InterOil has completed well nr. 3 (13136D) and 4 (13114D) on the San Luis
discovery in Peru. Total production from the San Luis discovery as per today is
approximately 1'700 bopd. Two more wells will be drilled and completed during
the next four weeks.

As previously reported did well 13136D encounter gas in good quality reservoirs
in the upper section of the Salina Mogollon formation. Oil was encountered in
two thin reservoirs zones below the gas. Both sands have been tested separately.
One of the oil bearing intervals have now been placed in production through a
3/8" choke and produces today 150 bopd. InterOil will not perforate and produce
the gas bearing zones as the gas is seen as the main driving mechanisms for the
oil production. However, the good quality of these upper gas bearing reservoirs
will be one of the targets for the sixth and last well to be drilled on the San
Luis structure during this drilling campaign. The well will be positioned in a
structurally lower position and target the oil leg of the sands. The well will
spud within the next couple of days.

Well 13114D was drilled down flank of well 13136D to the West. The well
encountered oil in 3 zones and gas in an upper zone, similar to well 13136D. The
well confirms the presence of a gas cap in the upper reservoir zone. Testing of
the lower oil zone is now completed, and the well is now producing at a rate of
300 bopd through a 5/16" choke. Well 13114D encountered oil in the same good
quality zone as the first well drilled on San Luis, well 13103D, presently
producing some 870 bopd. This zone is a candidate for perforation and production
at a later stage together with the third oil zone.

The fifth well, 13169D, on the San Luis discovery commenced drilling two weeks
ago and reached total depth last week. The well has been logged, pressure tested
and sampled by MDT. Oil has been encountered in 4 different zones, including the
zone that encountered gas in the previous wells. The well also encountered oil
in a deeper zone not seen in any of the other wells. This zone will be tested
immediately, as this can be an important zone for future wells in an updip
position. The well will be prepared for dual completion in order to produce from
two intervals at the same time. The well provided us with very important
information about the different reservoirs and their lateral distribution. We
are also very pleased that we proved the presence of oil in the uppermost, good
quality reservoir sands. Pressure measurements and MDT sampling indicate an oil
column of some 300-400 ft below the gas in this zone.

InterOil has also initiated a study for a water injection project on the San
Luis discovery. All information gathered during the drilling campaign, and 3 D
seismic data, support the idea that San Luis is a good candidate for water
injection. Subject to the conclusion of the study, and with permits in place,
water injection will be initiated. Water injection will increase both the
production and the recovery factor of the field.

InterOil expects to complete the drilling of the sixth and final well during the
first week of January. First oil is expected during the second week of January.

The San Luis discovery has proven the presence of a structure consisting of
several oil bearing intervals, some of which consists of good quality
reservoirs. The discovery will be the most important contributor to the
increased production from Peru going forward. InterOil will monitor the San Luis
closely and spend the next 3-4 months to update reservoir models and prepare for
the next drilling campaign and water injection in 2011.
For more information please contact:

Fredrik von Zernichow
Investor Relation Manager
Tel: +47 6751 8661
Mob: +47 9927 3843
Fax: +47 6751 8660
E-mail:f.zernichow@interoil.no
www.interoil.no

***************************

InterOil Exploration & Production ASA is a Norwegian based exploration and
production company - listed on the Oslo Stock Exchange - with focus on Latin-
America. The company is operator of several production and exploration assets in
Peru, Colombia and Ghana. InterOil currently employs approximately 250 people
and is headquartered in Oslo.

This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)

[HUG#1475113]

Operational update Peru