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Interoil's daily average production fell by 4,8% in Q1 2013 relative to the previous quarter. However, despite a slightly higher oil price, revenues fell by 10%, to USD 24 million, as inventory levels increased during the quarter. Operating profit came in at USD 15 million, while the company recorded a profit before tax of USD 14 million, significantly up from last quarter, mainly due to lower depreciation and impairment charges.
Interoil completed the USD 35 million private placement in March 2013 and extended the maturity of the bond loan until 2016. The company is now financed to meet financial commitments and initiate a drilling campaign in Colombia.
The drilling program in Colombia is planned to start in late May. The first stage of the campaign will entail the drilling of 12 development wells in Mana and Mana South on the Puli C license, the last well expected to be completed in October 2013. Following this, Interoil will proceed with a long term development plan, targeting both development wells and appraisal wells in the Mana West region. The company maintains its ambition to increase production to 3.000 bbls per day and significantly increase reserves.
Interoil is stepping up its legal efforts in Peru to secure a long term license extension. The arbitration process against PeruPetro regarding the force majeure injunction, giving Interoil the right to operate the licenses until 2014 and 2016, is expected to be concluded within Q2 2014. A positive outcome from the arbitration court should enable Interoil to start negotiations for a long term license extension.
The USD 10 million cost cutting program is progressing as planned, however limited effects were recorded in 1Q, due to employee and consultancy severance packages, costs connected to office relocation in Oslo, and other restructuring expenses. The full effect of the cost cutting program is expected to be realized in the third quarter of 2013.
For more information please contact:
Thomas J. Fjell
CEO
Mob: +47 958 15 300
E-mail: tfjell@interoil.no
Erik Sandøy
CFO
Mob: +47 488 94 426
E-mail: esandoy@interoil.no
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InterOil Exploration & 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, Colombia and Ghana. InterOil currently employs approximately 275 people and is headquartered in Oslo.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.