Interoil reports encouraging initial data from well in Argentina

Oslo, January 20th – Interoil Exploration and Production ASA (“Interoil”) is pleased to announce that the Campo Límite exploration well (CLix-1001) located in the Palermo Aike exploitation concession, Province of Santa Cruz, Argentina, has been drilled to a total measured depth of 2,247 metres and wireline logging has now been completed.

Based on encouraging initial data from drilling and logging operations, a decision has been made with the Operator, Selva Maria Oil S.A., to move to the next stage of operations to complete and test the well.

The target Springhill Formation was encountered at 2,124 metres. Initial analyses of the wireline log data have been completed and have highlighted a zone of interest comprised of fine-grained sandstones. This unit also coincided with elevated gas shows of 193,000 parts per million (“ppm”) against a background of 20,000 ppm.

The presence of elevated gas shows in the target section combined with wireline log data is positive and has resulted in the decision to move to completion and testing.  The Company cautions that completion of the well test and analyses of the results is needed to conclusively establish the presence of producible gas.

The well will be completed by the Petreven H-205 rig followed by conventional inflow testing with a workover rig. Mobilisation is currently being scheduled and further announcements will be made, as appropriate, in due course.

These operations are carried out in one of the five exploitation concessions where Interoil has recently acquired an 8.34% participating interest from former operator, Roch S.A., which transfer is subject to the authorisation of the Executive Branch of Province of Santa Cruz as part of the overall process of title transfer that is proceeding as anticipated.

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Interoil Exploration and 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 Colombia and Argentina. Interoil currently employs approximately 50 people and is headquartered in Oslo.

This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.