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In Q4 IOX recorded sales of USD 26.8 million, EBITDA of USD 9.8 million and a loss before tax of USD 49.3 million.
Production continued to decline in Q4 and fell 30% year on year. Since Q4 2010, production has decreased by 42%, while capex has decreased by 60%. The company needs to raise capital to reverse this trend, create shareholder values and ensure that financial obligations can be met.
In Q2 2012 IOX initiated a process to divest all or part of its assets in Colombia. Through the process IOX received certain indicative offers. In the board's opinion, these bids were speculative and did not reflect the underlying value of the Colombian assets. A sale at the prices indicated in the indicative offers would not have yielded sufficient proceeds to repay the company's debts and would have deprived Interoil's shareholders of the underlying value of the assets in Colombia. The sales process has therefore been terminated.
The board strongly believes in the intrinsic value of the Colombian production asset (Puli C block), but the company is under-financed and new capital is required to extract this value. After a thorough consideration of all alternatives the board believes that the only alternative for Interoil now is to raise equity that is sufficient to strengthen working capital and fund a drilling campaign that will grow production and reserves. In the boards opinion this is the only solution that will secure any value to the company's existing shareholders. The board has therefore decided to initiate a process to refinance the company through issuing equity of approximately USD 50 million. The new capital will be employed to strengthen working capital and execute a 68 well drilling program in Colombia. Interoil expects the drilling campaign to significantly increase 2P reserves and oil production in Colombia. As a result of this decision the board expects to call for an extraordinary shareholders meeting to be held on 5 March 2013. The equity issue may be subject to certain amendments in the company's NOK 310 million bond loan such as a deferral of existing maturities.
Attached are:
(i) Q4 2012 financial statements
(ii) Updated company presentation
(iii) Annual Reserve Statement as of 31.12.2012
For more information please contact:
Thomas J. Fjell Erik Sandøy
CEO CFO
Mob: +47 958 5 300 Mob:+47 488 94 426
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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 280 people and is headquartered in Oslo.