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Oslo, 27 October 2014 - Interoil Exploration and Production ASA ("Interoil" or the "Company") has decided to accelerate preparations for the planned refinancing of the Company and has mandated Arctic Securities AS to provide support in this process as well as to explore other strategic options. The Company aims to conclude this process before the end of the year.
As a consequence of recent developments related to the Company's activities in Peru and Colombia together with its high leverage, the Company is experiencing increasing difficulties in obtaining necessary funding and financial guarantees from local banks to support operations. The current softening of the crude oil markets has added further to the concerns.
As stated on 10 October, Colombian authorities are expected to require a USD 10.5 million bank guarantee for Interoil to maintain its rights to the promising LLA-47 license. In addition, USD 3.6 million of unsecured bank debt and a USD 7.5 million bank guarantee are falling due within the next few months. Interoil's Colombian subsidiary will likely be required to post 100% cash collateral for the USD 10.5 million bank guarantee and due to the company's limited cash position this will entail that the drilling of the first exploration well on LLA-47 will be postponed to after the refinancing has been completed.
In the longer term, the Company will need to fund its exploration program on the LLA-47 license. This license is expected to hold well above 30 million barrels recoverable reserves.
Further investments are also planned to maintain production at the Puli C and Altair fields in Colombia, which are currently producing above 1,700 barrels of oil equivalent per day, and hold 2P reserves of 5.7 million barrels.
The Company and its financial advisor are currently reviewing all alternatives available to the Company in order to secure a sustainable financing solution, as well as exploring other strategic options, with the intention to present further details and a preliminary plan to shareholders, bondholders and other stakeholders in November.
The Company invites to a Q&A conference call to be held today, 27 October 2014 at 14:00 (CET), where participants are invited to ask questions to management and the chairman of the Board of Directors. Participants may ask questions in Norwegian.
Participants are asked to dial in 5-10 minutes prior to the start time using the number and confirmation code below:
| Confirmation Code: | 9633530 |
| Participants, Local - Oslo, Norway: | +472316 2787 |
| Participants, Local - New York, United States of America: | +1212 444 0896 |
| Participants, Local - London, United Kingdom: | +44(0)20 3427 1913 |
| Participants, National free phone - Colombia: | 01800 915 7431 |
Please direct any further questions to:
E-mail: ir@interoil.no
www.interoil.no
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Interoil Exploration and Production ASA is a Norwegian based exploration and production company - listed on the Oslo Stock Exchange - with focus on Latin-America. The company is operator of several production and exploration assets in Peru and Colombia. Interoil currently employs approximately 230 people and is headquartered in Oslo.