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Liquid NIUGINI Gas Project Positioned for Success in Papua New Guinea

Liquid NIUGINI Gas Project Positioned for Success in Papua New Guinea. 15 th Annual Asia Upstream LNG conference Henry Aldorf President Pacific LNG Operations PTE.LTD April 21, 2010.

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Liquid NIUGINI Gas Project Positioned for Success in Papua New Guinea

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  1. Liquid NIUGINI Gas ProjectPositioned for Success in Papua New Guinea 15thAnnual Asia Upstream LNG conference Henry Aldorf President Pacific LNG Operations PTE.LTD April 21, 2010

  2. Pacific LNG 100% owned by Clarion Finanz AG.Pacific LNG owns : Strictly Private & Confidential • ~ 20% of Elk Antelope fields • 47.5% of Liquid Niugini Gas • Major Shareholder of InterOil

  3. Equatorial Guinea Alba Blue Printfor PNG Elk Antelope Acquired 2002 First Cargo 2007 Condensate >60,000 B/D Gross LPG >20,000 B/D Gross Methanol >20,000 BOE/D Gross LNG 75,000 BOE/D Gross Total >175,000 BOE/D Gross Maximizing value through the value chain

  4. EGLNG Train 1 : SIX Months Early and Under BudgetDelivery and Cost Performance Commit long lead equipment FID & signed EPC contract Feed gas introduction Agreements signed with EG Government All long lead equipment on site First LNG cargo Train 1 Capital Capital for Expansion Capacity Source: BG, Marathon internal estimates

  5. EGLNG & Liquid Niugini Gas share more than just the name Guinea • Liquids driving the LNG development - allows • early cash flow and increases Financing Options • Low marginal gas costs • Strong Alignment with the PNG Government • Favourable tax treatment • Strong Alignment among the Partners • Brown Field LNG Project • Off the Shelf Liquefaction Plants • Close to the premium Asian Markets • High BTU Gas • Similar Management Team Some Market Voices said “Right project wrong Company” They will be proven wrong again!

  6. Liquid Niugini Advantages vs. EGLNG • The Elk/Antelope Gas Condensate resource • is much larger : 8.2TCF vs. EGLNG ‘s. 5.5 TCF Gross gas resource with only 3TCF available for Train I • Upstream Tax and Royalty system • Onshore Development with highly productive • Wells resulting in the lowest regional gas cost • Highly prospective Exploration Acreage in a Proven Basin • Multi Train Development with Economies of Scale, not dependant on foreign resource • The Fiscal Stabilization Agreement with the PNG Government signed upfront – (LNG Project Agreement) • PNG is on the LNG Map with Exxon Project • PNG has a Credit Rating

  7. Project Agreement • On 23 December 2009, the PNG National Government signed the Project Agreement with Liquid Niugini Gas for the construction of an LNG Plant(s) in PNG • The agreement secures the fiscal terms for a 20 year period, which include a 30% company tax rate and certain exemptions applicable to large scale projects of this nature • The agreement also provides for a up to 20.5% ownership stake to be held by the Government of Papua New Guinea's nominee, Petromin PNG Holdings Limited • A further 2% ownership stake will be taken by landowners directly affected by the plant

  8. Disadvantages vs. EGLNG • Higher EPC Pricing for Equipment and Pipelines but : • Liquefaction pricing have come down recently from >$ 1000/ mt- $650 to $500/mt • Hydrocarbon prices especially liquids are much higher now • No Australian Labour constraints

  9. LNG Liquefaction vs Demand(Mid Case Scenario)Existing, under construction and possible liquefaction & regasification projects 70 MMTPA LNG needed LNG supply & demand gap occurs in 2017 (7 MMTPA) increasing to 70 MMTPA by 2020 Source:- Woodmac

  10. LNG Liquefaction vs DemandWoodmac Adjusted Scenario Source:- Woodmac, Marathon

  11. FOB Gas Price necessary to yield 12% Return (NPV12=0 ) • NPV (@ 12%) Breakeven – recovering capex and opex • Source: Wood Mackenzie, InterOil data

  12. InterOil Resources * * Additional 5.33 tcfe* ~ 9.12tcfe * * 31-12-2008 31-12-2009 *Resources are presented on a 2C basis ** 6 mmscf = 1 mboe 1GLJ certification prepared in accordance with the Canadian Oil & Gas Evaluation Handbook and Canadian Securities Administrators National Instrument 51-101.

  13. Elk/Antelope – Condensate and LNG Q2 -2010 Q3/Q4 -2011 Q3 -2010 Condensate 2012 Condensate Stripping Project 2015/2016 LNG First Land LNG (4 mtpa) – Train #1 N Condensate Stripping Plant Land Based LNG Elk/Antelope IOC Refinery Barge Condensate to Napa Napa 13

  14. Elk/Antelope – Full Development LNG First Q2 -2010 Q3/Q4 -2011 2012 Condensate Q3 -2010 Condensate Stripping Project Train 1 2015/2016 Train 2 2017 Train 3 2017/2018 Land LNG (4 mtpa) - Train 1/2/3 N Condensate Stripping Plant Land Based LNG Elk/Antelope & Condensate Stripping Plant IOC Refinery Barge Condensate to Napa Napa 14

  15. Elk/Antelope – Fixed Floating LNG – 3 MTPA FEED 1 Year Q3 -2010 2013/2014 Floating LNG 3 Years First LNG N Fixed Floating LNG 15

  16. The Pacific LNG Vision for the Elk Antelope fields Train I First Cargo 2015 Elk Antelope fields Train2 First Cargo 2016 Condensate 60,000 B/D gross Condensate splitter 100,000 B/D gross LNG 75,000 BOE/D gross Total >210 000 BOE/D gross LNLNG 75,000 BOE/D gross Maximizing value through the value chain An additional train every 9 months up to 4-5 trains

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