InterOil Announces Departure of Chief Financial Officer

Market Wire, August, 2006

InterOil Corporation (TSX: IOL) (AMEX: IOC) (POMSoX:IOC), a Canadian company with operations in Papua New Guinea, announced that Mr. Tom S. Donovan has departed from InterOil effective from July 31, 2006. Mr. Donovan has served as InterOil's CFO since 2002. Mr. Donovan elected to relocate back to the U.S. upon the expiration of his employment contract on July 31, 2006. A search for a replacement for Mr Donovan is well underway. Phil Mulacek, InterOil's Chief Executive Officer, has assumed the duties of CFO while the company searches for a permanent replacement. The Board wish to state their sincere thanks to Mr. Donovan for his dedication and loyalty to the company and wish him every success going forward.

InterOil's common shares trade on the Toronto Stock Exchange under the symbol IOL in Canadian dollars and on the American Stock Exchange under the symbol IOC in US dollars.

Contacts: InterOil Corporation Anesti Dermedgoglou V.P., Investor Relations 61 7 4046 4600 Email: anesti@interoil.com Website: www.interoil.com