InterOil Increases Condensate Recovery at 2nd Sidetrack of Antelope-1

InterOil reports increased condensate recovery in the second side track of the Antelope-1 well. Drill Stem Test (DST) #11, performed over an interval from 7,529 feet to 7,700 feet (2,295 to 2,347 meters) in the Antelope-1ST2, recovered surges of between 25 to 100 barrels of condensate per million cubic feet of natural gas. Antelope-1ST2 kicked out from the Antelope-1 wellbore at 6,726 feet (2,050 meters) on May 1st and reached the current total depth of 7,700 feet (2,347 meters) on May 5th. The increased gas-to-condensate ratio indicated from this test, which was conducted deep in the hydrocarbon column confirms our original assumptions, which were based on observations from worldwide gas and condensate fields, and support our decision to case the well for further testing.

The formation in which the DST packer was set did not completely seal allowing gas from above to channel into the test interval, resulting in limited testing capability with these DST tools within the large open hole interval. Given the encouraging results of the DST, the company has elected to case the well and isolate the 1,968 feet (600 meters) of gas pay behind pipe. Forward plans are to drill out underbalanced to further test this zone and additional zones of interest in the lower portion of the Antelope reservoir with the improved isolation of a cased wellbore and without further contamination by drilling fluids during managed pressure drilling.

Analysis of the test pressure data and condensate by third parties is in progress. The Company is in the early stages of evaluation and has not yet determined the final volume, and in particular whether condensate volumes would be sufficient to be commercially exploitable.