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 ended
($ thousands except per share data)

2013

2012

2011

Mar-13

Dec-31 (2)

Sep-30 (2)

Jun-30 (2)

Mar-31 (2)

Dec-31 (2)

Sep-30 (2)

Jun-30 (2)

Upstream

1,862

4,136

2,216

1,727

2,284

1,891

2,645

4,638

Midstream – Refining

305,172

301,925

274,671

236,006

302,310

237,640

231,455

262,111

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 entries

(199,672)

(207,686)

(178,652)

(186,991)

(210,174)

(181,428)

(163,584)

(180,945)

Total revenues

350,331

356,439

326,864

299,104

338,151

289,612

281,898

303,783

Upstream

(1,311)

(873)

956

(5,730)

(6,374)

665

(6,169)

593

Midstream – Refining

12,701

12,370

13,417

(42,647)

18,933

2,604

3,461

27,967

Midstream – Liquefaction (2)

(123)

192

11

672

(1,410)

(4,129)

(3,608)

(4,041)

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 entries

(13,418)

(12,199)

(14,503)

(9,871)

(14,216)

(11,280)

(10,263)

(5,269)

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 – Refining

5,855

13,401

5,358

(32,969)

11,320

15,684

(1,201)

17,314

Midstream – Liquefaction

(681)

(394)

(573)

93

(1,969)

(4,574)

(3,980)

(4,309)

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 entries

(744)

384

(1,988)

2,205

(2,136)

252

(190)

3,657

Net profit/(loss)

4,003

18,545

5,336

(31,713)

9,436

13,197

(19,778)

23,540

Net profit/(loss) per share (dollars)









Per Share – Basic

0.08

0.38

0.11

(0.66)

0.20

0.27

(0.41)

0.49

Per Share – Diluted

0.08

0.38

0.11

(0.66)

0.19

0.27

(0.41)

0.48










(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.

Organization

Facility

Balance outstanding
March 31, 2013

Effective interest rate

Maturity date

ANZ, BSP and BNP syndicated secured loan facility

$100,000,000

$100,000,000

6.79%

November 2017

BNP working capital facility

$240,000,000

$33,118,821(1)

2.61%

See detail below

Westpac PGK working capital facility

facility

$42,075,000

$1,178,475

9.50%

November 2014

BSP PGK working capital facility

$23,375,000

-

9.45%

August 2013

Westpac secured loan

$12,857,000

$10,714,000

4.62%

September 2015

2.75% convertible notes

$70,000,000

$70,000,000

7.91%(3)

November 2015

Mitsui unsecured loan (2)

$11,912,297

$11,912,297

6.20%

See detail below

(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 ended
($ thousands)

2013

2012

2011

Mar-31

Dec-31 (1)

Sep-30 (1)

Jun-30 (1)

Mar-31 (1)

Dec-31 (1)

Sep-30 (1)

Jun-30 (1)

Upstream

(1,311)

(873)

956

(5,730)

(6,374)

665

(6,169)

593

Midstream – Refining

12,701

12,370

13,417

(42,647)

18,933

2,604

3,461

27,967

Midstream – Liquefaction (1)

(123)

192

11

672

(1,410)

(4,129)

(3,608)

(4,041)

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 Entries

(13,418)

(12,199)

(14,503)

(9,871)

(14,214)

(11,280)

(10,263)

(5,270)

Earnings before interest, taxes, depreciation and amortization

17,955

25,881

18,997

(36,499)

27,537

4,802

(11,461)

38,966

Subtract:









Upstream

(11,941)

(11,734)

(11,438)

(10,517)

(9,408)

(8,712)

(7,806)

(7,142)

Midstream – Refining

(2,454)

(11,390)

(1,654)

(2,011)

(2,771)

(3,285)

(2,494)

(2,211)

Midstream – Liquefaction

(558)

(586)

(584)

(579)

(559)

(445)

(372)

(268)

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 Entries

12,642

12,552

12,482

12,044

12,045

11,500

10,041

8,894

Interest expense

(4,333)

(13,096)

(3,128)

(3,507)

(3,436)

(3,610)

(3,341)

(3,484)

Upstream

-

-

-

-

-

-

-

-

Midstream – Refining

(1,270)

16,574

(3,484)

14,580

(1,948)

19,243

678

(5,677)

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 – Refining

(3,122)

(4,153)

(2,921)

(2,891)

(2,894)

(2,878)

(2,846)

(2,764)

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 Entries

32

31

33

32

33

32

32

32

Depreciation and amortisation

(5,698)

(6,414)

(5,435)

(3,915)

(6,091)

(6,150)

(5,162)

(4,187)

Upstream

(13,774)

(13,081)

(10,936)

(15,532)

(17,244)

(9,402)

(15,080)

(6,703)

Midstream – Refining

5,855

13,401

5,358

(32,969)

11,320

15,684

(1,201)

17,314

Midstream – Liquefaction

(681)

(394)

(573)

93

(1,969)

(4,574)

(3,980)

(4,309)

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 Entries

(744)

384

(1,988)

2,205

(2,136)

252

(190)

3,657

Net profit/(loss) per segment

4,003

18,545

5,336

(31,713)

9,436

13,197

(19,778)

23,540










(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 and work in progress

13,107,848

(13,673,345)

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 impairment (note 6)

(449,505)

(7,363,401)

Finance costs

(5,336,234)

(4,678,500)

Depreciation and amortization

(5,698,142)

(6,091,266)

Gain on conveyance of oil and gas properties (note 6)

500,071

-

Loss on available-for-sale investment (note 7)

(340,045)

-

Foreign exchange (losses)/gains

(5,476,146)

10,119,333

Share of net loss of joint venture partnership accounted for
using the equity method (note 14)

(96,051)

(10,240)


(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 shares)

48,612,015

48,149,076

Diluted (Expressed in number of common shares)

49,284,136

49,216,450




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 instruments

372,938

233,922

729,174


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 6)

544,934,617

510,669,431

406,477,789


Deferred tax assets

62,399,028

63,526,458

35,275,566


Other non-current receivables (note 11)

29,700,534

5,000,000

-


Investments accounted for using the equity method (note 14)

-

-

-


Available-for-sale investments (note 7)

3,587,901

4,304,176

7,039,394


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 instruments

9,913

-

-


Working capital facilities (note 8)

34,297,296

94,290,479

31,277,763


Unsecured loan and current portion of secured loans (note 9)

31,379,982

31,383,115

23,679,023


Current portion of Indirect participation interest (note 10)

15,246,397

15,246,397

540,002


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 liability

59,930,967

59,046,581

56,470,958


Deferred gain on contributions to LNG project (note 14)

5,287,152

5,191,101

4,711,155


Indirect participation interest (note 10)

14,282,001

16,405,393

34,134,840


Other non-current liabilities (note 11)

96,000,000

20,961,380

-


Asset retirement obligations

4,983,064

4,978,334

4,797,193


Total non-current liabilities

267,978,889

196,028,926

136,921,299


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 Comprehensive Income

22,389,537

25,032,953

30,324,017


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 Corporation

779,351,712

776,056,966

773,786,193


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 restricted stock

2,506,982

1,602,920

Accretion of asset retirement obligation liability

89,208

82,774

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 receivables

(15,816,189)

11,723,760

(Decrease)/increase in unrealised hedge gains

-

-

Decrease in other current assets and prepaid expenses

973,003

2,230,631

(Increase)/decrease in inventories

(15,303,322)

11,833,220

Increase/(decrease) in trade and other payables

56,256,930

(71,348,790)

Net cash generated from/(used in) operating activities

40,583,419

(28,490,827)




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 payables

(5,799,120)

8,453,361

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 interest in PPL237

76,000,000

-

(Repayments of)/proceeds from working capital facility

(59,993,183)

14,797,260

Proceeds from issue of common shares, net of transaction costs

-

1,913,421

Net cash generated from financing activities

13,863,817

31,710,681




Increase/(decrease) in cash and cash equivalents

18,745,316

(29,689,804)

Cash and cash equivalents, beginning of period

49,720,680

68,575,269

Exchange (losses)/gains on cash and cash equivalents

(4,369)

991,897

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 period

68,461,627

39,877,362




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.

SOURCE: InterOil Corporation

For further information:

http://www.interoil.com

Organization Profile

InterOil Corporation

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890