InterOil Announces 2012 Third Quarter Financial and Operating Results

InterOil Announces 2012 Third Quarter Financial and Operating Results 
PORT MORESBY, Papua New Guinea and HOUSTON, Nov. 15, 2012 /CNW/ - InterOil 
Corporation (NYSE:IOC) (POMSoX:IOC) today announced financial and operating 
results for the third quarter ended September 30, 2012 and also certain recent 
developments. 
Third Quarter 2012 Highlights and Recent Developments 


    --  Net profit for the quarter ended September 30, 2012 was $5.3
        million. Operating segments of Corporate, Midstream Refining
        and Downstream collectively derived a net profit for the
        quarter of $16.8 million, while the investments in the
        development segments of Upstream and Midstream Liquefaction
        resulted in a net loss of $11.5 million.
    --  After successfully running and cementing 13 3/8 inch casing at
        3,632 feet (1,107 meters) at Antelope-3, InterOil's rig 2 has
        drilled the well to a depth of 5,013 feet (1,528 meters).
        Forward plan is to drill to the top of the Antelope reservoir
        estimated at 5,545 feet (1,690 meters) and then continue on to
        total depth of 8,366 feet (2,550 meters), followed by wireline
        logging, rotary sidewall coring and drill stem testing.
    --  Rig 3 is being mobilized to the Elk-3 drilling location. With
        access roads from both the north and the south and a central
        upstream development camp in place, InterOil is set to begin
        drilling the second of two obligation wells in Petroleum
        Retention License (PRL) 15. The Company's Tuna and Wahoo/Mako
        prospects, targeting seismically defined reefal indications, in
        PPLs 236 and 238 have matured to the drill ready stage and
        preparations to access to the proposed drilling locations are
        underway.
    --  Subsequent to quarter end, on October 16, 2012, the Company
        entered into a five year amortizing $100 million secured term
        loan facility with BNP Paribas Singapore, Bank South Pacific
        Limited, and Australia and New Zealand Banking Group (PNG)
        Limited which was used to repay indebtedness under the OPIC
        loan, with the remaining amount to be used for general
        corporate purposes. The loan is secured by the assets of the
        refinery and bears interest at LIBOR plus 6.5%.

InterOil's Chief Executive Officer Phil Mulacek commented, "We are pleased 
with the progress in our negotiations with the Government of PNG related to 
our proposal to develop a 3.8 million tonne per annum LNG project in the Gulf 
Province."

As to the Antelope-3 well, Mr. Mulacek noted that, "We are very encouraged by 
the progress in drilling the Antelope-3 well to near the top of the reservoir. 
This well is expected to further appraise our resourses.

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

Net profit for the quarter ended September 30, 2012 was $5.3 million compared 
with a net loss of $19.8 million for the same period in 2011, an increase of 
$25.1 million.  Operating segments of Corporate, Midstream Refining and 
Downstream collectively derived a net profit for the quarter of $16.8 million, 
while the investments in the development segments of Upstream and Midstream 
Liquefaction resulted in a net loss of $11.5 million during the quarter.

The improvement in net profit for the quarter was mainly due to a $29.4 
million increase in gross margin attributable to the positive crude oil and 
refined product price movements during the quarter and higher margins from 
export cargos, among other items.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for 
the quarter ended September 30, 2012 was a gain of $19.0 million versus a loss 
of $11.5 million for the same period in 2011.

Total revenues increased by $45.0 million from $281.9 million in the quarter 
ended September 30, 2011 to $326.9 million in the third quarter of 2012, 
primarily due to higher sales volumes during the period. The total volume of 
all products sold by us was 2.2 million barrels for quarter ended September 
30, 2012, compared with 1.8 million barrels in the same quarter of 2011.

Business Segment Results as of September 30, 2012

Upstream - On July 27, 2012, InterOil executed a farm in agreement with 
Pacific Rubiales Energy Corp. ("PRE") for PRE to be able to earn a 10.0% net 
(12.9% gross) participating interest in the PPL 237 onshore Papua New Guinea, 
including the Triceratops structure located within that license.  Rig release 
from the Triceratops-2 well was received from PNG Department of Petroleum & 
Energy on August 13, 2012.  The Triceratops-2 well has been suspended as a new 
discovery for recompletion at a later date as a future production well.  
Demobilization of Rig 2 began immediately for relocation to the Antelope-3 
location.  As of September 30, 2012, PRE has paid $40.0 million of the $116 
million of staged up-front cash payments. Planning of new seismic and drilling 
location is in progress, and will be finalized once the remapping is complete.

The Antelope-3 well was spud on September 30, 2012. Subsequent to the quarter 
end, the well was drilled to a depth of 3,642 feet, (1,110 meters), at which 
depth the 13 ¾ inch casing was set and cemented. Following which, drilling 
resumed with a 12 ¼ inch bit to the current depth of 5,013 feet (1,528 
meters). Forward plan is to drill to the top of the Antelope reservoir 
estimated at 5,545 feet (1,690 meters), set the second casing string and then 
continue on to total depth of 8,366 feet (2,550 meters), followed by wireline 
logging, rotary sidewall coring and drill stem testing.

Pre-spud preparation at the Elk-3 delineation well site is nearing completion. 
We have begun mobilization of our Rig 3 to the field. All components of Rig 3 
have shipped out of Port Moresby by barge to Hou Creek. The objective of the 
Elk-3 delineation well is to test the Early Miocene to Late Oligocene 
limestone section above the gas water contact in the Elk fault block.  The 
Early Miocene to Late Oligocene interval in the Elk-2 well was comprised of 
shallow marine and reefoid facies below the gas water contact.  This lower 
interval exhibited better porosity and permeability than the shallower facies 
penetrated in the upper reservoir.

Our Hou Creek northern wharf and field access roadway are progressing to 
completion, and a permanent camp location is under construction. The wharf and 
crane are functioning and ready to accept materials and equipment. InterOil 
has also completed the upstream field development camp near the Antelope-3 
wellsite and drilling crews are utilizing those accommodations.

InterOil's Upstream business realized a net loss of $10.9 million in the third 
quarter of 2012 compared to a net loss of $15.1 million in the comparable 
period a year ago. The decrease in the loss in 2012 was mainly due to reduced 
exploration costs incurred for seismic activity coupled with an increase in 
gain on the sale of oil and gas properties due to the gain recognized on sale 
of interest in PPL 237 to PRE. The positive variance was partially offset by 
higher interest expense due to an increase in inter-company loan balances.

Midstream Refining – Total refinery throughput for the quarter ended 
September 30, 2012 was 23,980 barrels per operating day, compared with 23,797 
barrels per operating day during quarter ended September 30, 2011.

Capacity utilization of the refinery for the quarter ended September 30, 2012, 
based on 36,500 barrels per day operating capacity, was 61% compared with 56% 
for the same quarter in 2011.  During the quarters ended September 30, 2012 
and 2011, our refinery was shut down for 9 days and 15 days, respectively, for 
general maintenance activities.

Subsequent to quarter end, on October 16, 2012, the Company entered into a 
five year amortizing $100 million secured term loan facility with BNP Paribas 
Singapore, Bank South Pacific Limited, and Australia and New Zealand Banking 
Group (PNG) Limited.  On November 9, 2012, borrowings under the facility were 
used to repay all outstanding amounts under the term loan granted by OPIC and 
the remaining funds will be used for general corporate purposes.  The loan is 
secured by the assets of the refinery and bears interest at LIBOR plus 6.5%.

The Company's Midstream Refining operations generated a net profit of $5.4 
million in the third quarter of 2012 versus a loss of $1.2 million in the 
prior year period. The positive variance is largely due to an improvement in 
gross margin resulting from improved crude oil and refined product prices, 
which were partially offset by higher derivative losses incurred for commodity 
contracts settled during the periods, a decrease in foreign exchange gains and 
increased income tax expense.

Midstream Liquefaction – Following receipt of the required PNG Government 
approvals, InterOil believes it will be able to conclude the LNG partnering 
process. We have made significant progress with FEED engineering studies, 
construction of roads and camps, social mapping and genealogical studies, 
which will assist in the partnering and execution of the project.

The Company's Midstream Liquefaction business generated a net loss of $0.6 
million in the third quarter of 2012 compared with a loss of $4.0 million in 
the same period a year ago. The positive variance is largely due to a decrease 
in office, administration and other expenses related to the midstream 
facilities of the LNG Project development which are not capitalized.

Downstream - Total Downstream sales volumes for the quarter ended September 
30, 2012 were 185.0 million litres, an increase of 22.5 million litres, or 
13.8%, over the same quarter in 2011.

We believe that the PNG economy remains strong with continued robust activity 
in the resource sector although this is tempered by certain construction 
projects for the ExxonMobil LNG project now nearing an end.  For this reason 
and with the completion of many construction projects in the commercial office 
and residential sectors, it is believed that demands will flatten in the short 
term for diesel and jet A1.

Our retail business sector continues to grow with the roll out of new 
electronic systems for our retail pumps and truck stops, and it is our 
intention to start operating our first retail site during the fourth quarter 
2012.

InterOil's Downstream operations generated a net profit of $5.6 million in the 
third quarter of 2012, an improvement of $4.5 million versus a profit of $1.1 
million in the previous year.  The positive variance is largely due to an 
increase in gross margins mainly due to an increase in domestic sales volumes, 
which was partially offset by reduced foreign exchange gains and increased 
income tax expense.

Corporate – The Corporate segment generated a net profit of $7.8 million in 
the third quarter of 2012, compared to a net loss of $0.5 million in the same 
period of 2011. The positive variance is largely the result of a decreased 
loss on FLEX LNG investment, a decrease in office and administration expense, 
and higher interest income, which was partially offset by a decrease in 
inter-segment recharges.

Summary of Consolidated Quarterly Financial Results for Past Eight Quarters

Quarters      2012                          2011                                    2010
ended

($ thousands  Sep-30    Jun-30    Mar-31    Dec-31    Sep-30    Jun-30    Mar-31    Dec-31
except per
share data)

Upstream      2,216     1,727     2,284     1,891     2,645     4,638     668       245

Midstream
–       274,671   236,006   302,310   237,640   231,455   262,111   217,743   158,092
Refining

Midstream
–       -         -         -         -         -         -         -         -
Liquefaction

Downstream    201,749   223,620   218,974   209,678   186,304   191,431   157,709   143,364

Corporate     26,880    24,742    24,757    21,831    25,078    26,548    18,659    15,213

Consolidation (178,652) (186,990) (210,174) (181,428) (163,584) (180,945) (151,125) (122,545)
entries

Total         326,864   299,105   338,151   289,612   281,898   303,783   243,654   194,369
revenues

Upstream      956       (5,730)   (6,374)   665       (6,169)   593       (10,957)  (41,681)

Midstream
–       13,417    (42,647)  18,933    2,604     3,461     27,967    26,632    13,780
Refining

Midstream
–       11        676       (1,406)   (4,123)   (3,602)   (4,035)   (2,375)   (1,959)
Liquefaction

Downstream    9,275     11,102    21,414    6,808     3,570     5,777     8,744     4,709

Corporate     9,841     9,975     9,188     10,134    1,548     13,940    5,223     4,566

Consolidation (14,503)  (9,871)   (14,216)  (11,280)  (10,263)  (5,269)   (9,200)   (7,004)
entries

EBITDA ((1))  18,997    (36,495)  27,539    4,808     (11,455)  38,973    18,067    (27,589)

Upstream      (10,936)  (15,532)  (17,244)  (9,402)   (15,080)  (6,703)   (17,949)  (47,845)

Midstream
–       5,358     (32,969)  11,320    15,684    (1,201)   17,314    14,894    9,504
Refining

Midstream
–       (573)     93        (1,969)   (4,574)   (3,980)   (4,309)   (2,604)   (2,114)
Liquefaction

Downstream    5,626     6,045     13,195    3,621     1,146     2,306     4,491     2,643

Corporate     7,849     8,445     6,270     7,616     (473)     11,275    3,463     3,381

Consolidation (1,988)   2,205     (2,136)   252       (190)     3,657     (1,596)   (401)
entries

Net profit/   5,336     (31,713)  9,436     13,197    (19,778)  23,540    699       (34,832)
(loss)

Net profit/
(loss) per
share
(dollars)

Per Share     0.11      (0.66)    0.20      0.27      (0.41)    0.49      0.01      (0.76)
– Basic

Per Share
–       0.11      (0.66)    0.19      0.27      (0.41)    0.48      0.01      (0.76)
Diluted

 __________________________________________________________________
|(1)|EBITDA is a non-GAAP measure, please refer to "Non-GAAP EBITDA|
|   |Reconciliation" in this press release.                        |
|___|______________________________________________________________|

Balance Sheet and Liquidity InterOil closed the third quarter ended September 
30, 2012 with cash, cash equivalents and cash restricted totaling $96.9 
million (September 30, 2011 - $144.4 million), of which $39.6 million is 
restricted (September 30, 2011 - $30.1 million).

We also had aggregate working capital facilities of $307.3 million, with $21.1 
million available for use in our Midstream Refining operations, and $49.4 
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 13.0% as of September 30, 2012 which compares to 
12.7% as of September 30, 2011.

Subsequent to the close of the third quarter, on October 16, 2012, we entered 
into a five year amortizing $100 million secured term loan facility with BNP 
Paribas Singapore, Bank South Pacific Limited, and Australia and New Zealand 
Banking Group (PNG) Limited.  On November 9, 2012, borrowings under the 
facility were used to repay all outstanding amounts under the term loan 
granted by OPIC, and the remaining funds will be used for general corporate 
purposes. The loan is secured by the assets of the refinery and bears interest 
at LIBOR plus 6.5%.

Summary of Debt Facilities Summarized below are the debt facilities available 
to us and the balances outstanding as at September 30, 2012.


                         Balance
Organization    Facility     outstanding   Effective     Maturity date 
                                       interest rate 


                             Sept 31, 2012

OPIC secured    $31,000,000  $31,000,000   7.06%         December 2015
loan ((1))

BNP Paribas                  $69,174,302 (
working capital $240,000,000 (2))          2.70%         January 2013
facility

Westpac PGK
working capital
facility        $43,245,000  $10,898,580   10.0%         November 2014

facility

BSP PGK working
capital         $24,025,000  $7,003,404    9.95%         August 2013
facility

Westpac secured $12,857,000  $12,857,000   4.77%         September 2015
loan

2.75%
convertible     $70,000,000  $70,000,000   7.91%((3))    November 2015
notes

Mitsui                                                   See detail
unsecured loan  $11,912,297  $11,912,297   6.25%         below
((4))

 _____________________________________________________________________
|   |                                                                 |
|___|_________________________________________________________________|
|   |Subsequent to the end of the quarter we entered into a new $100  |
|(1)|million loan facility and on November 9,2012, used a portion of  |
|   |the proceeds from this facility to repay all amounts under the   |
|   |OPIC facility                                                    |
|___|_________________________________________________________________|
|   |Excludes letters of credit totaling 149.7 million, which reduce  |
|(2)|the available balance of the facility to $21.1 million at        |
|   |September 30, 2012.                                              |
|___|_________________________________________________________________|
|   |Effective rate after bifurcating the equity and debt components  |
|(3)|of the $70 million principal amount of 2.75% convertible senior  |
|   |notes due 2015.                                                  |
|___|_________________________________________________________________|
|   |Facility is to fund our share of the Condensate Stripping Project|
|(4)|costs as they are incurred pursuant to the JVOA with Mitsui ("CSP|
|   |JVOA").                                                          |
|___|_________________________________________________________________|
|   |                                                                 |
|___|_________________________________________________________________|

InterOil Corporation

Consolidated Income Statements

(Unaudited, Expressed in United States dollars)
                   Quarter ended               Nine months ended
                   September 30, September 30, September 30, September 30,
                   2012          2011          2012          2011
                   $             $             $             $



Revenue

Sales and          324,109,090   278,499,694   956,335,547   819,484,250
operating revenues

Interest           23,381        368,768       226,360       952,421

Other              2,732,247     3,029,088     7,557,014     8,898,772
                   326,864,718   281,897,550   964,118,921   829,335,443



Changes in
inventories of     (35,607,503)  (31,631,324)  (6,263,770)   43,859,762
finished goods and
work in progress

Raw materials and  (250,722,505) (238,480,416) (896,694,438) (787,256,505)
consumables used

Administrative and (11,213,365)  (11,809,956)  (31,174,931)  (33,119,377)
general expenses

Derivative         (4,929,234)   1,914,207     (4,715,186)   1,498,275
(losses)/gains

Legal and          (1,656,287)   (1,538,559)   (3,877,763)   (4,498,526)
professional fees

Exploration costs,
excluding
exploration        (2,056,367)   (6,568,147)   (14,660,051)  (16,636,215)
impairment (note
6)

Finance costs      (4,209,765)   (4,448,608)   (13,646,887)  (13,185,060)

Depreciation and   (5,435,498)   (5,168,473)   (15,449,807)  (13,980,789)
amortization

Gain on sale of
oil and gas        2,895,000     -             2,895,000     -
properties (note
11)

Loss on
available-for-sale -             (6,048,537)   -             (1,834,279)
investment

Foreign exchange   (3,495,353)   1,918,158     3,990,338     17,696,737
(losses)/gains
                   (316,430,877) (301,861,655) (979,597,495) (807,455,977)

Profit/(loss)
before income      10,433,841    (19,964,105)  (15,478,574)  21,879,466
taxes



Income taxes

Current tax        (2,561,068)   (116,517)     (11,623,696)  (4,488,623)
expense

Deferred tax       (2,537,251)   302,687       10,160,813    (12,930,404)
(expense)/benefit
                   (5,098,319)   186,170       (1,462,883)   (17,419,027)



Profit/(loss) for  5,335,522     (19,777,935)  (16,941,457)  4,460,439
the period



Profit/(loss) is
attributable to:

Owners of InterOil 5,335,522     (19,777,694)  (16,941,457)  4,454,238
Corporation

Non-controlling    -             (241)         -             6,201
interest
                   5,335,522     (19,777,935)  (16,941,457)  4,460,439



Basic profit/      0.11          (0.41)        (0.35)        0.09
(loss) per share

Diluted profit/    0.11          (0.41)        (0.35)        0.09
(loss) per share

Weighted average
number of common
shares outstanding

Basic (Expressed
in number of       48,445,397    47,993,229    48,271,469    47,936,721
common shares)

Diluted (Expressed
in number of       48,785,877    47,993,229    48,271,469    48,857,182
common shares)



See accompanying notes to the consolidated financial statements

InterOil Corporation

Consolidated Balance Sheets

(Unaudited, Expressed in United States dollars)
                                            As at
                              September 30, December 31,  September 30,
                              2012          2011          2011
                              $             $             $
    Assets

 Current assets:

 Cash and cash equivalents    57,291,559    68,846,441    114,330,510

 Cash restricted              33,610,455    32,982,001    23,543,921

 Short term treasury bills -  -             11,832,110    11,324,929
 held-to-maturity

 Trade and other receivables  149,852,154   135,273,600   105,377,991

 Derivative financial         -             595,440       413,093
 instruments

 Other current assets         906,644       867,967       755,309

 Inventories (note 5)         164,808,029   171,071,799   170,997,122

 Prepaid expenses             5,891,713     5,477,596     2,361,925

 Total current assets         412,360,554   426,946,954   429,104,800

 Non-current assets:

 Cash restricted              5,980,832     6,268,762     6,530,817

 Goodwill                     6,626,317     6,626,317     6,626,317

 Plant and equipment          251,556,473   246,043,948   237,330,322

 Oil and gas properties (note 472,077,713   362,852,766   330,346,730
 6)

 Deferred tax assets          47,585,649    35,965,273    742,379

 Available-for-sale           5,462,570     3,650,786     5,644,478
 investments

 Total non-current assets     789,289,554   661,407,852   587,221,043

 Total assets                 1,201,650,108 1,088,354,806 1,016,325,843

 Liabilities and
 shareholders' equity

 Current liabilities:

 Trade and other payables     172,929,668   159,882,177   91,957,476

 Income tax payable           9,592,164     4,085,137     2,883,220

 Derivative financial         371,143       11,457        318,736
 instruments

 Working capital facilities   87,076,286    16,480,503    48,085,248
 (note 7)

 Unsecured loan and current
 portion of secured loans     25,198,297    19,393,023    19,393,023
 (note 9)

 Current portion of Indirect
 participation interest (note 13,770,156    540,002       540,002
 10)

 Total current liabilities    308,937,714   200,392,299   163,177,705

 Non-current liabilities:

 Secured loans (note 9)       30,238,125    26,037,166    30,481,180

 2.75% convertible notes      58,175,245    55,637,630    54,816,599
 liability

 Deferred gain on             746,834       5,810,775     7,263,210
 contributions to LNG project

 Indirect participation       20,904,686    34,134,840    34,134,387
 interest (note 10)

 Other non-current            20,000,000    -             -
 liabilities (note 11)

 Asset retirement obligations 4,947,101     4,562,269     4,289,444

 Deferred tax liabilities     -             1,889,391     -

 Total non-current            135,011,991   128,072,071   130,984,820
 liabilities

 Total liabilities            443,949,705   328,464,370   294,162,525

 Equity:

 Equity attributable to
 owners of InterOil
 Corporation:

 Share capital (note 12)      927,913,817   905,981,614   902,114,261

 Authorized - unlimited

 Issued and outstanding -
 48,587,461

 (Dec 31, 2011 - 48,121,071)

 (Sep 30, 2011 - 48,000,131)

 2.75% convertible notes      14,298,036    14,298,036    14,298,036

 Contributed surplus          20,107,937    25,644,245    24,552,456

 Accumulated Other            27,736,411    29,380,882    24,164,391
 Comprehensive Income

 Conversion options           12,150,880    12,150,880    12,150,880

 Accumulated deficit          (244,506,678) (227,565,221) (255,143,006)

 Total equity attributable to
 owners of InterOil           757,700,403   759,890,436   722,137,018
 Corporation

 Non-controlling interest     -             -             26,300

 Total equity                 757,700,403   759,890,436   722,163,318

 Total liabilities and equity 1,201,650,108 1,088,354,806 1,016,325,843

See accompanying notes to the consolidated financial statements

InterOil Corporation

Consolidated Statements of Cash Flows

(Unaudited, Expressed in United States dollars)
                    Quarter ended             Nine months ended
                    September    September    September 30, September 30,
                    30,          30,
                    2012         2011         2012          2011
                    $            $            $             $



Cash flows
generated from
(used in):



Operating
activities

Net profit/(loss)   5,335,522    (19,777,935) (16,941,457)  4,460,439
for the period

Adjustments for
non-cash and
non-operating
transactions

Depreciation and    5,435,498    5,168,473    15,449,807    13,980,789
amortization

Deferred tax        2,872,882    (66,555)     (13,509,767)  13,355,749

Gain on sale of     (2,895,000)  -            (2,895,000)   -
exploration assets

Accretion of
convertible notes   858,478      808,915      2,537,615     2,391,110
liability

Amortization of
deferred financing  36,986       55,986       129,959       167,958
costs

Timing difference
between derivatives
recognized

and settled         1,122,929    (89,857)     955,126       (272,935)

Stock compensation
expense, including  2,112,932    4,029,821    5,777,472     11,728,248
restricted stock

Movement in
inventory write     (24,636,489) (3,255,318)  -             3,417,882
down

Accretion of asset
retirement          82,774       79,678       248,322       79,678
obligation
liability

Oil and gas         2,056,367    6,568,147    14,660,051    16,636,215
properties expensed

Loss on Flex LNG    -            6,048,537    -             1,834,279
investment

Unrealized foreign
exchange loss/      22,277       (3,763,825)  (876,631)     (1,847,242)
(gain)

Change in operating
working capital

(Increase)/decrease
in trade and other  (31,466,298) 4,515,067    (23,460,485)  (35,290,574)
receivables

Decrease/(increase)
in other current    2,360,590    637,017      (452,794)     981,399
assets and prepaid
expenses

Decrease/(increase) 59,593,399   35,072,018   4,014,645     (37,484,446)
in inventories

Increase in trade   6,708,330    13,422,313   6,017,991     23,754,298
and other payables

Net cash generated
from/(used in)      29,601,177   49,452,482   (8,345,146)   17,892,847
operating
activities



Investing
activities

Expenditure on oil  (46,034,941) (35,025,246) (149,275,108) (98,420,370)
and gas properties

Proceeds from IPI   -            91,138       3,497,542     91,138
cash calls

Expenditure on      (12,526,263) (10,442,871) (26,026,273)  (23,691,596)
plant and equipment

Proceeds from
Pacific Rubiales    -            -            20,000,000    -
Energy (conveyance
accounted portion)

Maturity of short   -            (11,324,929) 11,832,110    (11,324,929)
term treasury bills

Acquisition of Flex
LNG Ltd shares,     -            -            -             (7,478,756)
including
transaction costs

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

borrowings          906,997      6,453,266    (340,524)     17,203,331

Change in
non-operating
working capital

Increase in trade
and other           -            (10,000,000) -             (10,000,000)
receivables

Increase/(decrease)
in trade and other  14,342,166   (916,001)    22,892,495    (10,763,171)
payables

Net cash used in
investing           (43,312,041) (61,164,643) (117,419,758) (144,384,353)
activities



Financing
activities

Repayments of OPIC  -            -            (4,500,000)   (4,500,000)
secured loan

Proceeds from
Mitsui for          3,578,489    551,562      3,578,489     9,872,532
Condensate
Stripping Plant

Proceeds from
Westpac secured     -            -            15,000,000    -
loan

Repayments of
Westpac secured     (2,143,000)  -            (2,143,000)   -
loan

Proceeds from
Pacific Rubiales    20,000,000   -            20,000,000    -
Energy for interest
in PPL237

Proceeds from
working capital     24,188,225   (45,633,592) 70,595,783    (3,169,078)
facility

Proceeds from issue
of common shares,   4,757,023    192,550      10,618,423    2,549,000
net of transaction
costs

Net cash generated
from financing      50,380,737   (44,889,480) 113,149,695   4,752,454
activities



Increase/(decrease)
in cash and cash    36,669,873   (56,601,641) (12,615,209)  (121,739,052)
equivalents

Cash and cash
equivalents,        20,623,574   168,439,410  68,846,441    233,576,821
beginning of period

Exchange gains on
cash and cash       (1,888)      2,492,741    1,060,327     2,492,741
equivalents

Cash and cash
equivalents, end of 57,291,559   114,330,510  57,291,559    114,330,510
period

Comprising of:

Cash on Deposit     56,656,729   23,684,485   56,656,729    23,684,485

Term Deposits       634,830      90,646,025   634,830       90,646,025

Total cash and cash
equivalents, end of 57,291,559   114,330,510  57,291,559    114,330,510
period



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.

Quarters      2012                       2011                               2010
ended


          Sep-30   Jun-30   Mar-31   Dec-31   Sep-30   Jun-30  Mar-31   Dec-31
($ thousands) 
Upstream      956      (5,730)  (6,374)  665      (6,169)  593     (10,957) (41,681) 
Midstream
–       13,417   (42,647) 18,933   2,604    3,461    27,967  26,632   13,780
Refining 
Midstream
–       11       676      (1,406)  (4,123)  (3,602)  (4,035) (2,375)  (1,959)
Liquefaction 
Downstream    9,275    11,102   21,414   6,808    3,570    5,777   8,744    4,709 
Corporate     9,841    9,975    9,188    10,134   1,548    13,940  5,223    4,566 
Consolidation (14,503) (9,871)  (14,214) (11,280) (10,263) (5,270) (9,200)  (7,004)
Entries 
Earnings
before
interest,
taxes,        18,997   (36,495) 27,541   4,808    (11,455) 38,972  18,067   (27,589)
depreciation
and
amortization 
Subtract: 
Upstream      (11,438) (10,517) (9,408)  (8,712)  (7,806)  (7,142) (6,352)  (5,481) 
Midstream
–       (1,654)  (2,011)  (2,771)  (3,285)  (2,494)  (2,211) (1,675)  (1,509)
Refining 
Midstream
–       (584)    (579)    (559)    (445)    (372)    (268)   (223)    (184)
Liquefaction 
Downstream    (394)    (909)    (1,233)  (1,170)  (1,233)  (1,116) (826)    (835) 
Corporate     (1,540)  (1,535)  (1,510)  (1,498)  (1,477)  (1,641) (1,395)  (1,158) 
Consolidation 12,482   12,044   12,045   11,500   10,041   8,894   7,572    6,571
Entries 
Interest      (3,128)  (3,507)  (3,436)  (3,610)  (3,341)  (3,484) (2,899)  (2,596)
expense 
Upstream      -        -        -        -        -        -       -        - 
Midstream
–       (3,484)  14,580   (1,948)  19,243   678      (5,677) (7,298)  (65)
Refining 
Midstream
–       -        -        -        -        -        -       -        36
Liquefaction 
Downstream    (1,791)  (2,907)  (5,746)  (595)    (297)    (1,449) (2,623)  (495) 
Corporate     177      535      (880)    (493)    (195)    (629)   71       (11) 
Consolidation -        -        -        -        -        -       -        (2)
Entries 
Income taxes  (5,098)  12,208   (8,574)  18,155   186      (7,755) (9,850)  (537) 
Upstream      (454)    715      (1,462)  (1,355)  (1,105)  (154)   (641)    (683) 
Midstream
–       (2,921)  (2,891)  (2,894)  (2,878)  (2,846)  (2,764) (2,765)  (2,700)
Refining 
Midstream
–       0        (4)      (4)      (6)      (6)      (6)     (6)      (7)
Liquefaction 
Downstream    (1,464)  (1,241)  (1,240)  (1,422)  (894)    (906)   (804)    (737) 
Corporate     (629)    (530)    (528)    (527)    (349)    (395)   (435)    (16) 
Consolidation 33       32       33       32       32       32      32       33
Entries 
Depreciation
and           (5,435)  (3,919)  (6,095)  (6,156)  (5,168)  (4,193) (4,619)  (4,110)
amortisation 
Upstream      (10,936) (15,532) (17,244) (9,402)  (15,080) (6,703) (17,949) (47,845) 
Midstream
–       5,358    (32,969) 11,320   15,684   (1,201)  17,314  14,894   9,504
Refining 
Midstream
–       (573)    93       (1,969)  (4,574)  (3,980)  (4,309) (2,604)  (2,114)
Liquefaction 
Downstream    5,626    6,045    13,195   3,621    1,146    2,306   4,491    2,643 
Corporate     7,849    8,445    6,270    7,616    (473)    11,275  3,463    3,381 
Consolidation (1,988)  2,205    (2,136)  252      (190)    3,657   (1,596)  (401)
Entries 
Net profit/
(loss) per    5,336    (31,713) 9,436    13,197   (19,778) 23,540  699      (34,832)
segment 
About 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 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. 
________________________________________________________________________________________________________________________
___________________________________________________________________________________________
|Investor Contacts for InterOil                                                                                          
                                                                                        |
|_______________________________________________________________________________________________________________________
____________________________________________________________________________________________|
|Wayne Andrews                                                                                              |Meg 
LaSalle                                                                                            |
|___________________________________________________________________________________________________________|___________
____________________________________________________________________________________________|
|Vice President Capital Markets                                                                             |Investor 
Relations Coordinator                                                                         |
|___________________________________________________________________________________________________________|___________
____________________________________________________________________________________________|
|Wayne.Andrews@InterOil.com|Meg.LaSalle@InterOil.com|
|___________________________________________________________________________________________________________|___________
____________________________________________________________________________________________|
|The Woodlands, TX USA                                                                                      |The 
Woodlands, TX USA                                                                                  |
|___________________________________________________________________________________________________________|___________
____________________________________________________________________________________________|
|Phone: +1-281-292-1800                                                                                     |Phone: +1-281-292-1800                                                                                 |
|___________________________________________________________________________________________________________|___________
____________________________________________________________________________________________| 
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 drilling plans, objectives 
of drilling plans, timing of drilling plans, further testing of wells, 
development activities including plans to deploy InterOil's rigs, the 
development of the proposed LNG processing facility, the ability to attract a 
strategic LNG partner, timing and success of the LNG partnering process, 
approval by the PNG Government of InterOil's LNG project, satisfaction of the 
State of InterOil's development plans and satisfaction of the terms of the 
2009 LNG Project Agreement with the State, benefits to stakeholders, the 
relationship with PRE, characteristics of our resources, completion of the 
farm-in transaction with PRE, satisfaction and timing of conditions to 
completion of the farm-in transaction with PRE, timing of FEED on the 
liquefaction facilities, the economic conditions of PNG and demand for 
InterOil's products, growth of InterOil's retail business sector and timing of 
such growth, initiatives and timing of such initiatives, 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. These statements 
are based on certain assumptions made by the Company based on its experience 
and perception of current conditions, expected future developments, agreements 
with third parties, bids received in respect of the LNG partnering process 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, 
Antelope and Triceratops 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 Annual Information Form available on SEDAR at www.sedar.com. 
http://www.interoil.com 
SOURCE: InterOil Corporation 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2012/15/c8413.html 
CO: InterOil Corporation
ST: Texas
NI: OIL UTI ERN EST ERN  
-0- Nov/15/2012 12:06 GMT