InterOil Announces Agreement To Lawsuit (IOC)

InterOil Corporation

today announced that it has entered into an agreement to settle all claims against it and its subsidiaries brought by various plaintiffs in the District Court of Montgomery County, Texas commenced in 2005 and styled Todd Peters et. al v. Phil Mulacek et. al. The plaintiffs are members of a partnership that bought a modular oil refinery that was subsequently, through a series of transactions, sold to a subsidiary of the Company. The plaintiffs sought damages based on numerous alternative methods of calculation which if successful, could have exceeded $125 million, together with unspecified punitive damages, attorney's fees, expenses and court costs. Pursuant to the agreed settlement, the Company will issue 199,667 common shares to the plaintiffs, valued at $12 million based on a volume weighted average price calculated over the ten trading days prior to execution of the settlement agreement. The value of this settlement will be expensed by the Company in its third quarter financial results. Under the terms of the settlement agreement, the Company, its affiliates directors, officers and certain other related parties are released from all claims from the plaintiffs, whether asserted in the lawsuit or not.