 year and an increase in domestic volumes of product sold for higher margin products.  The total volume of all products sold by us was 7.5 million barrels for fiscal year 2011, compared with 7.2 million barrels in 2010.

Business Segment Results

Upstream - Work commenced on the seven dip lines, 56 kilometer, Kwalaha seismic data acquisition program on September 16, 2011 and was completed on December 20, 2011.  The objective of the survey was to further delineate the Wahoo and Mako prospects and identify potential drilling locations.  Processing and interpretation of the data is ongoing.  A third phase of seismic data acquisition, which consists of two dip orientated lines totaling 21 kilometers in length over the Tuna prospect, commenced on December 22, 2011.  Line preparation is currently in progress.

During 2011, we contracted for airborne magnetic, gravity and gamma ray prospecting over PPL 236, PPL 237 and PPL 238. Five acquisition blocks were acquired for a total of 14,288 line kilometers of airborne data.  Data processing over this airborne data is currently undergoing final quality control assessment.

The preparation of the Triceratops-2 well site was completed at the end of 2011 and the Triceratops-2 well was spudded on January 17, 2012.  The Triceratops-2 well is an appraisal well to test the presence of hydrocarbons and determine whether a potential reefal carbonate reservoir exists in the Triceratops field.  

During 2011, the FEED work was completed on the Condensate Stripping Project.  The FEED phase generated deliverables to technically and commercially define the project and prepare it for execution and proposals were solicited from potential Engineering, Procurement and Construction ("EPC") contractors.  We are continuing the planning and preparation efforts for Condensate Stripping Project execution which includes preparing a combined LNG project execution plan, execution schedule and risk assessment work.

InterOil's Upstream business realized a net loss of $49.1 million in 2011 compared to a loss of $78.6 million in the comparable period a year ago. The decrease in the loss in 2011 was mainly due to a $30.6 loss on extinguishment of IPI liability in 2010.

Midstream Refining – Total refinery throughput for the year ended December 31, 2011 was 24,856 barrels per operating day, compared with 24,682 barrels per operating day during 2010. Capacity utilization for 2011, based on 36,500 barrels per day operating capacity, was 54% compared with 53% in 2010.

The Company's Midstream Refining operations generated a net profit of $46.7 million in 2011 versus a profit of $33.5 million in the prior year. The $13.2 million positive variance is largely due to an increase in foreign exchange gain which was partially offset by a decrease in the gross margin.

Midstream Liquefaction – During 2011, site-specific engineering for the land based modular LNG and fixed-floating LNG facilities were undertaken along with other pre-investment in the LNG Project to lower risks to potential strategic partners and to secure our LNG Project timeline and costs.

On November 25, 2011, a Heads of Agreement was signed with Gunvor Singapore Pte. Ltd. for the supply of one mtpa of LNG from the LNG Project in Papua New Guinea. On December 2, 2011, a further Heads of Agreement was signed with ENN Energy Trading Company Ltd. of China, for the supply of one to one and one half mtpa of LNG from the LNG Project. The Heads of Agreements, while not binding, provide exclusivity on the LNG volumes, during negotiation of the definitive agreement, and set out the basis upon which the parties intend to negotiate and document terms for the purchase and sale of LNG commencing in 2015.

The Company's Midstream Liquefaction business generated a loss of $15.5 million in 2011 compared with a loss of $8.4 million a year ago. The negative variance is largely due to an increase in office, administration and other expenses for the year resulting from increased activities undertaken to negotiate long term LNG offtake agreements, pre-FEED work being undertaken for the LNG Project's proposed land based liquefaction and fixed-floating liquefaction facilities, and also further the discussions with the PNG State to achieve requisite approvals to complete the LNG project.

Downstream - Total Downstream sales volumes for 2011 were 678.0 million liters, compared with 626.5 million liters in 2010.  In 2011, InterOil signed supply agreements with several key contractors and sub-contractors associated with the Exxon Mobil LNG project, Papua New Guinea's largest resource project to date.  In addition, the Company re-signed all existing major customers in the agricultural, commercial and aviation sectors to further three year term supply agreements.

InterOil's Downstream operations generated a net profit of $11.6 million in 2011, an improvement of $4.9 million versus a profit of $6.7 million in the previous year.  Gross margins increased in 2011 as compared to the prior year mainly due to an increase in domestic sales volumes, the impact of the revised pricing formula that came into effect in late 2010, and the increasing price environment during the period leading to higher margins on inventories sold.

Corporate – The shipping business, which operates two vessels transporting petroleum products for us and external customers both within PNG and for export in the South Pacific region, was transferred from our Downstream segment to our Corporate segment during the year.

The Corporate segment generated a net profit of $21.9 million in 2011, compared to a net profit of $3.3 million in 2010. The positive variance is the result of reduced interest expenses due to higher interest charges to other business segments on increased loan balances, and a litigation expense which was included in the prior year period.

Summary of Consolidated Quarterly Financial Results for Past Eight Quarters


Quarters ended
($ thousands except per share data)

2011

2010


Dec-31

Sep-30

Jun-30

Mar-31

Dec-31

Sep-30

Jun-30

Mar-31

Upstream

1,891

2,645

4,638

668

245

714

1,349

998

Midstream – Refining

237,640

231,455

262,111

217,743

158,092

173,379

194,016

152,093

Midstream – Liquefaction

-

-

-

-

-

-

-

-

Downstream

209,678

186,304

191,431

157,709

143,364

133,508

119,300

109,687

Corporate

21,831

25,078

26,548

18,659

15,213

18,295

11,321

12,093

Consolidation entries

(181,428)

(163,584)

(180,945)

(151,125)

(122,545)

(117,437)

(100,637)

(96,053)

Total revenues

289,612

281,898

303,783

243,654

194,369

208,459

225,349

178,818

Upstream

665

(6,169)

593

(10,957)

(41,681)

(11,753)

(3,498)

(1,964)

Midstream – Refining

2,604

3,461

27,967

26,632

13,780

15,785

16,962

4,402

Midstream – Liquefaction

(4,123)

(3,602)

(4,035)

(2,375)

(1,959)

(4,588)

(3)

(563)

Downstream

6,808

3,570

5,777

8,744

4,709

1,674

7,060

4,492

Corporate

10,134

1,548

13,940

5,223

4,566

(4,510)

1,751

4,402

Consolidation entries

(11,280)

(10,263)

(5,270)

(9,200)

(7,004)

(5,229)

(7,384)

(5,911)

EBITDA (1)

4,808

(11,455)

38,972

18,067

(27,589)

(8,621)

14,888

4,858

Upstream

(9,402)

(15,080)

(6,703)

(17,949)

(47,845)

(16,585)

(7,943)

(6,182)

Midstream – Refining

15,684

(1,201)

17,314

14,894

9,504

11,998

12,056

(74)

Midstream – Liquefaction

(4,574)

(3,980)

(4,309)

(2,604)

(2,114)

(4,970)

(360)

(911)

Downstream

3,621

1,146

2,306

4,491

2,643

(325)

3,719

671

Corporate

7,616

(473)

11,275

3,463

3,381

(5,398)

1,796

3,544

Consolidation entries

252

(190)

3,657

(1,596)

(401)

908

(1,435)

(190)

Net profit/(loss)

13,197

(19,778)

23,540

699

(34,832)

(14,372)

7,833

(3,142)

Net profit/(loss) per share (dollars)









Per Share – Basic

0.27

(0.41)

0.49

0.01

(0.76)

(0.33)

0.18

(0.07)

Per Share – Diluted

0.27

(0.41)

0.48

0.01

(0.76)

(0.33)

0.17

(0.07)



(1)

EBITDA is a non-GAAP measure, please refer to "Non-GAAP EBITDA Reconciliation" in this press release.



Balance Sheet and Liquidity

InterOil closed 2011 with cash, cash equivalents and cash restricted totaling $108.1 million (December 2010 - $280.9 million), of which $39.3 million is restricted (December 2010 - $47.3 million).  The Company also has investments in Bank of PNG treasury bills of $11.8 million as at December 31, 2011 (December 2010 - $nil).

We also had aggregate working capital facilities of $290.6 million, with $85.1 million available for use in our Midstream Refining operations, and $54.2 million available for use in our Downstream operations.

The Company is managing its gearing levels by maintaining the debt-to-capital ratio (debt/(shareholders' equity + debt)) at 50% or less.  Our debt-to-capital ratio was 12% in December 2011 from 13% in December 2010.

InterOil has no obligation to execute exploration activities within a set timeframe and therefore has the ability to select the timing of these activities as long as the minimum license commitments in relation to the Company's Petroleum Prospecting Licenses ("PPL") and Petroleum Retention Licenses ("PRL") are met.

Summary of Debt Facilities

Summarized below are the debt facilities available to us and the balances outstanding as at December 31, 2011.


Organization

Facility

Balance outstanding
December 31, 2011

Effective interest rate

Maturity date

OPIC secured loan

$35,500,000

$35,500,000

6.93%

December 2015

BNP Paribas working capital facility

$260,000,000 (2)

$10,030,131 (1)

3.38%

January 2012 (3)

Westpac PGK working capital facility

$37,320,000 (4)

$6,450,372

9.65%

November 2014

BSP PGK working capital facility

$23,325,000

$0

9.47%

August 2012

2.75% convertible notes

$70,000,000

$70,000,000

7.91%(6)

November 2015

Mitsui unsecured loan (5)

$10,393,023

$10,393,023

6.23%

See detail below




(1)

Excludes letters of credit totaling $164.9 million, which reduce the available balance of the facility to $85.1 million at December 31, 2011.

(2)

The facility was increased by $30.0 million during the quarter ended March 31, 2011 from $190.0 million to $220.0 million, and was then increased by a further $10.0 million during the quarter ended June 30, 2011 to $230.0 million.  During the quarter ended December 31, 2011 there was a temporary $30.0 million increase to $260.0 million.  The facility reverted back to a maximum availability of $230.0 million at the end of January 2012.

(3)

The facility was extended after the end of the year, and it now matures on January 31, 2013.

(4)

Subsequent to the year end, the limit on this facility was increased by approximately $4.7 million, with a new limit of approximately $42.0 million.

(5)

Facility is to fund our share of the Condensate Stripping Project costs as they are incurred pursuant to the JVOA with Mitsui.

(6)

Effective rate after bifurcating the equity and debt components of the $70 million principal amount of 2.75% convertible senior notes due 2015.



InterOil Corporation



Consolidated Income Statements



(Expressed in United States dollars)







Year ended





December 31,

December 31,


2011

2010


$

$




Revenue



  Sales and operating revenues

1,106,533,853

802,374,399

  Interest

1,356,124

150,816

  Other

11,058,090

4,470,048


1,118,948,067

806,995,263




  Changes in inventories of finished goods and work in progress

43,934,439

57,010,311

  Raw materials and consumables used

(1,064,866,361)

(758,566,961)

  Administrative and general expenses

(41,160,824)

(41,047,949)

  Derivative gains/(losses)

2,006,321

(1,065,188)

  Legal and professional fees

(6,801,334)

(6,902,241)

  Exploration costs, excluding exploration impairment (note 13)

(18,435,150)

(16,981,929)

  Finance costs

(18,163,769)

(12,064,982)

  Depreciation and amortization

(20,136,649)

(14,274,922)

  Gain on sale of oil and gas properties

-

2,140,783

  Loss on extinguishment of liability

-

(30,568,710)

  Litigation settlement expense

-

(12,000,000)

  Loss on available-for-sale investment (note 14)

(3,420,406)

-

  Foreign exchange gains/(losses)

25,018,661

(10,776,823)


(1,102,025,072)

(845,098,611)

Profit/(loss) before income taxes

16,922,995

(38,103,348)




Income taxes



  Current tax expense (note 15)

(5,512,842)

(3,898,067)

  Deferred tax benefit/(expense) (note 15)

6,248,509

(2,511,656)


735,667

(6,409,723)




Profit/(loss) for the year

17,658,662

(44,513,071)




Profit/(loss) is attributable to:



Owners of InterOil Corporation

17,652,461

(44,519,573)

Non-controlling interest

6,201

6,502


17,658,662

(44,513,071)




Basic profit/(loss) per share

0.37

(1.00)

Diluted profit/(loss) per share

0.36

(1.00)

Weighted average number of common shares outstanding



  Basic (Expressed in number of common shares)

47,977,478

44,329,670

  Diluted (Expressed in number of common shares)

49,214,190

44,329,670




See accompanying notes to the consolidated financial statements





InterOil Corporation




Consolidated Balance Sheets




(Expressed in United States dollars)












As at














December 31,

December 31,

January 1,



2011

2010

2010



$

$

$







Assets





Current assets:





   Cash and cash equivalents (note 6)

68,846,441

233,576,821

46,449,819


   Cash restricted (note 9)

32,982,001

40,664,995

22,698,829


   Short term treasury bills - held-to-maturity (note 8)

11,832,110

-

-


   Trade and other receivables (note 10)

135,273,600

48,047,496

61,194,136


   Derivative financial instruments (note 9)

595,440

-

-


   Other current assets

867,967

505,059

639,646


   Inventories (note 11)

171,071,799

127,137,360

70,127,049


   Prepaid expenses

5,477,596

3,593,574

6,964,950


Total current assets

426,946,954

453,525,305

208,074,429


Non-current assets:





   Cash restricted (note 9)

6,268,762

6,613,074

6,609,746


   Goodwill (note 17)

6,626,317

6,626,317

6,626,317


   Plant and equipment (note 12)

246,043,948

225,205,427

218,794,649


   Oil and gas properties (note 13)

362,852,766

255,294,738

172,483,562


   Deferred tax assets (note 15)

35,965,273

28,477,690

30,319,163


   Available-for-sale investments (note 14)

3,650,786

-

-


Total non-current assets

661,407,852

522,217,246

434,833,437


Total assets

1,088,354,806

975,742,551

642,907,866


Liabilities and shareholders' equity





Current liabilities:





   Trade and other payables (note 16)

159,882,177

75,132,880

59,372,354


   Income tax payable

4,085,137

955,074

-


   Derivative financial instruments (note 9)

11,457

178,578

-


   Working capital facilities (note 18)

16,480,503

51,254,326

24,626,419


   Unsecured loan and current portion of secured loan (note 20)

19,393,023

14,456,757

9,000,000


   Current portion of Indirect participation interest (note 21)

540,002

540,002

540,002


Total current liabilities

200,392,299

142,517,617

93,538,775


Non-current liabilities:





   Secured loan (note 20)

26,037,166

34,813,222

43,589,278


   2.75% convertible notes liability (note 26)

55,637,630

52,425,489

-


   Deferred gain on contributions to LNG project (note 22)

5,810,775

8,949,857

10,824,212


   Indirect participation interest (note 21)

34,134,840

34,134,387

39,559,718


   Asset retirement obligations (note 23)

4,562,269

-

-


   Deferred tax liabilities (note 15)

1,889,391

-

-


Total non-current liabilities

128,072,071

130,322,955

93,973,208


Total liabilities

328,464,370

272,840,572

187,511,983


Equity:





Equity attributable to owners of InterOil Corporation:





   Share capital (note 25)

905,981,614

895,651,052

613,361,363


       Authorized - unlimited





       Issued and outstanding - 48,121,071





       (Dec 31, 2010 - 47,800,552)





   2.75% convertible notes (note 26)

14,298,036

14,298,036

-


   Contributed surplus

25,644,245

16,738,417

21,297,177


   Accumulated Other Comprehensive Income

29,380,882

9,261,177

8,150,976


   Conversion options (note 21)

12,150,880

12,150,880

13,270,880


   Accumulated deficit

(227,565,221)

(245,217,682)

(200,698,109)


Total equity attributable to owners of InterOil Corporation

759,890,436

702,881,880

455,382,287


Non-controlling interest

-

20,099

13,596


Total equity

759,890,436

702,901,979

455,395,883


Total liabilities and equity

1,088,354,806

975,742,551

642,907,866

See accompanying notes to the consolidated financial statements






InterOil Corporation



Consolidated Statements of Cash Flows



(Expressed in United States dollars)







Year ended


December 31,

December 31,


2011

2010


$

$




Cash flows generated from (used in):






Operating activities



   Net profit/(loss) for the year

17,658,662

(44,513,071)

   Adjustments for non-cash and non-operating transactions



     Depreciation and amortization

20,136,649

14,274,922

     Deferred tax assets

(5,598,192)

1,841,473

     Gain on sale of exploration assets

-

(2,140,783)

     Accretion of convertible notes liability

3,212,141

432,632

     Amortization of deferred financing costs

223,944

1,223,944

     Timing difference between derivatives recognized



        and settled

(762,561)

178,578

     Stock compensation expense, including restricted stock

14,721,387

11,804,000

     Movement in net realizable value write down

259,406

-

     Accretion of asset retirement obligation liability

159,356

-

     Oil and gas properties expensed

18,435,150

16,981,929

     Loss on extinguishment of IPI Liability

-

30,568,710

     Non-cash litigation settlement expense

-

12,000,000

     Loss on Flex LNG investment

3,420,406

-

     Gain on proportionate consolidation of LNG project

(555,030)

-

     Unrealized foreign exchange gain

(2,618,814)

(72,456)

   Change in operating working capital



     Increase in trade and other receivables

(53,064,305)

(9,224,005)

     (Increase)/decrease in other current assets and prepaid expenses

(2,246,930)

3,505,963

     Increase in inventories

(28,003,484)

(56,115,637)

     Increase in trade and other payables

77,291,915

5,692,543

   Net cash generated from/(used in) operating activities

62,669,700

(13,561,258)




Investing activities



   Expenditure on oil and gas properties

(134,927,701)

(113,128,916)

   Proceeds from IPI cash calls

749,794

23,723,752

   Expenditure on plant and equipment

(42,050,435)

(22,560,055)

   Proceeds received on sale of exploration assets

-

15,544,465

   Investment in short term treasury bills

(11,832,110)

-

   Acquisition of Flex LNG Ltd shares, including transaction costs

(7,478,756)

-

   Decrease/(increase) in restricted cash held as security on



      borrowings

8,027,306

(17,969,494)

   Change in non-operating working capital



     Increase in trade and other receivables

(10,000,000)

-

     (Decrease)/increase in trade and other payables

(6,727,960)

3,232,029

   Net cash used in investing activities

(204,239,862)

(111,158,219)




Financing activities



   Repayments of OPIC secured loan

(9,000,000)

(9,000,000)

   Proceeds from Mitsui for Condensate Stripping Plant

9,872,532

11,913,514

   Proceeds from/(repayments of) Clarion Finanz secured loan,



      net of transaction costs

-

(1,000,000)

   Proceeds from PNG LNG cash call

2,247,533

866,600

   Proceeds from Petromin for Elk and Antelope field development

-

5,000,000

   (Repayments of)/proceeds from working capital facility

(34,773,823)

26,627,907

   Proceeds from issue of common shares, net of transaction costs

4,488,703

211,147,565

   Proceeds from issue of convertible notes, net of transaction costs

-

66,290,893

 Net cash (used in)/generated from financing activities

(27,165,055)

311,846,479




(Decrease)/increase in cash and cash equivalents

(168,735,217)

187,127,002

Cash and cash equivalents, beginning of year

233,576,821

46,449,819

Exchange gains on cash and cash equivalents

4,004,837

-

Cash and cash equivalents, end of year (note 6)

68,846,441

233,576,821

Comprising of:



Cash on Deposit

18,758,288

233,576,821

Term Deposits

50,088,153

-

Total cash and cash equivalents, end of year

68,846,441

233,576,821




See accompanying notes to the consolidated financial statements





NON-GAAP EBITDA Reconciliation

EBITDA represents our net income/(loss) plus total interest expense (excluding amortization of debt issuance costs), income tax expense, depreciation and amortization expense.  EBITDA is used by us to analyze operating performance.  EBITDA does not have a standardized meaning prescribed by GAAP (i.e., IFRS) and, therefore, may not be comparable with the calculation of similar measures for other companies.  The items excluded from EBITDA are significant in assessing our operating results.  Therefore, EBITDA should not be considered in isolation or as an alternative to net earnings, operating profit, net cash provided from operating activities and other measures of financial performance prepared in accordance with IFRS.  Further, EBITDA is not a measure of cash flow under IFRS and should not be considered as such.  For reconciliation of EBITDA to the net income (loss) under IFRS, refer to the following table.

The following table reconciles net income (loss), a GAAP measure, to EBITDA, a non-GAAP measure for each of the last eight quarters.  Our IFRS transition date was January 1, 2010 and as such, the 2010 comparative information has been restated in accordance with IFRS.


Quarters ended
($ thousands)

2011

2010



Dec-31

Sep-31

Jun-30

Mar-31

Dec-31

Sep-30

Jun-30

Mar-31


Upstream

665

(6,169)

593

(10,957)

(41,681)

(11,753)

(3,498)

(1,964)


Midstream – Refining

2,604

3,461

27,967

26,632

13,780

15,785

16,962

4,402


Midstream – Liquefaction

(4,123)

(3,602)

(4,035)

(2,375)

(1,959)

(4,588)

(3)

(563)


Downstream

6,808

3,570

5,777

8,744

4,709

1,674

7,060

4,492


Corporate

10,134

1,548

13,940

5,223

4,566

(4,510)

1,751

4,402


Consolidation Entries

(11,280)

(10,263)

(5,270)

(9,200)

(7,004)

(5,229)

(7,384)

(5,911)


Earnings before interest, taxes, depreciation and amortization

4,808

(11,455)

38,972

18,067

(27,589)

(8,621)

14,888

4,858


Subtract:










Upstream

(8,712)

(7,806)

(7,142)

(6,352)

(5,481)

(4,600)

(4,367)

(4,081)


Midstream – Refining

(3,285)

(2,494)

(2,211)

(1,675)

(1,509)

(1,693)

(1,651)

(1,731)


Midstream – Liquefaction

(445)

(372)

(268)

(223)

(184)

(376)

(351)

(342)


Downstream

(1,170)

(1,233)

(1,116)

(826)

(835)

(938)

(1,167)

(800)


Corporate

(1,498)

(1,477)

(1,641)

(1,395)

(1,158)

(342)

(20)

(20)


Consolidation Entries

11,500

10,041

8,894

7,572

6,571

6,107

5,917

5,688


Interest expense

(3,610)

(3,341)

(3,484)

(2,899)

(2,596)

(1,842)

(1,639)

(1,286)


Upstream

0

-

-

-

-

-

-

-


Midstream – Refining

19,243

678

(5,677)

(7,298)

(65)

101

(366)

(173)


Midstream – Liquefaction

0

-

-

-

36

-

-

-


Downstream

(595)

(297)

(1,449)

(2,623)

(495)

(322)

(1,524)

(2,360)


Corporate

(493)

(195)

(629)

71

(11)

(529)

97

(797)


Consolidation Entries

0

0

0

-

(2)

(2)

(1)

-


Income taxes

18,155

186

(7,755)

(9,850)

(537)

(752)

(1,794)

(3,330)


Upstream

(1,355)

(1,105)

(154)

(641)

(683)

(232)

(78)

(138)


Midstream – Refining

(2,878)

(2,846)

(2,764)

(2,765)

(2,700)

(2,195)

(2,888)

(2,571)


Midstream – Liquefaction

(6)

(6)

(6)

(6)

(7)

(6)

(6)

(6)


Downstream

(1,422)

(894)

(906)

(804)

(737)

(739)

(651)

(660)


Corporate

(527)

(349)

(395)

(435)

(16)

(17)

(32)

(41)


Consolidation Entries

32

32

32

32

33

32

33

32


Depreciation and amortization

(6,156)

(5,168)

(4,193)

(4,619)

(4,110)

(3,157)

(3,622)

(3,384)


Upstream

(9,402)

(15,080)

(6,703)

(17,949)

(47,845)

(16,585)

(7,943)

(6,182)


Midstream – Refining

15,684

(1,201)

17,314

14,894

9,504

11,998

12,056

(74)


Midstream – Liquefaction

(4,574)

(3,980)

(4,309)

(2,604)

(2,114)

(4,970)

(360)

(911)


Downstream

3,621

1,146

2,306

4,491

2,643

(325)

3,719

671


Corporate

7,616

(473)

11,275

3,463

3,381

(5,398)

1,796

3,544


Consolidation Entries

252

(190)

3,657

(1,596)

(401)

908

(1,435)

(190)


Net profit/(loss) per segment

13,197

(19,778)

23,540

699

(34,832)

(14,372)

7,833

(3,142)



InterOil Corporation is developing a vertically integrated energy business whose primary focus is Papua New Guinea and the surrounding region.  InterOil's assets consist of petroleum licenses covering about 3.9 million acres, an oil refinery, and retail and commercial distribution facilities, all located in Papua New Guinea.  In addition, InterOil is a shareholder in a joint venture established to construct an LNG plant in Papua New Guinea.

InterOil's common shares trade on the NYSE in US dollars.  

FOR INVESTOR RELATIONS ENQUIRIES:



Wayne Andrews

Meg LaSalle

V. P. Capital Markets

Investor Relations Coordinator

Wayne.Andrews@InterOil.com

Meg.LaSalle@InterOil.com

The Woodlands, TX USA

The Woodlands, TX USA

Phone: 281-292-1800

Phone: 281-292-1800



Forward Looking Statements

This press release includes "forward-looking statements" as defined in United States federal and Canadian securities laws. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the InterOil expects, believes or anticipates will or may occur in the future are forward-looking statements, including in particular further seismic-related exploration activities, development activities, the potential execution of definitive LNG supply agreements , the ability to attract a strategic LNG partner, the construction and development of the proposed LNG project and condensate stripping project, anticipated financial conditions and performance, business prospects, strategies, regulatory developments, the ability to obtain financing on acceptable terms, the ability to identify drilling locations and the ability to develop reserves and production through development and exploration activities. Statements relating to 'resources' are forward looking, as they involve the applied assessment, based on certain estimates and assumptions, that the resources described exist in the quantities estimated. These statements are based on certain assumptions made by the Company based on its experience and perception of current conditions, expected future developments and other factors it believes are appropriate in the circumstances. No assurances can be given however, that these events will occur. Actual results will differ, and the difference may be material and adverse to the Company and its shareholders. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause our actual results to differ materially from those implied or expressed by the forward-looking statements. Some of these factors include the risk factors discussed in the Company's filings with the Securities and Exchange Commission and on SEDAR, including but not limited to those in the Company's Annual Report for the year ended December 31, 2011 on Form 40-F and its Annual Information Form for the year ended December 31, 2011. In particular, there is no established market for natural gas or gas condensate in Papua New Guinea and no guarantee that gas or gas condensate from the Elk and Antelope fields will ultimately be able to be extracted and sold commercially.

Investors are urged to consider closely the disclosure in the Company's Form 40-F, available from us at www.interoil.com or from the SEC at www.sec.gov and its and its Annual Information Form available on SEDAR at www.sedar.com.

SOURCE InterOil Corporation



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