InterOil Says to Continue Negotiations with ExxonMobil on Gas Monetization, Reports $75M Secured Loan Facility

InterOil Corporation (NYSE: IOC) today announced thatnegotiations with ExxonMobil Papua New Guinea Ltd. (EMPNG), a subsidiary ofExxonMobil (NYSE: XOM), relating to the development of Petroleum RetentionLicense 15, were ongoing notwithstanding the lapse of an exclusivityarrangement.InterOil will continue to work with EMPNG with the aim of accelerating themonetisation of its gas resources on terms that will benefit all stakeholdersincluding Papua New Guinea.InterOil today also announced it had finalized a $75 million secured loanfacility to accelerate its exploration and drilling program.InterOil's Executive Vice President of Corporate Development and GovernmentRelations, Keli Taureka, has discussed the latest developments with theGovernment of Papua New Guinea and the Governor of the Gulf Province. "All ofInterOil's businesses and assets are in PNG and we remain fully aligned withPNG's ambitions to develop its natural resources.  InterOil makes asignificant contribution to PNG as a major employer and provider of fuel andwe value our strong relations with the Government and local communities," MrTaureka said.$75 Million Loan FacilityInterOil today said that the Company and its subsidiaries, InterOil ProductsLimited (Downstream entity) and certain Upstream Entities, have entered into aone year $75 million equivalent combined secured loan facility with WestpacBank PNG Limited (Westpac) and Bank South Pacific Limited (BSP) to be drawn intranches, either USD and/or Papua New Guinea Kina (PGK), subject to standardclosing conditions.Borrowings under the facility will be used for exploration and drillingactivities with $37.5 million funding to start immediately, and a further$37.5 million upon the execution of an agreement in relation to monetizationof the Elk and Antelope resource. The principal repayment will be made on theearlier of, the first resource payment or 12 months from the first drawdown.Existing downstream working capital facilities with Westpac and BSP totallingK140.0 million have been underutilized, due to the downstream division'sprudent working capital management initiatives and strong liquidity. As such,all parties have agreed to channel existing downstream approved limits ofK45.0 million to this secured loan facility. The downstream working capitalfacility will be kept.at the remaining K95.0 million.Both facilities will be shared between Westpac and BSP, secured againstdownstream assets and undertakings, IOC parent guarantee, and guarantees fromcertain Upstream entities.In announcing its 2013 second quarter results on July 13, the Company saidthat it would build on its success by seeking additional exploration partners.