The average production in March 2008, compared to the average production in February 2008, was:
Production* March 2008 February 2008
Peru 2'800 3'031
Colombia 1'687 1'738
Total 4'487 4'769
*The production is average daily production (bopd) and is working interest before royalty
Our Peruvian production facilities in Block III and IV was hit by another heavy rain fall and flooding during March, causing further production decrease in both blocks. The Blocks are located in a desert environment and this type of rainfall happens very seldom, in average every ten year. Several wells were shut down due to electricity problems and our swabbing units could not reach all wells because of flooded roads. During March the production decline caused by the bad weather was between 100 to 400 bopd. Our team in Peru has worked intense to reduce the effect of the flooding and get the production back to normal. The weather has improved lately and the production has shown a steady growth in the last couple of weeks. We expect to be back in normal production within this month.
InterOil has also in Colombia experienced some minor technical problems which are now resolved and the production is today back to normal.
InterOil has not drilled any new wells in Peru and Colombia during 2008.
Oil has been sold at average sales price of USD 99.0 in Peru and USD 96.77 in Colombia per barrel during March, to be compared with the average price during 2007 of USD 70.42 in Peru and USD 65.75 in Colombia.
As previously noted InterOil has selected several wells in both Colombia and Peru for special fracturing. The fracturing of these wells in Colombia will take place during the end of April and May, and we are confident that the result will contribute to a very positive production increase in the months to come.
InterOil will in addition to EOR and fracturing drill 4 new wells in Peru during Q2 2008. In Peru we have now finally signed an agreement with the local community to drill wells classified as exploration wells with the aim to test the high potential area in the southern part of Block III, next to the Olympic Block. Rig has been secured and drilling will start during first half of May. Wells drilled by Olympic in this area during 2007 shows good production rates with an average daily production of 300 bbl per well. If successful, more wells will be drilled in this particular area. The other 2 wells will be drilled as infill production wells in Block IV. Both Blocks are operated by InterOil with a working interest of 100%.
InterOil plans also to start the drilling campaign in Colombia during the last week of May. To optimize the drilling and reduce cost, the 3 deep and 8 shallow wells will be drilled at the same time, using two rigs.
For more information please contact:
Fredrik von Zernichow
Investor Relation Manager
Tel: +47 67518661
Mob: +47 99273843
Fax: +47 6751 8660
InterOil Exploration & Production ASA is a Norwegian based exploration and production company - listed on the Oslo Stock Exchange - with focus on Latin-America and West-Africa. The company is operator of several production and exploration assets in Peru and Colombia, and is an active license partner in Angola and Ghana. InterOil currently employs approximately 200 people and is headquartered in Oslo.