Concerned InterOil Shareholders Demand Disclosure and Halt to Possible Asset Sales Prior to Annual Meeting

HOUSTON, May 9, 2016 /PRNewswire/ - The founding shareholder, former chairman and Chief Executive Officer of InterOil Corporation ("InterOil" or the "Company") (NYSE:IOC), Phil Mulacek, and Petroleum Independent & Exploration, LLC (together, the "Concerned InterOil Shareholders"), demand that the board of directors of InterOil (the "Board") disclose important information about possible transactions the Company is considering in advance of the annual and special meeting of shareholders of InterOil to be held on June 14, 2016 (the "AGM"), and halt consideration and closing of any such transactions prior to the AGM, where shareholders will vote on a proposal (the "Transaction Approval Resolution") to request the Board to seek advance shareholder approval of such transactions. The Transaction Approval Resolution is one of a number of corporate governance proposals (the "Proposals") which were included in the requisition (the "Requisition") of the Concerned InterOil Shareholders dated March 21, 2016 for a special meeting of the shareholders of InterOil.

The Concerned InterOil Shareholders were disturbed recently to learn that the Board may be pursuing sales of assets of the Company in advance of the vote on the Transaction Approval Resolution at the AGM.  The Concerned InterOil Shareholders understand that InterOil is considering several possible transactions, including possible sale to a Japanese investor group of an approximately 4% gross license interest in petroleum retention license 15 ("PRL 15"), which covers the Company's primary asset, the Elk and Antelope fields in Papua New Guinea; possible sale of InterOil's entire 36.5% gross license interest in PRL 15; possible sale of all of the Company's interests in licenses other than PRL 15, including petroleum retention license 39 covering the Triceratops field discovery and all petroleum prospecting licenses for exploration; or possible sale or merger of the Company as a whole.  The Concerned InterOil Shareholders were also surprised that the Board would consider a possible sale of assets at the bottom of the market, especially since the Company's recent public disclosures have claimed that the Company's balance sheet is strong.

Important corporate governance matters are on the agenda to be settled at the AGM, including the Transaction Approval Resolution, which gives shareholders the right to vote to approve transactions that affect over 10% in value of the Company's assets, which would include any of the possible sales noted above.  InterOil's Notice of Annual and Special Meeting and Management Information Circular dated April 25, 2016 (the "2016 InterOil Proxy Statement") solicits shareholders' proxies to vote against the Transaction Approval Resolution and all other Proposals, but does not mention that a potential transaction that would be affected by the Transaction Approval Resolution may currently be underway.  The Concerned InterOil Shareholders believe that such information is highly relevant to permit the shareholders to fully evaluate the Transaction Approval Resolution and that without such information, the 2016 InterOil Proxy Statement fails to give shareholders adequate disclosure.  The Concerned InterOil Shareholders also believe that closing any such sale before the shareholders have had an opportunity to voice their opinion at the AGM and vote on the Proposals would be a breach of the Board's responsibilities to shareholders and yet another example of the Board's disregard for the basic principles of good corporate governance. The Concerned InterOil Shareholders therefore demand that any such effort to dispose of assets be halted until after the AGM, and that the Company reissue the 2016 InterOil Proxy Statement with full disclosure that the Board is considering possible transactions that may be affected by the Transaction Approval Resolution.

The Concerned InterOil Shareholders are further disappointed that the Board continues to pursue transactions that will affect shareholder value without input from, and at the expense of, InterOil's shareholders.  If the Board is truly interested in promoting shareholder value, it should seek out value-accretive transactions.  For example, when Mr. Mulacek left the Board of InterOil in November 2013, the price of InterOil common stock was approximately US$85.00 per share, which implied a gas price for InterOil's interest in the Elk and Antelope fields of approximately $0.80 per mcfe based on an estimated field size of 10 tcfe.  To be value-accretive, therefore, any resource sale from the Elk and Antelope fields should carry an effective gas price significantly in excess of approximately $0.80 per mcfe. 

Advisors:

The Concerned InterOil Shareholders have retained Wildeboer Dellelce LLP and Taft Stettinius & Hollister LLP as its legal advisors, and Bayfield Strategy as its strategic communications advisor in connection with this matter.

About Phil Mulacek:

Mr. Mulacek is the founding shareholder of InterOil and served as chairman, CEO and a director until his retirement from the company in November, 2013.  During his tenure at the company, its market capitalization grew from approximately US$10 million (~ US$0.50/share) to over US$4.5 billion (~ US$92.00/share) at his departure.  The company also constructed the first petroleum refinery in Papua New Guinea, a 36,000 bpd facility at Napa Napa, with a fully integrated downstream business that contributed to support of the company.

Mr. Mulacek led InterOil's discovery of the world-class Elk and Antelope gas fields in the Gulf Province of Papua New Guinea, with approximately 10 to 15 tcfe of certified hydrocarbon resource, and the nearby Triceratops gas field, with approximately 1 tcfe of certified hydrocarbon resource.  These fields have been among the largest onshore discoveries in PNG and Asia recent years. 

Since retiring from InterOil in 2013, Mr. Mulacek has remained actively involved in the upstream oil and gas industry in Papua New Guinea, the US and elsewhere globally through his affiliated companies with offices in Singapore and branch offices in the United States.  He resides in Singapore.

Cautionary Statement Regarding Forward‐Looking Statements:

This press release contains forward‐looking statements. All statements contained in this filing that are not clearly historical in nature or that necessarily depend on future events are forward‐looking, and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward‐looking statements. These statements are based on current expectations of the Concerned InterOil Shareholders and currently available information.  They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove to be accurate. The Concerned InterOil Shareholders do not assume any obligation to update any forward‐looking statements contained in this press release.

Information Contact:

For additional information on this press release and a copy of the Requisition (including the Proposals), please contact the Concerned InterOil Shareholders at +1 (832) 510-7028, or by email at [email protected]

Media Contact:

Bayfield Strategy, Inc.

Riyaz Lalani

+1 (416) 907-9365

[email protected]

Information in Support of Public Broadcast Solicitation:

The Concerned InterOil Shareholders are relying on the exemption under section 9.2(4) of National Instrument 52‐102 ‐ Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.

This solicitation is being made by the Concerned InterOil Shareholders and not by or on behalf of the management of InterOil.

The address of InterOil is 163 Penang Road, Winsland House II, #06-02, Singapore, 238463.

The Concerned InterOil Shareholders have filed an information circular dated March 31, 2016 (the "Concerned InterOil Shareholders Circular") concerning the Requisition and the Proposals. The Concerned InterOil Shareholders Circular is available on InterOil's company profile on SEDAR at http://www.sedar.com and on the Concerned InterOil Shareholders website at http://www.concernedinteroilshareholders.com.  The Concerned InterOil Shareholders have also filed a statement of beneficial ownership on Form 13-D (the "Form 13-D"), as amended, with the U.S. Securities and Exchange Commission.  The Form 13-D also includes the Requisition as an Exhibit and is available at https://www.sec.gov/Archives/edgar/data/1221715/000114420416090986/v435587_sc13d.htm and on the Concerned InterOil Shareholders website at http://www.concernedinteroilshareholders.com.

The Concerned InterOil Shareholders intend to solicit proxies in support of the Proposals.  The Concerned InterOil Shareholders may solicit proxies, by mail, telephone, facsimile, email or other electronic means as well as by newspaper or other media advertising and in person by directors, officers and employees of the Concerned InterOil Shareholders who will not be specifically remunerated therefor. In addition, the Concerned InterOil Shareholders may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including press release, speech or publication, and by any other manner permitted under applicable Canadian laws. The Concerned InterOil Shareholders may engage the services of one or more agents and authorize other persons to assist them in soliciting proxies on behalf of the Concerned InterOil Shareholders.

At this time, the Concerned InterOil Shareholders have not entered into any agreement pursuant to which an agent has agreed that it will act as proxy agent for the Concerned InterOil Shareholders with respect to a formal solicitation of proxies. All costs incurred for the solicitation will be borne by the Concerned InterOil Shareholders.

A registered holder of common shares of InterOil that gives a proxy may revoke it: (a) by completing and signing a valid proxy bearing a later date and returning it in accordance with the instructions contained in the form of proxy to be provided by the Concerned InterOil Shareholders, or as otherwise provided in the proxy circular, once made available to shareholders; (b) by depositing an instrument in writing executed by the shareholder or by the shareholder's attorney authorized in writing, as the case may be: (i) at the registered office of InterOil at any time up to and including the last business day preceding the day of the AGM or the day of any adjournment or postponement of the AGM, or (ii) with the chairman of the AGM prior to its commencement on the day of the AGM or any adjournment or postponement of the AGM; or (c) in any other manner permitted by law.

A non‐registered holder of common shares of InterOil will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non‐registered holder by its intermediary. It should be noted that revocation of proxies or voting instructions by a non‐registered holder can take several days or even longer to complete and, accordingly, any such revocation should be completed well in advance of the deadline prescribed in the form of proxy or voting instruction form to ensure it is given effect in respect of the AGM.

Neither the Concerned InterOil Shareholders, nor any directors or officers, or any associates or affiliates of the foregoing, has: (i) any material interest, direct or indirect, in any transaction since the beginning of InterOil's most recently completed financial year or in any proposed transaction that has materially affected or would materially affect InterOil or any of its subsidiaries; or (ii) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter currently known to be acted on at the AGM, other than the Proposals set forth in the Requisition.

However, certain of the Concerned InterOil Shareholders are the beneficial holders of minority indirect participation interests in certain of InterOil's petroleum prospecting licenses and petroleum retention licenses in Papua New Guinea under indirect participation agreements with InterOil.  The Concerned InterOil Shareholders believe that these indirect participation interests are not material to InterOil but are nevertheless fully aligned and not in conflict with the interests of InterOil's shareholders.

SOURCE Petroleum Independent & Exploration, LLC