Palm Beach, FL 5/14/12 (StreetBeat) -- InterOil Corporation (NYSE: IOC) today announced receipt through an unofficial channel, from the Department of Petroleum and Energy (DPE), of a copy of a notice of intention to cancel the 2009 LNG Project Agreement between Liquid Niugini Gas Limited and the Independent State of Papua New Guinea. Having considered the issue carefully with our external advisers, we are strongly of the view that the State has no right at present to terminate the Project Agreement. The notice does activate a six month consultation period during which the parties are to explore steps to deal with or remedy the DPE's concerns.
Our sell down and partnering process has now reached a stage where we expect to be able to demonstrate to the DPE, in the coming weeks, our ability to abide by all of the terms of the 2009 LNG Project Agreement. This accords with our stated intention since the previously announced engagement of advisors for this process at the end of last year. InterOil, and the partner we select, intends to bring an LNG processing facility to Papua New Guinea of a nature and in a manner which will be satisfactory to the State.
InterOil Corporation is developing a vertically integrated energy business whose primary focus is Papua New Guinea and the surrounding region. InterOil'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. In addition, InterOil is a shareholder in a joint venture established to construct an LNG plant in Papua New Guinea.
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