InterOil Prepares to Drill the Black Bass Prospect

    News Editors

    TORONTO--(BUSINESS WIRE)--April 18, 2005--InterOil Corporation (TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC), a Canadian company with operations in Papua New Guinea, announced today that it has completed the mobilization of the rig and is currently 'rigging-up' the drilling rig on the Black Bass Prospect, the company's next exploration target. Although still subject to wet weather conditions, the well is expected to be spudded by Friday April 22, 2005. This well will target a reef limestone which has been identified by a seismic survey, and is estimated to be approximately 3,937 feet (1,200 meters) deep.

    The Black Bass well is the first of the recently announced eight well drilling program which will extend into 2006.

    "Recent heavy rainfalls and other factors beyond our control delayed the spud date, which was anticipated to be by the end of March 2005. We are confident that the delay has not affected our overall exploration program," said Mr Phil Mulacek, CEO of InterOil.

    InterOil is developing a vertically integrated energy company whose primary focus is Papua New Guinea and the surrounding region. Its assets comprise an oil refinery, upstream petroleum exploration licenses, and retail and commercial distribution assets. The majority of the refined products from InterOil's refinery are secured by off-take contracts with Shell and InterOil's wholly-owned subsidiary, InterOil Products Limited. BP Singapore is InterOil's agent for crude oil supplied to the refinery. InterOil is also undertaking an extensive petroleum exploration program within its eight million acre license area located in Papua New Guinea.

    InterOil's common shares trade on the Toronto Stock Exchange under the symbol IOL in Canadian dollars; on the American Stock Exchange under the symbol IOC in US dollars; and on the Australian Stock Exchange in CHESS Depositary Interests in Australian dollars under the symbol IOC which trade on a 10:1 basis to common shares. For more information please see the InterOil website at: www.interoil.com.

    Cautionary Statements

    This press release contains forward-looking statements. All statements, other than statements of historical facts, included in this release, including without limitation, statements regarding our drilling plans, business strategy, plans and objectives of management for future operations and those statements preceded by, followed by or that otherwise include the words "believe", "expects", "anticipates", "intends", "estimates" or similar expressions or variations on such expressions are forward-looking statements. The Company can give no assurances that such forward-looking statements will prove to be correct. Risks and uncertainties include, but are not limited to, the existence of underground deposits of commercial quantities of oil and gas; fluctuations in prices for oil and gas production; curtailments or delays in development due to mechanical, operating, marketing or other problems; capital expenditures that are either significantly higher or lower than anticipated because the actual cost of identified projects varied from original estimates; and from the number of exploration and development opportunities being greater or fewer than currently anticipated.

    The Company currently has no reserves as defined under Canadian National Instrument 51-101 reserve definitions. See the Company's filings with the Canadian securities regulators for additional risks and information about the Company's business.



    InterOil Corporation (TSX:IOL) (ASX.:IOC) (AMEX:IOC)

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CONTACT: InterOil Corporation Gary M Duvall V.P., Corporate Development (281) 292-1800 Email: gary.duvall@interoil.com OR InterOil Corporation Anesti Dermedgoglou V.P., Investor Relations +61 7 4046 4600 Email: anesti@interoil.com Website: www.interoil.com

KEYWORD: NEW YORK INTERNATIONAL CANADA INDUSTRY KEYWORD: OIL/GAS ENERGY SOURCE: InterOil Corporation

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