QVT Applauds Court Decision Against InterOil

Is Concerned with Conditional Agreement between InterOil and West Face

OSLO, Norway, June 8, 2010 - In response to the recent Asker and Baerum court decision against
InterOil Exploration and Production ASA and in favor of Norsk Tillitsmann,
QVT Financial LP issued the following statement:

QVT Financial LP ("QVT") is extremely satisfied with the June 4, 2010,
decision of the Asker and Baerum district court against InterOil Exploration
and Production ASA ("InterOil") and in favor of Norsk Tillitsmann ("NT") as
bondholder trustee. This decision allows NT to enforce the security on the
USD 115 million bonds (ISIN NO0010363567) (the "Senior Secured Bonds") issued
by InterOil. Funds managed by QVT hold 50.6% of the outstanding Senior
Secured Bonds, and QVT intends to instruct NT to use all efforts to proceed
with the enforcement of its security.

InterOil has been in default under the loan agreement governing the
Senior Secured Bonds (and bondholders have been awaiting payment from
InterOil) since May of 2009. As InterOil has repeatedly sought to avoid
repaying creditors through vexatious legal argumentation, this decision is a
victory not only for InterOil bondholders, but for the Norwegian capital
markets generally. QVT believes that the increased certainty of contract and
collateral rights that this decision affirms will lead to greater liquidity
in Norwegian instruments and encourage further investment in Norway.

In addition to the above-mentioned Senior Secured Bonds, the QVT funds
are also holders of the unsecured NOK 100 million bond loan (ISIN
NO0010362809) and the unsecured USD 20 million bond loan (ISIN NO0010325350)
(the "Unsecured Bonds") issued by InterOil.

QVT notes with curiosity the June 7 announcement by InterOil that
InterOil, certain InterOil principals (the "InterOil Principals") and West
Face (Norway) AS ("West Face", an affiliate of the Canadian hedge fund
manager West Face Capital Inc.) have entered into a conditional agreement
(the "Conditional Agreement") pursuant to which West Face will launch a
tender offer for the shares of InterOil not held by the InterOil Principals
and contribute to the repayment of the Senior Secured Bonds (the "Offer").
While QVT is pleased that possible acquirers are showing interest in the
company and its assets, as a holder of Unsecured Bonds, QVT does not believe
that the Conditional Agreement is in the interest of any stakeholders of the
company (other than the parties to the Conditional Agreement) and therefore
is surprised that the InterOil board recommended that minority shareholders
accept the Conditional Agreement.

QVT is concerned that the Conditional Agreement will benefit the majority
shareholders of InterOil at the expense of the minority shareholders and
Unsecured Bondholders. QVT adamantly disagrees with the assertion in the June
7 announcement that "the opportunity that is offered by the West Face Offer
and New Bond Loan represents, today, the only available solution for
InterOil, its shareholders and creditors." According to QVT's calculations,
any sale of some or all of InterOil's assets for any amount exceeding
approximately USD 190 million would result in full repayment of all creditors
and a cash recovery to all shareholders in excess of the NOK 12.5 per share
offer price. QVT further notes that under the Conditional Agreement, certain
InterOil principals will receive immediate payment in respect of potential
future tax liabilities whereas Unsecured Bondholders will be forced to roll
their debt. Not only is this outcome less favorable for Unsecured Bondholders
than an immediate repayment, but it is also a direct contradiction of
InterOil's press release of March 4, 2010, in which it was promised that the
tax liabilities "shall be subordinated [to] the existing indebtedness of
InterOil, and that no amount shall be paid by InterOil under the settlement
agreement until all of InterOil's existing bond loans are repaid in full."

Furthermore, as the Secured Bonds have been in default for over a year,
QVT believes that it is important that the announcement of the Conditional
Agreement should not further delay the repayment of the Secured Bonds and
notes that InterOil has previously announced that it planned to have its debt
repaid in full by the end of April 2010 and that this did not take place. QVT
further notes that although InterOil stated in its announcement that it has
been "in continuous discussions with its main creditors concerning a
refinancing," InterOil has not engaged in constructive discussions with QVT,
whose funds hold the majority of the Senior Secured Bonds as well as
Unsecured Bonds, for many months. Consequently, QVT intends to proceed in
full haste with enforcement on the collateral of the Secured Bonds, intends
to vote against the exchange offers proposed to Unsecured Bondholders, and
expressly refuses to grant any waiver of its rights as a secured creditor
(including those upon which InterOil's June 7 announcement appears to
condition the Offer).

Shawn Pattison or Patrick Clifford, both of The Abernathy MacGregor Group, New York, for QVT Financial LP, +1-212-371-5999