The interests acquired total 1.05% participation in these fields and in any future discoveries made as a result of four exploration wells still to be drilled under the IPI agreement.
InterOil said its current interest in its exploration licenses is 75.61%, assuming that all remaining indirect participation interest investors take up their working interest rights in such licenses and excluding the interests that Papua New Guinea is able to assume under relevant legislation.
The premium paid by the company under these exchange transactions over the original investment made by the IPI investors will be recognized as an expense in accordance with the ‘Extinguishment of Liability’ accounting standard.
This treatment will result in an expense adjustment of approximately $23.1m to the profit and loss account for the quarter and annual results ended 31 December 2010.
InterOil is developing a vertically integrated energy business whose primary focus is Papua New Guinea and the surrounding region.
The company’s assets consist of petroleum licenses covering about 3.9 million acres, an oil refinery, and retail and commercial distribution facilities, all located in Papua New Guinea.
