Corporate Overview

1
Corporate Overview

• InterOil Corporation

November 2003
www.interoil.com
2
Our Vision

• Building an integrated oil gas company
• Our assets extend from the well head to the
  retail pump
• High margin niche business

3
Our Asset Portfolio

• Upstream assets
• Holder portfolio of over 8 million exploration
  acres in PNG
• New Oil System
• Commenced multi well drilling program with World
  Class potential
• Began testing operations of limestone section on
  Moose -1
• Mobilizing rig to Sterling Mustang
• Midstream assets
• 32,500 bbl p/d oil refinery under construction
• Supply and sales contracts with oil majors BP and
  Shell
• Downstream assets
• Strategic joint-venture alliance with Shell
• Over 50 domestic market share

4
InterOil Focus Area
REFINED PRODUCT
THIS REGION IS A NET IMPORTER OF OVER 100,000 BPD
OF REFINED PRODUCTS
KUTUBU BLEND CRUDE
5
Share Structure

• Capitalization as of 03 November 2003
• C687 million (C27.70 per share)
• US521 million (21.00 per share)
• 24,797,961 shares outstanding
• Our shareholders
• Executive management
  owns 35
• Balance publicity
  traded float
• Shell will own 7.5

6
Shareholder Contributions

• Raised US269 MM (C380 MM) to date
• US184 MM Equity
• US85 MM Debt
• Initial Equity US100 MM (C137 MM)
• US40 MM contributed by Founders
• US60 MM - Equity in 1996 1997
• 2003 US84 MM (C115 MM)
• US64.58 MM Equity issuance of shares (3
  tranches)
• US19.80 MM Drilling participation interests

7
Papua New Guinea Geopolitical

• Former Australian Territory Independence 1975
• Close to Australia 500MM in annual aid
• Constitutional Monarchy
• Parliamentary Democracy Member of Commonwealth
• Positive fiscal policy
• General information
• Capital Port Moresby Approximately 1,400
  Islands
• Population 5.0 million (2000 est)
• Port Moresby 350,000
• Official Language English and Pidgin
• Main Religion Christianity
• GDP US3.3 Billion
• Currency Kina (1 Kina US0. 30)

8
Midstream

• Our Foundation

9
Midstream - InterOil Refinery

• We will supply 100 of PNG domestic market needs
• Only physical supply for 2,200 kms
• 30 year agreements to capture significant
  import-transportation margins
• Logistics add value to existing crude oil
  production and leverage into other liquids
  processing
• Strategic Partners
• Overseas Private Investment Corporation
• PNG Government
• Shell
• BP

10
Strategic Location

• 32,500 bpd hydro skimming refinery
• Infrastructure for future energy needs in PNG
• Refinery start up 1st quarter 2004
• Deep water marine facility

11
Midstream Strategic Partners

• PNG Government
• Project agreement with independent state of PNG
  which guarantees the long term viability of
  refinery
• 99 year lease on 180 acre refinery site
• 30 year import parity pricing agreement with
  the PNG Government
• Provides 5-year Tax Holiday

12
Midstream Strategic Partners

• Overseas Private Investment Corporation (OPIC)
• An agency of the US Government
• Provided InterOil a loan facility of US85
  million
• Long-term loan 12 years at rates equal to 7.5
• US75.0 million received to date
• Only investment loan in PNG

13
Midstream Strategic Partners

• Shell
• Shell to market majority of export product and
  50 of domestic product
• Export pricing at market with floor and targets
• Contracts valued at over US1.4 billion at
  contract closing
• BP
• Transaction executed with BP to become exclusive
  supplier of crude to refinery
• Guarantees supply to refinery
• Provided a US8.4 million bond for InterOil debt
  service account

14
Midstream Project Integrity

• Total project cost estimated US204 million
• Attractive tax incentives 5 year tax holiday
• Canadian tax treaty no corporate taxes
• Significant free cash flow once operational
• High forecast dividend payout

15
Downstream

• Asset Optimization

16
Downstream

• Concluded agreement in April 2001 to purchase
  Shell retail and distribution assets in PNG
• Strategically and geographically the largest and
  most comprehensive distribution asset base in PNG
• 70 core distribution outlets
• Value of asset transaction US18 million
• InterOil will lease assets back to Shell
• Shell will continue to maintain and operate assets

17
Downstream Assets - Distribution Retail
18
Upstream

• InterOil Unlocks Value

19
Upstream Assets

• Over 8 million exploration acres
• 3 principle prospecting licenses PPL 236, 237
  and 238
• Over 50 potential structures identified
• Oil prone region
• River and Road Access

20
Upstream PNG Today

• 600 MM barrels an estimated 15 trillion cubic
  feet discovered to date
• 58 wells drilled on trend in PNG
• Historic success rate at 5 million barrels of 38
• PNG excellent fiscal environment
• Dec 2002, PNG reduced tax rate from 65 to 30
  flat rate
• 2 royalty and PNG Government has option to
  purchase a 22.5 Working Interest

21
Oil Gas Sources
22
Drilling Program Underway

• Commenced 16 well drilling program on 16
  separate, independent structures
• Oil Prone each with over 300 Million bbl
  resource potential
• Multi-well program provides numerous
  opportunities for success
• Testing operations have began on Moose ST-1
• Innovative drilling and logistics improve
  viability and reduces historic well costs
• Economic field size reduced to 5 7 mm bbls from
  75 mm bbl
• Structure, Seal, Reservoir and Hydrocarbons all
  confirmed

23
Lithology Chart of Basin
24
Announced Prospects

• Resource Potential of Prospects Announced To Date
• Moose
• Sterling Mustang
• Rhino
• Elk

25
Moose-1 Exploration Well
26
Moose Oil Shows Announced 28 July

• On-site inspection of core-data indicates more
  than 14 oil shows
• Drilled 166 meters of limestone
• Cored 135 meters from 673 meters to 808 meters.
• Oil shows indicate live oil in the system
• Drilling validates geological model
• Better oil shows than the Puri well
• Core samples confirmed by Baker Hughes Inteq
• The 14 oil shows are in fractures and porous
  sections within 2 Limestone sections
• Core samples are being analyzed by Australian
  Government CSIRO
• Initial gas chromatograph and mass spectrometer
  results indicate a light crude oil of marine
  origin

27
Moose ST-1 Testing Operations

• Perforated casing at 657-663m (2,155-2,175ft) to
  obtain reservoir pressure.
• Readings indicated 326 psi at 808m (2,650ft)
  confirming the need for artificial lift to flow
  the well.
• Perforated casing at 805-811m (2,641-2,660ft)
• Obtained 16 barrels of fluid sample in three
  hours by swabbing the well. Fluid level remains
  unchanged indicating fluid can flow easily from
  reservoir.
• Initial fluid samples are indistinguishable from
  drilling fluids, confirming that a significant
  volume of fluid may need to be pumped from the
  well to determine reservoir fluid
• A down-hole pump is being installed to pump fluid
  out of the well bore in order to determine
  reservoir fluid type.

28
Estimated Moose Cross-Section
29
Plan Forward Moose

• Moose ST-1
• Continue testing operations.
• Moose 2 Exploration/Appraisal Well
• Site is prepared and awaiting drilling rig from
  Moose-1.
• Plan to drill and coring ahead to the primary
  objectives Pale Subu Sandstone and the
  previously identified Limestone zone.
• Will utilize casing design based on knowledge
  gained from drilling Moose ST-1.
• Why The geology still supports potential of the
  sandstones and background gas was increasing as
  we drilled deeper in the Moose-1.

30
Plan Forward Sterling Mustang

• Sterling Mustang
• Acquired Simmons 3 conventional drilling rig
  from Indonesia
• Expect to spud in December
• Logistics in place to mobilize rig to drill site
• Preparation of drill site is now complete

31
Summary

• Upstream
• 16 well exploration program on sixteen
  independent structures providing maximum
  opportunity for success
• Confirmed a New Oil System on InterOil acreage
• Magnitude of the New Oil System to be defined
• Midstream
• Refinery project Mechanical Completion 1st
  Quarter 2004
• Strategic partners BP and Shell
• 5-Yr tax holiday at PNG No refinery taxes
• Significant free cash flow once fully operational
• Downstream
• Enhanced security of product sales

32
September 2002
September 2003