InterOil Announces Increased Gas Flow Rate at Elk-4 Well in Papua New Guinea

Monday, August 25th 2008

InterOil Corporation, a Canadian company with operations in Papua New Guinea advises that acid stimulation at the Elk-4 well has resulted in a significant increase in its test gas flow rate. The well was tested at 86 million standard cubic feet (mmscf) per day, an increase of approximately 36.5%.

Based on the condensate ratio measured earlier, the well was tested as able to produce at an estimated 18 barrels of condensate per million cubic feet which would equate to 1,540 bbls per day and is consistent with the estimated rate of 18 barrels per mmscf produced during previous testing at the Elk-4.

“We are exceptionally pleased with these test results obtained from the Antelope structure in the Elk-4 well confirming improved deliverability. The Elk-4 well on test, has recorded the second highest gas flow rate for a well in Papua New Guinea. These latest results are very encouraging as we prepare to drill the Antelope-1 well. Decommissioning at the Elk-4 well site has commenced and the rig will be mobilized to the Antelope-1 well which is targeted for drilling in the 4th quarter of 2008,” said Mr. Phil Mulacek, Chairman and CEO of InterOil.

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 8.7 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 Papua New Guinea’s first LNG plant on a site adjacent to InterOil’s refinery in Port Moresby.

InterOil’s common shares trade on the Toronto Stock Exchange under the symbol IOL in Canadian dollar and on the American Stock Exchange under the symbol IOC in US dollars.