InterOil Announces 2013 First Quarter Financial And Operating Results

InterOil Announces 2013 First Quarter Financial And Operating Results 
PORT MORESBY, Papua New Guinea and HOUSTON, May 13, 2013 /CNW/ - InterOil 
Corporation (NYSE:IOC) (POMSoX:IOC) today announced financial and operating 
results for the first quarter ended March 31, 2013. 
First Quarter 2013 Highlights and Recent Developments 


    --  On January 24, 2013, the Minister for Petroleum & Energy
        approved and the DPE registered the transfer of interest in PPL
        237 to Pacific Rubiales Energy (PRE) and the related PRE JVOA.
        During the quarter, an application was submitted for a
        Petroleum Retention License over the Triceratops discovery. On
        March 13, 2013, the Farm-In Agreement with PRE was completed.
    --  On March 1, 2013, InterOil announced that its advisors have
        informed the Company that several bids to partner with InterOil
        in its Gulf LNG project have been received. Our investment
        banking advisors and the Company are in final discussions with
        multiple parties, including major oil companies and a national
        oil company, each of whom we believe, if chosen, would satisfy
        the PNG government's objectives.
    --  With the success of the Triceratops gas discovery and the
        better than expected results of the Antelope-3 well, we have
        had discussions with the DPE on our forward focus and
        priorities. To progress development of our core assets, we
        applied for variations to modify the well commitments for PPL
        236 and PPL 238. On March 28, 2013, the Minister for Petroleum
        & Energy approved and the DPE registered the deferral of the
        well commitments for PPL 236 and PPL 238.
    --  Net profit for the quarter ended March 31, 2013 was $4.0
        million, compared with a profit of $9.4 million for the same
        period in 2012, a decrease of $5.4 million. The operating
        segments of Corporate, Midstream Refining and Downstream
        collectively returned a net profit for the quarter of $18.5
        million. Investments in the development segments of Upstream
        and Midstream Liquefaction yielded a net loss of $14.5 million
        for an aggregate net profit of $4.0 million.

InterOil's Chairman and Interim CEO Dr. Gaylen Byker commented, "InterOil 
management and the Board are firmly committed to all of our stakeholders. My 
mandate as Chairman is to drive the LNG partner selection process to 
conclusion while maximizing value for all. We believe that our partnering 
process puts us in an advantageous position. We all look forward to working 
with a qualified LNG partner, in a fashion that balances the interests of all 
stakeholders and satisfies the objectives of the PNG government. We are 
excited to be at the final stage in this process."

Group Financial Results

InterOil recorded a net profit for the quarter ended March 31, 2013 of $4.0 
million, compared with a profit of $9.4 million for the same period in 2012, a 
decrease of $5.4 million.  The operating segments of Corporate, Midstream 
Refining and Downstream collectively returned a net profit for the quarter of 
$18.5 million.  Investments in the development segments of Upstream and 
Midstream Liquefaction yielded a net loss of $14.5 million for an aggregate 
net profit of $4.0 million.

EBITDA for the quarter ended March 31, 2013 was $18.0 million, a decrease of 
$9.5 million compared to EBITDA of $27.5 million for the same period in 2012, 
the decrease was mainly due to a $15.6 million negative variance in foreign 
exchange due to a weakening Kina versus the U.S. Dollar in the current period 
compared to a strengthening Kina versus the U.S. Dollar in the same period in 
2012. The swing in foreign exchange was partially offset by $6.9 million 
reduction in exploration expense compared to the 2012 first quarter.

Total revenues for the quarter ended March 31, 2013 were $350.3 million 
compared with $338.2 million for the same period in 2012.  This increase in 
the quarter ended March 31, 2013 compared to the same period in 2012 was 
primarily due to higher sales volumes made during the quarter.  The total 
volume of all products sold by us was 2.4 million barrels for the quarter 
ended March 31, 2013, compared with 2.2 million barrels in first quarter of 
2012.

Business Segment Results

Upstream – On January 24, 2013, the DPE approved and registered the transfer 
of interest in PPL 237 to PRE and the related PRE JVOA.  During the quarter, 
an application was submitted for a Petroleum Retention License over the 
Triceratops discovery. On March 13, 2013, the Farm-In Agreement with PRE was 
completed and we received a completion settlement from PRE of $56.0 million on 
March 24, 2013.

Additionally, on January 24, 2013, we completed the logging program on the 
Antelope-3 well.  Conventional wireline logs (porosity, resistivity and sonic) 
were acquired in addition to formation imaging, vertical well bore seismic and 
rotary sidewall coring was conducted.  Production logging was completed and 
the well suspended for future completion as a production well.  Our Rig#2 
remains on location at the Antelope-3 well site, and is undergoing inspection 
and partial refurbishment in preparation for mobilization to the next location.

At PRL 15, during the quarter, the DPE approved our JVOA relating to 
operations in PRL 15. As of March 31, 2013, our Rig #3 remains in position on 
Elk-3 well. Certification of the rig was granted by the DPE on January 3, 
2013, and the rig is currently on stand-by status with a minimum crew.

Proposed well locations have been selected for the Tuna and Wahoo prospects.  
Potential exploration well locations for future lease obligation wells were 
selected following completion of seismic acquisition, processing and mapping.  
However, with the success of the Triceratops gas discovery and the better than 
expected results of the Antelope-3 well, we have had discussions with the DPE 
on our forward focus and priorities. To progress development of our core 
assets, we applied for variations to modify the well commitments for PPL 236 
and PPL 238.  On March 28, 2013, the DPE approved the deferral of the well 
commitments for PPL 236 and PPL 238.

During the quarter, discussions were held with Oil Search Limited (OSH: AX), 
which holds exploration acreage adjacent to PPL 237.  These discussions relate 
to access within PPL 237 for a joint seismic program over both licenses with a 
tie to the Triceratops structure.  It was agreed that we will conduct the 
joint seismic program which will be fully funded by Oil Search.  The resulting 
data will be shared and separately analysed.

The Upstream segment realized a net loss of $13.8 million in the quarter ended 
March 31, 2013 (2012 – $17.2 million). The reduction in the loss for the 
quarter ended March 31, 2013 by $3.4 million compared to the same period of 
2012 was mainly due to a $6.9 million decrease in exploration costs incurred 
for seismic activity on PPL 236.  This decrease has been partially offset by a 
$2.5 million increase on intercompany interest charges due to an increase in 
inter-company loan balances provided to fund exploration and development 
activities, and a $1.7 million decrease in other non-allocated revenues due to 
lower recovery of expenses related to construction and drilling related 
activities.

Midstream Refining – Total refinery throughput for the quarter ended March 
31, 2013 was 27,525 barrels per operating day, compared with 23,759 barrels 
per operating day during the quarter ended March 31, 2012.

Capacity utilization of the refinery for the quarter ended March 31, 2013, 
based on 36,500 barrels per day operating capacity, was 74% compared with 55% 
for quarter ended March 31, 2012. During the quarters ended March 31, 2013 and 
2012, our refinery was shut down for 1 day and 15 days, respectively, for 
general maintenance activities.

The Midstream - Refining segment generated a net profit of $5.9 million in the 
quarter ended March 31, 2013 (2012 - $11.3 million). The decrease in profit 
resulted from a $7.1 million increase in foreign exchange losses, mainly due 
to the weakening of Kina against the USD. This however has been partially 
offset by a $1.8 million increase in gross margin due to higher margins earned 
from export sales, a decrease in standard cost per barrel throughput due to 
increased number of operating days, and increased crack spreads for IPP priced 
domestic sales.

Midstream Liquefaction –Since notification that the National Executive 
Committee had conditionally approved our LNG development project in the Gulf 
Province, InterOil has received multiple bids to partner on an LNG project and 
the development of the Elk and Antelope fields. Our investment banking 
advisors and the Company are in final discussions with multiple parties, 
including major oil companies and a national oil company, each of whom we 
believe, if chosen, would satisfy the PNG government's objectives.

The Midstream Liquefaction segment had a net loss of $0.7 million during the 
quarter ended March 31, 2013 (2012 –$2.0 million). The reduction in net loss 
from 2012 was mainly due to reduced activity until the sell down process is 
completed.

Downstream – The PNG economy slowed slightly in the first quarter of 2013 as 
the construction phase of the Exxon Mobil led PNG LNG project nears 
completion, and the construction contractors complete their projects. Total 
sales volumes for the first quarter ended March 31, 2013, were 183.7 million 
litres (March 2012 – 188.9 million litres), a decrease of 5.2 million 
litres, or 2.7% over the same period in 2012.

Our retail business accounted for approximately 15% of our total downstream 
sales in the first quarter of 2013 (March 2012 – 14%).  We continue to 
invest in new forecourt technology and in new retail fuel distribution 
systems.  During the quarter, we re-opened a completely refurbished retail 
site after it was purchased from a dealer.

The Downstream segment generated a net profit of $6.0 million in the quarter 
ended March 31, 2013 (2012 – $13.2 million).  The decreased profit was 
mainly due to a $8.9 million decrease in foreign exchange gains, primarily due 
to the one off transfer foreign exchange gains of $7.8 million previously 
included in Other Comprehensive Income to the profit and loss upon partial 
repayment of intercompany loans during the quarter ended March 31, 2012. In 
addition, we experienced a $3.0 million decrease in gross profit margin due to 
the impact of a decreasing price environment, which lead to lower margins on 
inventories sold.  These decreases in profit have been partially offset by a 
$3.3 million decrease in income tax expense.

Corporate – The Corporate segment generated a net profit of $7.3 million 
(2012 – $6.3 million).  The improvement over the same period in 2012 was 
primarily due to a $0.6 million increase in interest charges to other business 
segments relating to increased intercompany loan balances and a $0.7 million 
decrease in income tax expense.

Summary of Consolidated Quarterly Financial Results for Past Eight Quarters

Quarters      2013      2012                                    2011
ended
($ thousands            Dec-31 (  Sep-30 (  Jun-30 (  Mar-31 (  Dec-31 (  Sep-30 (  Jun-30 (
except per    Mar-13    (2))      (2))      (2))      (2))      (2))      (2))      (2))
share data)

Upstream      1,862     4,136     2,216     1,727     2,284     1,891     2,645     4,638

Midstream
–       305,172   301,925   274,671   236,006   302,310   237,640   231,455   262,111
Refining

Midstream
–       -         -         -         -         -         -         -         -
Liquefaction
((2))

Downstream    208,046   220,512   201,749   223,620   218,974   209,678   186,304   191,431

Corporate     34,923    37,552    26,880    24,742    24,757    21,831    25,078    26,548

Consolidation (199,672) (207,686) (178,652) (186,991) (210,174) (181,428) (163,584) (180,945)
entries

Total         350,331   356,439   326,864   299,104   338,151   289,612   281,898   303,783
revenues

Upstream      (1,311)   (873)     956       (5,730)   (6,374)   665       (6,169)   593

Midstream
–       12,701    12,370    13,417    (42,647)  18,933    2,604     3,461     27,967
Refining

Midstream
–       (123)     192       11        672       (1,410)   (4,129)   (3,608)   (4,041)
Liquefaction
((2))

Downstream    10,062    12,258    9,275     11,102    21,414    6,808     3,570     5,777

Corporate     10,044    14,133    9,841     9,975     9,188     10,134    1,548     13,940

Consolidation (13,418)  (12,199)  (14,503)  (9,871)   (14,216)  (11,280)  (10,263)  (5,269)
entries

EBITDA ((1))  17,955    25,881    18,997    (36,499)  27,535    4,802     (11,461)  38,967

Upstream      (13,774)  (13,081)  (10,936)  (15,532)  (17,244)  (9,402)   (15,080)  (6,703)

Midstream
–       5,855     13,401    5,358     (32,969)  11,320    15,684    (1,201)   17,314
Refining

Midstream
–       (681)     (394)     (573)     93        (1,969)   (4,574)   (3,980)   (4,309)
Liquefaction

Downstream    6,005     7,716     5,626     6,045     13,195    3,621     1,146     2,306

Corporate     7,342     10,519    7,849     8,445     6,270     7,616     (473)     11,275

Consolidation (744)     384       (1,988)   2,205     (2,136)   252       (190)     3,657
entries

Net profit/   4,003     18,545    5,336     (31,713)  9,436     13,197    (19,778)  23,540
(loss)

Net profit/
(loss) per
share
(dollars)

Per Share     0.08      0.38      0.11      (0.66)    0.20      0.27      (0.41)    0.49
– Basic

Per Share
–       0.08      0.38      0.11      (0.66)    0.19      0.27      (0.41)    0.48
Diluted

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

(2) Revised to effect the transition to IFRS 11- Joint arrangements, refer to 
Note 2(c)(ii) of our Condensed Consolidated Interim Financial Statements for 
further details. Note that the share of net loss of joint venture partnership 
accounted for using the equity method above consists of the Company's share of 
depreciation expense incurred by the PNG LNG joint venture, which were 
included in the EBITDA calculation.

Balance Sheet and Liquidity

InterOil closed the quarter ending March 31, 2013, with cash, cash equivalents 
and cash restricted totaling $107.4 million (March 31, 2012 - $81.1 million), 
of which $38.9 million is restricted (March 31, 2012 - $41.3 million).

We also had aggregate working capital facilities at March 31, 2013, of $305.5 
million, with $70.8 million available for use in our Midstream Refining 
operations, and $64.3 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 19% on March 31, 2013 from 13% a year ago.

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 PPLs 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 March 31, 2013.


                        Balance        Effective
Organization   Facility     outstanding    interest rate Maturity date 
                        March 31, 2013 
ANZ, BSP and
BNP syndicated $100,000,000 $100,000,000   6.79%         November 2017
secured loan
facility 
BNP working                 $33,118,821(                 See detail
capital        $240,000,000 (1))           2.61%         below
facility 
Westpac PGK
working
capital        $42,075,000  $1,178,475     9.50%         November 2014
facility 
facility 
BSP PGK
working        $23,375,000  -              9.45%         August 2013
capital
facility 
Westpac        $12,857,000  $10,714,000    4.62%         September 2015
secured 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    6.20%         below
((2)) 
(1) Excludes letters of credit totaling $136.1 million, which reduces the 
available borrowings under the facility to $70.8 million at March 31, 2013. 
(2) Facility is to fund our share of the Condensate Stripping Project costs as 
they are incurred pursuant to the CSP JVOA with Mitsui. 
(3) Effective rate after bifurcating the equity and debt components of the $70 
million principal amount of 2.75% convertible senior notes due 2015. 
NON-GAAP EBITDA Reconciliation 
EBITDA represents our net income/(loss) plus total interest expense (excluding 
amortization of debt issuance costs), income tax expense, depreciation and 
amortization expense.  EBITDA is used by us to analyze operating performance.  
EBITDA does not have a standardized meaning prescribed by GAAP (i.e., IFRS) 
and, therefore, may not be comparable with the calculation of similar measures 
for other companies.  The items excluded from EBITDA are significant in 
assessing our operating results.  Therefore, EBITDA should not be considered 
in isolation or as an alternative to net earnings, operating profit, net cash 
provided from operating activities and other measures of financial performance 
prepared in accordance with IFRS.  Further, EBITDA is not a measure of cash 
flow under IFRS and should not be considered as such.  For reconciliation of 
EBITDA to the net income (loss) under IFRS, refer to the following table. 
Quarters      2013     2012                                2011
ended
($ thousands) Mar-31   Dec-31   Sep-30   Jun-30   Mar-31   Dec-31   Sep-30   Jun-30 


                       ( (1))   ( (1))   ( (1))   ( (1))   ( (1))   ( (1))   ( (1))

Upstream      (1,311)  (873)    956      (5,730)  (6,374)  665      (6,169)  593

Midstream
–       12,701   12,370   13,417   (42,647) 18,933   2,604    3,461    27,967
Refining

Midstream
–       (123)    192      11       672      (1,410)  (4,129)  (3,608)  (4,041)
Liquefaction
((1))

Downstream    10,062   12,258   9,275    11,102   21,414   6,808    3,570    5,777

Corporate     10,044   14,133   9,841    9,975    9,188    10,134   1,548    13,940

Consolidation (13,418) (12,199) (14,503) (9,871)  (14,214) (11,280) (10,263) (5,270)
Entries

Earnings
before
interest,
taxes,        17,955   25,881   18,997   (36,499) 27,537   4,802    (11,461) 38,966
depreciation
and
amortization

Subtract:

Upstream      (11,941) (11,734) (11,438) (10,517) (9,408)  (8,712)  (7,806)  (7,142)

Midstream
–       (2,454)  (11,390) (1,654)  (2,011)  (2,771)  (3,285)  (2,494)  (2,211)
Refining

Midstream
–       (558)    (586)    (584)    (579)    (559)    (445)    (372)    (268)
Liquefaction

Downstream    (422)    (337)    (394)    (909)    (1,233)  (1,170)  (1,233)  (1,116)

Corporate     (1,600)  (1,601)  (1,540)  (1,535)  (1,510)  (1,498)  (1,477)  (1,641)

Consolidation 12,642   12,552   12,482   12,044   12,045   11,500   10,041   8,894
Entries

Interest      (4,333)  (13,096) (3,128)  (3,507)  (3,436)  (3,610)  (3,341)  (3,484)
expense

Upstream      -        -        -        -        -        -        -        -

Midstream
–       (1,270)  16,574   (3,484)  14,580   (1,948)  19,243   678      (5,677)
Refining

Midstream
–       -        -        -        -        -        -        -        -
Liquefaction

Downstream    (2,455)  (3,070)  (1,791)  (2,907)  (5,746)  (595)    (297)    (1,449)

Corporate     (196)    (1,330)  177      535      (880)    (493)    (195)    (629)

Consolidation -        -        -        -        -        -        -        -
Entries

Income taxes  (3,921)  12,174   (5,098)  12,208   (8,574)  18,155   186      (7,755)

Upstream      (522)    (474)    (454)    715      (1,462)  (1,355)  (1,105)  (154)

Midstream
–       (3,122)  (4,153)  (2,921)  (2,891)  (2,894)  (2,878)  (2,846)  (2,764)
Refining

Midstream
–       -        -        -        -        -        -        -        -
Liquefaction
((1))

Downstream    (1,180)  (1,135)  (1,464)  (1,241)  (1,240)  (1,422)  (894)    (906)

Corporate     (906)    (683)    (629)    (530)    (528)    (527)    (349)    (395)

Consolidation 32       31       33       32       33       32       32       32
Entries

Depreciation
and           (5,698)  (6,414)  (5,435)  (3,915)  (6,091)  (6,150)  (5,162)  (4,187)
amortisation

Upstream      (13,774) (13,081) (10,936) (15,532) (17,244) (9,402)  (15,080) (6,703)

Midstream
–       5,855    13,401   5,358    (32,969) 11,320   15,684   (1,201)  17,314
Refining

Midstream
–       (681)    (394)    (573)    93       (1,969)  (4,574)  (3,980)  (4,309)
Liquefaction

Downstream    6,005    7,716    5,626    6,045    13,195   3,621    1,146    2,306

Corporate     7,342    10,519   7,849    8,445    6,270    7,616    (473)    11,275

Consolidation (744)    384      (1,988)  2,205    (2,136)  252      (190)    3,657
Entries

Net profit/
(loss) per    4,003    18,545   5,336    (31,713) 9,436    13,197   (19,778) 23,540
segment

(1) Revised to effect the transition to IFRS 11- Joint arrangements, refer to 
Note 2(c)(ii) of our Condensed Consolidated Interim Financial Statements for 
further details. Note that the share of net loss of joint venture partnership 
accounted for using the equity method above consists of the Company's share of 
interest on depreciation expense incurred by the joint venture, which were 
included in the EBITDA calculation.

InterOil Corporation

Consolidated Income Statements

(Unaudited, Expressed in United States
dollars)
                                            Quarter ended
                                            March 31,     March 31,
                                            2013          2012
                                            $             $ (revised)*



Revenue

Sales and operating revenues                349,323,775   335,318,921

Interest                                    15,003        173,788

Other                                       992,226       2,657,229
                                            350,331,004   338,149,938



Changes in inventories of finished goods    13,107,848    (13,673,345)
and work in progress

Raw materials and consumables used          (327,866,604) (287,662,370)

Administrative and general expenses         (8,465,554)   (9,238,846)

Derivative losses                           (470,955)     (418,024)

Legal and professional fees                 (1,815,875)   (1,123,645)

Exploration costs, excluding exploration    (449,505)     (7,363,401)
impairment (note 6)

Finance costs                               (5,336,234)   (4,678,500)

Depreciation and amortization               (5,698,142)   (6,091,266)

Gain on conveyance of oil and gas           500,071       -
properties (note 6)

Loss on available-for-sale investment (note (340,045)     -
7)

Foreign exchange (losses)/gains             (5,476,146)   10,119,333

Share of net loss of joint venture
partnership accounted for                   (96,051)      (10,240)
using the equity method (note 14)
                                            (342,407,192) (320,140,304)

Profit before income taxes                  7,923,812     18,009,634



Income taxes

Current tax expense                         (3,829,598)   (6,216,862)

Deferred tax expense                        (91,496)      (2,356,492)
                                            (3,921,094)   (8,573,354)



Profit for the period                       4,002,718     9,436,280



Profit is attributable to:

Owners of InterOil Corporation              4,002,718     9,436,280
                                            4,002,718     9,436,280



Basic profit per share                      0.08          0.20

Diluted profit per share                    0.08          0.19

Weighted average number of common shares
outstanding

Basic (Expressed in number of common        48,612,015    48,149,076
shares)

Diluted (Expressed in number of common      49,284,136    49,216,450
shares)



See accompanying notes to the consolidated
financial statements

* Revised to effect transition to IFRS 11 - Joint arrangements, refer
note 2(c)(ii) for further information

InterOil Corporation

Consolidated Balance Sheets

(Unaudited, Expressed in
United States dollars)
                                            As at
                              March 31,     December 31,  March 31,
                              2013          2012          2012
                              $             $ (revised) * $ (revised) *
    Assets

 Current assets:

 Cash and cash equivalents    68,461,627    49,720,680    39,877,362

 Cash restricted              27,256,734    37,340,631    34,988,570

 Trade and other receivables  150,718,608   161,578,481   121,581,726

 Derivative financial         372,938       233,922       729,174
 instruments

 Other current assets         2,333,691     832,869       584,295

 Inventories (note 5)         207,979,187   194,871,339   157,398,454

 Prepaid expenses             6,043,515     8,517,340     3,524,719

 Total current assets         463,166,300   453,095,262   358,684,300

 Non-current assets:

 Cash restricted              11,670,536    11,670,463    6,280,432

 Plant and equipment          253,122,122   255,031,257   248,032,751

 Oil and gas properties (note 544,934,617   510,669,431   406,477,789
 6)

 Deferred tax assets          62,399,028    63,526,458    35,275,566

 Other non-current            29,700,534    5,000,000     -
 receivables (note 11)

 Investments accounted for
 using the equity method      -             -             -
 (note 14)

 Available-for-sale           3,587,901     4,304,176     7,039,394
 investments (note 7)

 Total non-current assets     905,414,738   850,201,785   703,105,932

 Total assets                 1,368,581,038 1,303,297,047 1,061,790,232

 Liabilities and
 shareholders' equity

 Current liabilities:

 Trade and other payables     224,733,505   178,313,483   85,209,291

 Income tax payable           15,583,344    11,977,681    10,376,661

 Derivative financial         9,913         -             -
 instruments

 Working capital facilities   34,297,296    94,290,479    31,277,763
 (note 8)

 Unsecured loan and current
 portion of secured loans     31,379,982    31,383,115    23,679,023
 (note 9)

 Current portion of Indirect
 participation interest (note 15,246,397    15,246,397    540,002
 10)

 Total current liabilities    321,250,437   331,211,155   151,082,740

 Non-current liabilities:

 Secured loans (note 9)       87,495,705    89,446,137    36,807,153

 2.75% convertible notes      59,930,967    59,046,581    56,470,958
 liability

 Deferred gain on
 contributions to LNG project 5,287,152     5,191,101     4,711,155
 (note 14)

 Indirect participation       14,282,001    16,405,393    34,134,840
 interest (note 10)

 Other non-current            96,000,000    20,961,380    -
 liabilities (note 11)

 Asset retirement obligations 4,983,064     4,978,334     4,797,193

 Total non-current            267,978,889   196,028,926   136,921,299
 liabilities

 Total liabilities            589,229,326   527,240,081   288,004,039

 Equity:

 Equity attributable to
 owners of InterOil
 Corporation:

 Share capital (note 12)      931,990,521   928,659,756   909,155,368

 Authorized - unlimited

 Issued and outstanding -
 48,652,640

 (Dec 31, 2012 - 48,607,398)

 (Mar 31, 2012 - 48,169,071)

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

 Contributed surplus          32,632,412    21,876,853    25,986,833

 Accumulated Other            22,389,537    25,032,953    30,324,017
 Comprehensive Income

 Conversion options (note 10) -             12,150,880    12,150,880

 Accumulated deficit          (221,958,794) (225,961,512) (218,128,941)

 Total equity attributable to
 owners of InterOil           779,351,712   776,056,966   773,786,193
 Corporation

 Total liabilities and equity 1,368,581,038 1,303,297,047 1,061,790,232

See accompanying notes to the
consolidated financial
statements

* Revised to effect transition to IFRS 11 - Joint arrangements, refer
note 2(c)(ii) for further information

InterOil Corporation

Consolidated Statements of Cash Flows

(Unaudited, Expressed in United States
dollars)
                                             Quarter ended
                                             March 31,    March 31,
                                             2013         2012
                                             $            $ (revised) *



Cash flows generated from (used in):



Operating activities

Net profit for the period                    4,002,718    9,436,280

Adjustments for non-cash and non-operating
transactions

Depreciation and amortization                5,698,142    6,091,266

Deferred tax                                 1,127,430    (1,199,684)

Gain on conveyance of exploration assets     (500,071)    -

Accretion of convertible notes liability     884,386      833,328

Amortization of deferred financing costs     189,435      55,987

Timing difference between derivatives
recognized

and settled                                  (129,103)    (145,191)

Stock compensation expense, including        2,506,982    1,602,920
restricted stock

Accretion of asset retirement obligation     89,208       82,774
liability

Loss on Flex LNG investment                  340,045      -

Share of net loss of joint venture
partnership accounted for

using the equity method                      96,051       10,240

Unrealized foreign exchange loss             167,774      302,432

Change in operating working capital

(Increase)/decrease in trade and other       (15,816,189) 11,723,760
receivables

(Decrease)/increase in unrealised hedge      -            -
gains

Decrease in other current assets and prepaid 973,003      2,230,631
expenses

(Increase)/decrease in inventories           (15,303,322) 11,833,220

Increase/(decrease) in trade and other       56,256,930   (71,348,790)
payables

Net cash generated from/(used in) operating  40,583,419   (28,490,827)
activities



Investing activities

Expenditure on oil and gas properties        (38,386,230) (45,518,055)

Proceeds from IPI cash calls                 2,188,613    2,433,804

Expenditure on plant and equipment           (3,789,007)  (8,092,639)

Maturity of short term treasury bills        -            11,832,110

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

borrowings                                   10,083,824   (2,018,239)

Change in non-operating working capital

(Decrease)/increase in trade and other       (5,799,120)  8,453,361
payables

Net cash used in investing activities        (35,701,920) (32,909,658)



Financing activities

Proceeds from Westpac secured loan           -            15,000,000

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

Proceeds from Pacific Rubiales Energy for    76,000,000   -
interest in PPL237

(Repayments of)/proceeds from working        (59,993,183) 14,797,260
capital facility

Proceeds from issue of common shares, net of -            1,913,421
transaction costs

Net cash generated from financing activities 13,863,817   31,710,681



Increase/(decrease) in cash and cash         18,745,316   (29,689,804)
equivalents

Cash and cash equivalents, beginning of      49,720,680   68,575,269
period

Exchange (losses)/gains on cash and cash     (4,369)      991,897
equivalents

Cash and cash equivalents, end of period     68,461,627   39,877,362

Comprising of:

Cash on Deposit                              33,206,412   13,695,498

Short Term Deposits                          35,255,215   26,181,864

Total cash and cash equivalents, end of      68,461,627   39,877,362
period



See accompanying notes to the consolidated
financial statements

* Revised to effect transition to IFRS 11 - Joint arrangements, refer
note 2(c)(ii) for further information

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                                                                                            |
|___________________________________________________________________________________________________________|___________
____________________________________________________________________________________________|
|V. P. 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 further seismic-related exploration activities, 
development activities,  the ability to attract a strategic LNG partner and 
complete the LNG partnering process and the timing of such process, the 
construction and development of the proposed LNG project, the characteristics 
of our properties, the ability to commercially develop our resources, 
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, 
the terms of agreements with its joint venture partners 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, 2012 on Form 40-F and its Annual 
Information Form for the year ended December 31, 2012. 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 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/May2013/13/c6455.html 
CO: InterOil Corporation
ST: Texas
NI: OIL UTI ERN  
-0- May/13/2013 20:47 GMT
 
 
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