InterOil Commences Drilling of the Black Bass Exploration Well in Papua New Guinea.

TORONTO -- InterOil Corporation (TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC), a Canadian company with operations in Papua New Guinea, announced today that it had commenced drilling of its first exploration well on the Black Bass Prospect located within Petroleum Prospecting License 236. InterOil expects this well to reach target depth within 45 days. The target is a reef limestone which has been identified by a seismic survey and is estimated to be approximately 3,937 feet (1,200 meters) deep. Technical specifications on the Black Bass Prospect can be found on our web site at www.interoil.com.

The Black Bass Prospect is located approximately 100 miles (160 kilometres) northwest of InterOil's refinery near Port Moresby, the capital of Papua New Guinea.

Bi-monthly drilling reports will be released during the drilling period, with other announcements as operational activities dictate and upon achieving target depth.

InterOil is developing a vertically integrated energy company whose primary focus is Papua New Guinea and the surrounding region. Its assets comprise an oil refinery, upstream petroleum exploration licenses, and retail and commercial distribution assets. The majority of the refined products from InterOil's refinery are secured by off-take contracts with Shell and InterOil's wholly-owned subsidiary, InterOil Products Limited. BP Singapore is InterOil's agent for crude oil supplied to the refinery. InterOil is also undertaking an extensive petroleum exploration program within its eight million acre license area located in Papua New Guinea.

InterOil's common shares trade on the Toronto Stock Exchange under the symbol IOL in Canadian dollars; on the American Stock Exchange under the symbol IOC in US dollars; and on the Australian Stock Exchange in CHESS Depositary Interests in Australian dollars under the symbol IOC which trade on a 10:1 basis to common shares. For more information please see the InterOil website at: www.interoil.com.

Cautionary Statements

This press release contains forward-looking statements. All statements, other than statements of historical facts, included in this release, including without limitation, statements regarding our drilling plans, business strategy, plans and objectives of management for future operations and those statements preceded by, followed by or that otherwise include the words "believe", "expects", "anticipates", "intends", "estimates" or similar expressions or variations on such expressions are forward-looking statements. The Company can give no assurances that such forward-looking statements will prove to be correct. Risks and uncertainties include, but are not limited to, the existence of underground deposits of commercial quantities of oil and gas; fluctuations in prices for oil and gas production; curtailments or delays in development due to mechanical, operating, marketing or other problems; capital expenditures that are either significantly higher or lower than anticipated because the actual cost of identified projects varied from original estimates; and from the number of exploration and development opportunities being greater or fewer than currently anticipated.

The Company currently has no reserves as defined under Canadian National Instrument 51-101 reserve definitions. See the Company's filings with the Canadian securities regulators for additional risks and information about the Company's business.

InterOil Corporation (TSX:IOL) (ASX.:IOC) (AMEX:IOC)