InterOil seeks development funds

INTEROIL is embarking on a big capital raising spree to help fund construction of its planned condensate stripping plant in PNG, and to advance development of its liquefied natural gas plays.
InterOil seeks development funds InterOil seeks development funds InterOil seeks development funds InterOil seeks development funds InterOil seeks development funds

Up to $US280 million of gross proceeds is expected from a public offering of convertible senior notes due in 2015 plus a common shares offering.

InterOil said it intends to use the net proceeds to not only help fund the $550 million condensate stripping plant with joint venture partner Mitsui in Gulf province, but also for its liquefied natural gas plant and related facilities.

The company said the funds are also expected to go into further exploration activities and to repay a $25 million loan with its long associated partner Clarion Finanz AG that matures in January 2011.

Last month Energy World Corporation signed an agreement with InterOil to fund and build a 2 million tonne per annum liquefied natural gas plant in PNG.

There are options to expand the $910 million mid-sized LNG plant, which will be located about 80 kilometres from InterOil's discoveries in the Elk and Antelope fields.

The binding heads of agreement between EWG, InterOil and Liquid Niugini Gas joint venture partner Pacific LNG Operations allowed for an expansion up to 3MMtpa.

Yet InterOil is also keen to develop its long-heralded Liquid Niugini project to build a 6-9MMtpa LNG plant near its Napa Napa oil refinery close in Port Moresby.

"Our agreement with the PNG government allows for 10.6 million tonnes per annum of LNG," InterOil vice-president capital markets Wayne Andrews told last month.

"We believe the 9 trillion cubic feet of gas equivalent contingent resources (at Elk and Antelope) will support 11 million tonnes per annum for 15 years and expect additional announcements in the near future."

He added the company had identified more than 40 prospects on its 3.9 million acre position in the Eastern Papuan Basin.

Morgan Stanley and Macquarie Capital (USA) were appointed to leading roles for the two equity raising offers.

The offers are subject to market and other conditions.


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