EX-99.4 5 v379538_ex99-4.htm EXHIBIT 99.4

 

2013 ANNUAL REPORT

 

 

  INTEROIL CORPORATION
  Energy for the Asian Market
   
  NYSE: IOC

 

 
2 

 

INTEROIL: PROUD TO BE A PNG COMPANY

 

Hundreds of Jobs, Reaching Thousands More People

 

Since its founding in 1997, InterOil has grown to become a significant regional energy company and, as important, a trusted partner to communities, business, and the Government of Papua New Guinea. InterOil employs about 1100 people in Papua New Guinea, ranging from experts in drilling and logistics to community relations specialists. Our employees include skilled managers, mechanics and engineers, construction workers and service station staff. The great majority are locally hired, and they in turn support thousands of family members.

 

Generating Value for Shareholders and PNG

 

Our integrated business activities in exploration, refining and distribution provide fuel for the nation and generate millions of dollars in revenue for the Government. In all ways, we work to ensure that the people of Papua New Guinea benefit from their country’s natural resources.

 

Our agreement with Total S.A. of France which could lead to the development of the Elk-Antelope fields as a Liquefied Natural Gas (LNG) Project has the potential to provide significant benefits to InterOil shareholders and contribute considerable revenue to the people of Papua New Guinea through taxes and royalties.

 

 
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Our partnership with Papua New Guinea has three important elements:

 

1. Respect for Communities and the Environment

 

First is our relationship with communities and our respect for the environment. We give priority to ensuring that our presence is a benefit to the people and communities near our exploration and drilling activities. We provide education and medical facilities, transport assistance, jobs, training, and a number of other community services. We also do all we can to ensure that our footprint is minimal.

 

2. Commitment to High Standards of Governance, Health, and Safety

 

Second is our fundamental commitment to high standards of honesty and efficiency in our work. This applies to every aspect of our business, from the ethics we insist on in all our employees’ behavior to the importance we place on the health and safety of our entire workforce. Anything less would be bad business and unacceptable behavior. We hope that, in all we do, we are a positive example of how good business practices create jobs, sustainable profits, and a reputation that stands the test of time.

 

3. A Long-Term Partnership

 

Finally, there is our commitment to Papua New Guinea. InterOil has been a partner to Papua New Guinea for 17 years, through recessions and good times. We will be in PNG for many years to come. The LNG project alone will take 20-30 years to run its course. We have more promising areas to explore, more wells to drill, and we expect to find more oil and gas. The partnership with PNG is one we are proud of. The future with PNG is one we are excited about. Our partnership will bring more jobs and opportunities to Papua New Guineans and generate more income for the country, its people, and our shareholders.

 

That is what a successful partnership should do.

 

  “In October 2013, the board approved InterOil’s  largest exploration and appraisal program and one of the biggest in Papua New Guinea’s history.”
   
   
  Dr. Michael Hession
  Chief Executive Officer
   
  March 2014

 

 
4 

 

MESSAGE FROM THE CHAIRMAN OF THE BOARD

 

 

InterOil made significant progress this past year by strengthening its executive and senior management team with experienced industry leaders needed for the exceptional opportunities we have created.

 

Of particular significance in 2013 was the appointment of a new Chief Executive Officer, Dr. Michael Hession, who came to InterOil after many distinguished years at Woodside and BP. He brings a wealth of experience across different regions in both exploration and project Development. Michael has strong commercial ties in the industry and has shown great skill in

liaising with partners and governments on complex projects.

 

InterOil soon brought on senior executives to fill vacancies created by retirement. Don Spector the new Chief Financial Officer, and Jon Ozturgut, the new Chief Operating Officer, joined InterOil late in 2013 and were formally appointed in January 2014. In addition, Sir Wilson Kamit, the former Governor of the Bank of Papua New Guinea, joined the Board. Isikeli Taureka, previously the President of Chevron Texaco China, was appointed as Executive Vice President of Corporate

Development and Government Relations, and as the company’s senior management member in Papua New Guinea.

 

In early 2014, we saw the historic completion of our partnership agreement with Total S.A. of France which could lead to the development of the Elk-Antelope fields and the purchase of a minority interest in PRL15 by Oil Search. This connects what may be the biggest gas field in Papua New Guinea to Asia, the fastest growing market in the world. The transaction was an important moment for investors, many of whom have been part of the company since its formation in 1997. We look forward to growing this company along with Total for the benefit of our shareholders and for Papua New Guinea. Work is already advanced on that project, with appraisal wells scheduled for later in 2014.

 
   

Dr. Gaylen Byker

Chairman and Board Member

 
 

 

 

 

 

 
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In January of 2014, we were presented with the Good Corporate Citizen Award by the Papua New Guinea Department of Labour and Industrial Relations. This award provides InterOil with public recognition for our efforts to be a positive influence in Papua New Guinea, through our employment, business, environmental, and safety practices.

 

In addition, the award entitles InterOil to apply for five-year work permits for staff and contractors, and gives the company priority in the processing of these applications. On behalf of InterOil, I want to place on record our genuine appreciation for this support, and the strong relationship we enjoy with the government and the people of Papua New Guinea.

 

We are committed to improving the lives of the people in the communities where we explore and drill. In the past year, InterOil has built a modern office and accommodation complex to support local and provincial government work in education. We have also provided health care and supported business development in Wabo and the surrounding villages as well as supplying fuel to the Youth With A Mission medical ships so they can take volunteer medical workers to assist people in remote parts of Papua New Guinea.

 

With the teachers at Kouderika Primary School in Central province, we celebrated the opening of two new teachers’ houses built by InterOil. InterOil is a world-class company developing world-class resources with world-class people who have a passion for working together, doing good work and making a difference. As we develop energy resources in Papua New Guinea, our aim always is to create value for our shareholders, to support safe and efficient operations for our employees, and to be an outstanding partner to everyone – from joint venturers to communities – with whom we interact.

 

As 2014 gets underway, InterOil’s future is bright. We have monetized a major asset with a high-quality global partner, and begun a large-scale exploration program in the surrounding area. InterOil is positioned to maximize these assets for the benefit of shareholders.

 

We appreciate our shareholders’ continued support and look forward to reporting our progress and achievements to you, as we move forward in this crucial, exciting phase of the Company’s future.

 

 

 
6 

 

MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

 

 

New Leadership, New Vision for InterOil

 

2013 was a milestone year for InterOil. With new leadership and management, we moved quickly to stabilize our operations in a way that would translate into improved performance and

greater market confidence.

 

Crucial to this was securing agreement with an oil major on the development of the Elk-Antelope fields in PRL 15. This was completed in early 2014, with the signing of an agreement with Total S.A. of France which could lead to the development of the Elk-Antelope fields as a multi-billion-dollar LNG project.

 

This project has the potential to provide a strong, steady revenue stream for InterOil and the other partners, including of course the people and Government of Papua New Guinea.

 

In October 2013, the board approved InterOil’s largest exploration and appraisal program and one of the biggest in Papua New Guinea’s history. We then accelerated preparation for exploration wells on our PPLs so we could drill as soon as we received government approval. In early 2014, approval was given and we successfully acquired the rights to the same

acreage as we previously held, for the next six years.

 

A Front Rank Energy Company

 

These developments, together with consistent performance by our oil refinery and our retail and wholesale distribution businesses in Papua New Guinea, position InterOil among the front rank of Asian energy companies.

 

To deliver on this next phase of the company’s potential and realize the value of our assets, we needed an experienced, talented management team. The final months of the year saw new senior managers stepping into roles they would formally undertake early in 2014.

 

InterOil’s growth and success depend heavily on the quality of the senior team whose job it is to guide our exceptional staff and oversee our energy assets. I am confident that we have the right team in place to lead us through this exciting period of growth.

 
   

Dr. Michael Hession

Chief Executive Officer

 
 

 

 

 

 
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We also took significant steps to streamline our operations, bearing down on costs and rationalizing our offices and staffing. Though painful, these were the right steps to ensure we are focusing our human and financial resources where they can have the greatest impact. We announced the closure of our Cairns office by the end of 2014, with the transfer of most functions to our office in Port Moresby.

 

Three Horizons to Realize Potential

 

These various steps are integral parts of a plan I laid out on my appointment in July, to guide InterOil in 2013 and beyond. It has three horizons, detailing our vision to be a world-class company developing world-class resources with world-class people who have a passion for working together, doing good work and making a difference.

 

 

Horizon One is operating growth: running an efficient and financially stable business, with capital to support investment, low costs, strong skills and capacity, and streamlined processes. The management team, the prudent management of costs, the allocation of cash to generate future earnings – these are all part of the first horizon.

 

Horizon Two is developing growth: monetizing our gas resources through partnerships with world-class operators, as we have done with the Elk-Antelope fields.

 

Horizon Three is future growth: investing in new exploration across frontier regions in Papua New Guinea. When our exploration activities bear fruit, we will assemble the right partnerships to develop them, as we have with the Elk-Antelope fields.

 

In short, we want to make the most of what we already have; turn probable opportunities into realities; and work our possibilities hard so they can become realities.

 

 
8 

 

SOLID BASE IN PAPUA NEW GUINEA

 

1   52   9.4m
Only Refinery in Papua New Guinea   Service Stations Fueling The Country   Barrels of product sold in 2013
         
$1.4bn   $136m   1,100
Revenue in 2013   Goss Margin in 2013   Employees at December 31, 2013

 

 

OPPORTUNITIES IN A PROLIFIC GAS BASIN

 

 

 
 9

 

BOOMING ASIAN MARKET

 

By 2030, Asia’s middle class to be the largest in the world

 

One of the fastest growing population groups
Asia to account for 43% of global consumption
Energy demand in Asia to double

 

Limited supply of conventional gas resource creates dependence on LNG imports

 

Landed LNG prices in Asia are up to 4X US prices

 

Asis’s Growing Middle Class and LNG Landed Prices

 

 

EXPERIENCED TEAM IN PLACE

 

     
Dr. Michael Hession Donald Spector Jon Ozturgut
Chief Executive Officer, Board Member Chief Financial Officer Chief Operating Officer

 

       
David Kirk Isikeli Taureka Geoff Applegate Thomas Nador
Senior Vice President, Upstream Executive Vice President, PNG General Counsel and Corporate Secretary Senior Vice President, Corporate

 

 
10 

 

Consolidated Balance Sheets (Expressed in United States dollars)

 

   As at 
   December 31,   December 31,   December 31,   January 1, 
   2013   2012   2011   2011 
   $   $ (revised) *   $ (revised) *   $ (revised) * 
                 
Assets                    
Current assets:                    
Cash and cash equivalents (note 5)   61,966,539    49,720,680    68,575,269    232,424,858 
Cash restricted (note 7)   36,149,544    37,340,631    32,982,001    40,664,995 
Short term treasury bills - held-to-maturity (note 7)   -    -    11,832,110    - 
Trade and other receivables (note 8)   98,638,110    161,578,481    137,796,513    49,004,667 
Derivative financial instruments (note 7)   -    233,922    595,440    - 
Other current assets   1,054,847    832,869    862,049    498,302 
Inventories (note 9)   158,119,181    194,871,339    171,071,799    127,137,360 
Prepaid expenses   8,125,270    8,517,340    5,477,596    3,593,574 
Total current assets   364,053,491    453,095,262    429,192,777    453,323,756 
Non-current assets:                    
Cash restricted (note 7)   17,065,000    11,670,463    6,268,762    6,613,074 
Plant and equipment (note 10)   244,383,962    255,031,257    246,031,378    225,166,865 
Oil and gas properties (note 11)   584,807,023    510,669,431    362,852,766    255,294,738 
Deferred tax assets (note 12)   48,230,688    63,526,458    35,965,273    28,477,690 
Other non-current receivables (note 18)   29,700,534    5,000,000    -    - 
Investments accounted for using the equity method (note 24)   17,557,838    -    -    - 
Available-for-sale investments (note 13)   -    4,304,176    3,650,786    - 
Total non-current assets   941,745,045    850,201,785    654,768,965    515,552,367 
Total assets   1,305,798,536    1,303,297,047    1,083,961,742    968,876,123 
Liabilities and shareholders' equity                    
Current liabilities:                    
Trade and other payables (note 14)   134,027,347    178,313,483    156,598,973    72,521,373 
Income tax payable   17,087,974    11,977,681    4,085,137    955,074 
Derivative financial instruments (note 7)   1,869,253    -    11,457    178,578 
Working capital facilities (note 15)   36,379,031    94,290,479    16,480,503    51,254,326 
Unsecured loan and current portion of secured loans (note 16)   134,775,077    31,383,115    19,393,023    14,456,757 
Current portion of Indirect participation interest (note 17)   12,097,363    15,246,397    540,002    540,002 
Total current liabilities   336,236,045    331,211,155    197,109,095    139,906,110 
Non-current liabilities:                    
Secured loans (note 16)   65,681,425    89,446,137    26,037,166    34,813,222 
2.75% convertible notes liability (note 21)   62,662,628    59,046,581    55,637,630    52,425,489 
Deferred gain on contributions to LNG project (note 24)   -    5,191,101    4,700,915    4,694,936 
Indirect participation interest (note 17)   7,449,409    16,405,393    34,134,840    34,134,387 
Other non-current liabilities (note 18)   96,000,000    20,961,380    -    - 
Asset retirement obligations (note 19)   4,948,017    4,978,334    4,562,269    - 
Deferred tax liabilities (note 12)   -    -    1,889,391    - 
Total non-current liabilities   236,741,479    196,028,926    126,962,211    126,068,034 
Total liabilities   572,977,524    527,240,081    324,071,306    265,974,144 
Equity:                    
Equity attributable to owners of InterOil Corporation:                    
Share capital (note 20)   953,882,273    928,659,756    905,981,614    895,651,052 
Authorized - unlimited                    
Issued and outstanding - 49,217,242                    
(Dec 31, 2012 - 48,607,398)                    
(Dec 31, 2011 - 48,121,071)                    
2.75% convertible notes (note 21)   14,297,627    14,298,036    14,298,036    14,298,036 
Contributed surplus (note 20)   26,418,658    21,876,853    25,644,245    16,738,417 
Accumulated Other Comprehensive Income   4,541,913    25,032,953    29,380,882    9,261,177 
Conversion options (note 17)   -    12,150,880    12,150,880    12,150,880 
Accumulated deficit   (266,319,459)   (225,961,512)   (227,565,221)   (245,217,682)
Total equity attributable to owners of InterOil Corporation   732,821,012    776,056,966    759,890,436    702,881,880 
Non-controlling interest   -    -    -    20,099 
Total equity   732,821,012    776,056,966    759,890,436    702,901,979 
Total liabilities and equity   1,305,798,536    1,303,297,047    1,083,961,742    968,876,123 

 

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

 

·Comparatives for years 2012 and 2011 have been revised to effect transition to IFRS 11 - Joint arrangements
·These statements have been extracted from any annual filings, and should be read in conjunction with our audited annual consolidated financial statements and accompanying notes for the year ended December 31, 2013 found on our website or available at www.sedar.com

 

 
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Consolidated Income Statements (Expressed in United States dollars)

 

   Year ended 
   December 31,   December 31,   December 31, 
   2013   2012   2011 
   $   $ (revised)*   $ (revised)* 
             
Revenue               
Sales and operating revenues   1,395,698,906    1,308,051,816    1,106,533,853 
Interest   81,699    247,882    1,356,122 
Other   4,347,963    12,257,833    11,058,090 
    1,400,128,568    1,320,557,531    1,118,948,065 
                
Changes in inventories of finished goods and work in progress   (36,752,158)   23,799,540    43,934,439 
Raw materials and consumables used   (1,222,760,734)   (1,242,987,054)   (1,064,866,361)
Administrative and general expenses   (37,664,297)   (40,576,580)   (40,188,605)
Derivative (losses)/gains   (6,157,231)   (4,229,190)   2,006,321 
Legal and professional fees   (11,169,769)   (5,187,704)   (5,150,107)
Exploration costs, excluding exploration impairment (note 11)   (18,793,902)   (13,901,558)   (18,435,150)
Finance costs   (28,603,278)   (28,614,981)   (18,163,769)
Depreciation and amortization   (23,411,336)   (21,855,228)   (20,111,016)
Gain on conveyance of oil and gas properties (note 11)   500,071    4,418,170    - 
Gain/(loss) on available-for-sale investment (note 13)   3,719,907    -    (3,420,406)
Foreign exchange (losses)/gains   (41,209,608)   (40,260)   25,031,788 
Share of net profit/(loss) of joint venture partnership accounted  for using the equity method (note 24)   2,275,090    (490,186)   (2,662,204)
    (1,420,027,245)   (1,329,665,031)   (1,102,025,070)
(Loss)/profit before income taxes   (19,898,677)   (9,107,500)   16,922,995 
                
Income taxes               
Current tax expense (note 12)   (13,453,725)   (15,883,469)   (5,512,842)
Deferred tax (expense)/benefit (note 12)   (7,005,545)   26,594,678    6,248,509 
    (20,459,270)   10,711,209    735,667 
                
(Loss)/profit for the period   (40,357,947)   1,603,709    17,658,662 
                
(Loss)/profit is attributable to:               
Owners of InterOil Corporation   (40,357,947)   1,603,709    17,652,461 
Non-controlling interest   -    -    6,201 
    (40,357,947)   1,603,709    17,658,662 
                
Basic (loss)/profit per share   (0.83)   0.03    0.37 
Diluted (loss)/profit per share   (0.83)   0.03    0.36 
Weighted average number of common shares outstanding               
Basic (Expressed in number of common shares)   48,793,986    48,352,822    47,977,478 
Diluted (Expressed in number of common shares)   48,793,986    49,357,256    49,214,190 

 

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

 

Note: Reference to full financial statements for the year ending December 31, 2013 and supporting notes are found on InterOil’s website.

 

·Comparatives for years 2012 and 2011 have been revised to effect transition to IFRS 11 - Joint arrangements
·These statements have been extracted from any annual filings, and should be read in conjunction with our audited annual consolidated financial statements and accompanying notes for the year ended December 31, 2013 found on our website or available at www.sedar.com

 

 
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CASH FLOW STATEMENTS (Expressed in United State dollars)

 

   Year ended 
   December 31,   December 31,   December 31, 
   2013   2012   2011 
   $   $ (revised) *   $ (revised) * 
             
Cash flows generated from (used in):               
                
Operating activities               
Net (loss)/profit for the year   (40,357,947)   1,603,709    17,658,662 
Adjustments for non-cash and non-operating transactions               
Depreciation and amortization   23,411,336    21,855,228    20,111,016 
Deferred tax   15,295,770    (29,450,576)   (5,598,192)
Gain on conveyance of exploration assets   (500,071)   (4,418,170)   - 
Accretion of convertible notes liability   3,617,760    3,408,951    3,212,141 
Amortization of deferred financing costs   4,589,536    598,698    223,944 
Timing difference between derivatives recognized and settled   2,103,175    350,061    (762,561)
Stock compensation expense, including restricted stock   4,770,970    7,882,067    14,721,387 
Inventory write down   -    322,535    259,406 
Accretion of asset retirement obligation liability   356,830    331,096    159,356 
Non-cash settlement on PNGEI buyback   6,837,000    -    - 
Gain on conversion of convertible notes   (500)   -    - 
(Gain)/loss on Flex LNG investment   (3,719,907)   -    3,420,406 
Share of net (profit)/loss of joint venture partnership accounted for using the equity method   (2,275,090)   490,186    2,662,204 
Unrealized foreign exchange gain   (352,348)   (1,070,269)   (2,618,814)
Change in operating working capital               
Increase in trade and other receivables   (21,273,999)   (43,579,657)   (54,630,047)
Decrease/(increase) in other current assets and prepaid expenses   170,092    (3,010,564)   (2,247,769)
Decrease/(increase) in inventories   30,610,288    (28,886,641)   (28,003,484)
Increase in trade and other payables   47,360,333    25,912,734    73,291,275 
Net cash generated from/(used in) operating activities   70,643,228    (47,660,612)   41,858,930 
                
Investing activities               
Expenditure on oil and gas properties   (128,285,583)   (179,779,865)   (116,492,551)
Proceeds from IPI cash calls   29,942,167    3,497,542    749,794 
Expenditure on plant and equipment   (25,951,297)   (30,855,107)   (36,874,794)
Proceeds from Pacific Rubiales Energy (conveyance accounted portion)   -    20,000,000    - 
Maturity of/(investment in) short term treasury bills   -    11,832,110    (11,832,110)
Proceeds from disposal of/(acquisition of) Flex LNG Ltd shares, net of transaction costs   7,778,258    -    (7,478,756)
(Increase)/decrease in restricted cash held as security on borrowings   (4,203,450)   (9,760,331)   8,027,306 
Change in non-operating working capital               
Decrease/(increase) in trade and other receivables   5,000,000    5,000,000    (10,000,000)
(Decrease)/increase in trade and other payables   (17,744,539)   22,115,815    (6,399,657)
Net cash used in investing activities   (133,464,444)   (157,949,836)   (180,300,768)
                
Financing activities               
Repayments of OPIC secured loan   -    (35,500,000)   (9,000,000)
(Repayments to)/proceeds from Mitsui for Condensate Stripping Plant   (34,375,748)   3,578,489    9,872,532 
Proceeds from drawdown of Westpac secured loan   -    15,000,000    - 
Repayments of Westpac secured loan   (12,857,000)   (2,143,000)   - 
Proceeds from drawdown of BSP and Westpac secured facility (net of transaction costs)   33,835,101    -    - 
Repayments of BSP and Westpac secured facility   (11,070,578)   -    - 
Proceeds from drawdown of Credit Suisse secured facility (net of  transaction costs)   93,042,488    -    - 
Proceeds from Pacific Rubiales Energy for interest in PPL237 (net of  transaction costs)   73,600,000    20,000,000    - 
(Repayments of)/proceeds from working capital facility   (57,911,448)   77,809,976    (34,773,823)
(Repayments of)/proceeds from ANZ, BSP & BNP syndicated loan   (16,000,000)   95,924,091    - 
Proceeds from issue of common shares, net of transaction costs   6,839,930    11,028,683    4,488,703 
Payment on conversion of convertible notes   (1,546)   -    - 
Net cash generated from/(used in) financing activities   75,101,199    185,698,239    (29,412,588)
                
Increase/(decrease) in cash and cash equivalents   12,279,983    (19,912,209)   (167,854,426)
Cash and cash equivalents, beginning of year   49,720,680    68,575,269    232,424,858 
Exchange (losses)/gains on cash and cash equivalents   (34,124)   1,057,620    4,004,837 
Cash and cash equivalents, end of year   61,966,539    49,720,680    68,575,269 
Comprising of:               
Cash on Deposit   31,738,440    49,086,353    18,487,116 
Short Term Deposits   30,228,099    634,327    50,088,153 
Total cash and cash equivalents, end of year   61,966,539    49,720,680    68,575,269 

 

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

 

Comparatives for years 2012 and 2011 have been revised to effect transition to IFRS 11 - Joint arrangements
These statements have been extracted from any annual filings, and should be read in conjunction with our audited annual consolidated financial statements and accompanying notes for the year ended December 31, 2013 found on our website or available at www.sedar.com

 

 
 13

 

 

Development of the Elk-Antelope fields

 

PRL 15 contains the Elk-Antelope fields, PNG’s largest undeveloped gas field
World-class hydrocarbon resource
PRL 15 also contains Antelope Deep – a prospective gas reservoir immediately south of and analogous to Antelope

 

Strong Joint Venture now in place

 

New Joint Venture combines PNG’s largest independent oil and gas companies with super major

Aligned partnership with operating experience, relationships and financial strength
Government support to bring gas quickly to market

 

Material Stake in PRL15

 

2nd largest owner of PRL15 with 36.5% stake (pre-Govt back-in)
Minority interests removed
US $401 million completion payment received
Contingent payment structure (with uncapped upside)

 

Energy for the Asian Market

 

Intention to monetize gas quickly for fast growing Asian markets
Focus now on appraisal and development
Exploration program to underpin growth potential

 

 

 
14 

 

DEVELOPMENT TRANSACTIONAL DETAILS

 

(Post sell-down to Total SA on March 26, 2014 and acquisition of an additional 1% from the IPI holders on March 27, 2014 )

 

         Gross   Net (1) 
PRL15 interest  ·  InterOil   36.5%   28.3%
   ·  Total   40.1%   31.1%
   ·  Oil Search   22.8%   17.7%
   ·  Indirect participating interests   0.5%   0.4%
   ·  Government and landowners   0%   22.5%
Fixed  ·  US $401 million paid upon completion          
Payments (4)  ·  US $73.3 million at final investment decision for LNG project          
   ·  US $65.4 million at First Cargo          
Variable  ·  Based on certified 2C resources at certification (2) (3)          
Payments     · US $0.77/mcfe >3.5Tcfe and <5.4 Tcfe          
      · US $1.03/mcfe >5.4Tcfe and <6.5 Tcfe          
      · US $1.29/mcfe >6.5Tcfe          
Carry  ·  Up to 3 appraisal wells each at US $50 million (100% basis)          
   ·  Offset against first resource payment          
   ·  One exploration well in PRL15 of US $60 million (100% basis)          
Discovery bonus  ·  Based on volumes from exploration well          
   ·  Payment of US $65.4 million per Tcf for volumes over 1 Tcf          

 

(1)Assumes the Papua New Guinea Government and landholders in PRL15 exercise their rights under the PNG Oil and Gas Act to take their respective 20.5% and 2% interest when a petroleum development licence is issued
(2)Under the agreement, further resource payments or adjustments may be made in addition to initial payments depending on certified volumes
(3)Represents 2C Hydrocarbon Gas plus Condensate resource volumes post Government back-in. Equates to US $0.60, US $0.80 and US $1.00 respectively based on gross resource (pre-government back-in)
(4)Based on interests set out in revised agreement, reduced pro-rata to reflect lower interest acquired

 

 
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16 

 

 

 
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18 

 

ABOUT INTEROIL CORPORATION

 

InterOil Corporation is an independent oil and gas business with a primary focus on Papua New Guinea. InterOil’s assets include an interest in one of Asia’s largest undeveloped gas fields, Elk-Antelope, in the Gulf Province, exploration licences covering about 4 million acres, Papua New Guinea’s only oil refinery, and retail and commercial petroleum distribution facilities throughout the country. The company employs about 1100 people and has its main offices in Singapore and Port Moresby. InterOil is listed on the New York and Port Moresby stock exchanges.

 

 

MANAGEMENT TEAM

 

Dr. Michael Hession David Kirk Geoff Applegate
Chief Executive Officer, Board Member Senior Vice President, Upstream General Counsel and Corporate Secretary
     
Donald Spector Isikeli Taureka Thomas Nador
Chief Financial Officer Executive Vice President, PNG Senior Vice President, Corporate
     
Jon Ozturgut    
Chief Operating Officer    

 

BOARD OF DIRECTORS

 

Dr. Gaylen Byker Samuel L. Delcamp Sir Rabbie Namaliu
Chairman Board Member Board Member
     
Ford Nicholson Roger Grundy Sir Wilson Kamit
Deputy Chairman, Board Member Board Member Board Member
     
Dr. Michael Hession Roger Lewis  
Chief Executive Officer and Board Member Board Member  

 

 
 19

 

CORPORATE INFORMATION

 

CORPORATE OFFICES

 

InterOil Singapore Pte Ltd

111 Somerset Road

TripleOne Somerset #06-05

Singapore 238164

Telephone: +65 6507 0222

 

InterOil Limited / InterOil Refinery

Post Office Box 1971

Port Moresby, NCD

Level 2 Ravalien Haus

Harbour City NCD 0121

Papua New Guinea

Telephone: +675 309 9300

 

Level 3, Cairns Square

42 – 52 Abbott Street

Cairns Queensland 4870

Australia

Telephone: +61 (7) 4046 4600

 

21 Waterway Avenue, Suite 300

The Woodlands, Texas 77380

United States of America

Telephone: +1 (281) 292-1800

 

INVESTOR RELATIONS

 

United States of America

 

Wayne W. Andrews

Vice President Capital Markets

Email: wayne.andrews@interoil.com

 

Meg LaSalle

Investor Relations Coordinator

Email: meg.lasalle@interoil.com

 

Singapore

 

Don Spector

Chief Financial Officer

Email: don.spector@interoil.com

 

COMMON STOCK

 

InterOil Corporation’s common stock is listed on the New York Stock Exchange (NYSE) and Port Moresby Stock Exchange (POMSoX) under the ticker symbol IOC.

 

AUDITORS

 

PricewaterhouseCoopers

201 Sussex Street

Darling Park Tower 2

NSW 2000 Sydney

Australia

Telephone: +61 (2) 8266 0000

STOCK TRANSFER AGENT AND

REGISTRARS

 

Main Agent (Canada)

 

Computershare Investor Services

100 University Avenue, 9th Floor

Toronto, Ontario

Canada M5J 2YI

Telephone: +1 (800) 564-6253

 

Co-Transfer Agent (USA)

 

Computershare Trust Company

350 Indiana Street

Golden, Colorado 80401

Telephone: (800) 962-4284

International: +1 (514) 982-7555

 

LEGAL

 

Gadens Lawyers

77 Castlereagh Street

Sydney NSW 2000

Australia

Telephone: +(61) 2 9931 4999

 

Gadens Lawyers

One Raffles Quay

Level 9, North Tower

Singapore 048583

Telephone: +65 6506 7350

 

Gadens Lawyers

Pacific Place

Cnr Musgrave Street and Champion Parade

Port Moresby Papua New Guinea

Telephone: +67 5 321 1033

 

Herbert Smith Freehills

QV.1 Building

250 St Georges Terrace

Perth WA 6000 Australia

Telephone: +61 8 9211 7777

 

Stikeman Elliott LLP

4300 Bankers Hall West

888 – 3rd Street S.W.

Calgary, Canada T2P 5C5

Telephone: +1 (403) 266-9000

 

Haynes and Boone LLP

1221 McKinney Street

Suite 2100

Houston, Texas 77010

United States of America

Telephone: +1 (713) 547-2000

FORWARD-LOOKING STATEMENTS

 

This presentation 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 announcement that address activities, events or developments that InterOil expects, believes or anticipates will or may occur in the future are forward-looking statements.

 

These statements are based on our current beliefs as well as assumptions made by, and information currently available to us. No assurances can be given however, that these events will occur. Actual results could 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 31 December 2013 on Form 40-F and its Annual Information Form for the year ended 31 December 2013. 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 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.

 
     

 

 

 
 

 

 

 

 

 

 

 

www.interoil.com