##### 



Exhibit
1
 InterOil Corporation
Revised Annual Information FormFor the Year Ended December 31, 2006
October 29, 2007
    
    (INTEROIL LOGO)
 TABLE OF CONTENTS
 General
    
    
    1Non-Gaap Measures
    
    
    3Legal Notice  Forward-Looking Statements
    
    
    4Corporate Structure
    
    
    5General Development Of The Business
    
    
    8Business Strategy
    
    
    12Description Of Our Business
    
    
    15Exploration And Production
    
    
    15Liquefaction, Refining And Marketing
    
    
    20Wholesale And Retail Distribution
    
    
    24Community Relations, Safety And The Environment
    
    
    26Risk Factors
    
    
    28Dividends
    
    
    34Description Of Our Capital Structure
    
    
    35Market For Our Securities
    
    
    35Directors And Officers
    
    
    37Board Committees
    
    
    40Interests Of Management And Others In Material Transaction
    
    
    40Legal Proceedings
    
    
    41Material Contracts
    
    
    41Transfer Agent And Registrar
    
    
    44Additional Information
    
    
    47Glossary Of Terms
    
    
    48
 GENERAL
   Annual Information Form INTEROIL CORPORATION 1




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##### 



Annual Information Form INTEROIL CORPORATION 2




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##### 



NON-GAAP MEASURES
  Quarters ended
    

2006 (restated)(2), (3)
    
    

2005 (restated)(1), (2)($ thousands) (unaudited)
    
    Dec 31
    
    
    Sep 30
    
    
    Jun 30
    
    
    Mar 31
    
    
    Dec 31
    
    
    Sep 30
    
    
    Jun 30
    
    
    Mar 31Earnings before interest,
taxes, depreciation and
amortization
    
    
    6,873
    
    
    
    1,370
    
    
    
    (10,323
    )
    
    
    (12,014
    )
    
    
    (19,668
    )
    
    
    (8,192
    )
    
    
    (5,375
    )
    
    
    (4,346
    )Upstream
    
    
    (719
    )
    
    
    (1,107
    )
    
    
    (1,922
    )
    
    
    (5,136
    )
    
    
    (16,464
    )
    
    
    (13,333
    )
    
    
    (1,134
    )
    
    
    (91
    )Midstream  Refining and
Marketing
    
    
    9,144
    
    
    
    1,674
    
    
    
    (8,188
    )
    
    
    (5,230
    )
    
    
    (6,333
    )
    
    
    6,070
    
    
    
    (6,796
    )
    
    
    (3,405
    )Midstream  Liquefaction
    
    
    (396
    )
    
    
    (298
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Downstream
    
    
    1,143
    
    
    
    1,954
    
    
    
    3,559
    
    
    
    (326
    )
    
    
    3,963
    
    
    
    2,522
    
    
    
    2,550
    
    
    
    584Corporate & Consolidated
    
    
    (2,299
    )
    
    
    (853
    )
    
    
    (3,770
    )
    
    
    (1,322
    )
    
    
    (834
    )
    
    
    (3,451
    )
    
    
    5
    
    
    
    (1,434
    )Subtract:Interest expense
    
    
    5,649
    
    
    
    5,349
    
    
    
    3,609
    
    
    
    2,666
    
    
    
    2,989
    
    
    
    2,455
    
    
    
    2,996
    
    
    
    2,547Upstream
    
    
    2
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    (6
    )
    
    
    2
    
    
    
    2
    
    
    
    2Midstream  Refining
and Marketing
    
    
    2,479
    
    
    
    3,329
    
    
    
    2,731
    
    
    
    2,342
    
    
    
    2,756
    
    
    
    2,320
    
    
    
    2,735
    
    
    
    2,351Midstream  Liquefaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Downstream
    
    
    37
    
    
    
    38
    
    
    
    39
    
    
    
    38
    
    
    
    44
    
    
    
    42
    
    
    
    140
    
    
    
    Corporate & Consolidated
    
    
    3,131
    
    
    
    1,981
    
    
    
    838
    
    
    
    285
    
    
    
    195
    
    
    
    91
    
    
    
    119
    
    
    
    194Income taxes &
non-controlling interest
    
    
    1,049
    
    
    
    244
    
    
    
    1,031
    
    
    
    (245
    )
    
    
    910
    
    
    
    1,000
    
    
    
    301
    
    
    
    253Upstream
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Midstream  Refining
and Marketing
    
    
    42
    
    
    
    (46
    )
    
    
    (137
    )
    
    
    (118
    )
    
    
    (129
    )
    
    
    19
    
    
    
    (333
    )
    
    
    81Midstream  Liquefaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Downstream
    
    
    996
    
    
    
    416
    
    
    
    1,005
    
    
    
    (144
    )
    
    
    1,062
    
    
    
    965
    
    
    
    570
    
    
    
    159Corporate & Consolidated
    
    
    11
    
    
    
    (126
    )
    
    
    163
    
    
    
    17
    
    
    
    (23
    )
    
    
    16
    
    
    
    64
    
    
    
    13Depreciation & amortization
    
    
    3,554
    
    
    
    3,100
    
    
    
    2,862
    
    
    
    2,837
    
    
    
    2,700
    
    
    
    2,943
    
    
    
    2,699
    
    
    
    2,695Upstream
    
    
    233
    
    
    
    202
    
    
    
    173
    
    
    
    198
    
    
    
    96
    
    
    
    213
    
    
    
    2
    
    
    
    3Midstream  Refining
and Marketing
    
    
    2,805
    
    
    
    2,700
    
    
    
    2,626
    
    
    
    2,598
    
    
    
    2,662
    
    
    
    2,663
    
    
    
    2,641
    
    
    
    2,632Midstream  Liquefaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Downstream
    
    
    537
    
    
    
    222
    
    
    
    89
    
    
    
    62
    
    
    
    55
    
    
    
    55
    
    
    
    51
    
    
    
    43Corporate & Consolidated
    
    
    (21
    )
    
    
    (24
    )
    
    
    (26
    )
    
    
    (21
    )
    
    
    (113
    )
    
    
    12
    
    
    
    5
    
    
    
    17
 Annual Information Form INTEROIL CORPORATION 3




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##### 



Quarters ended
    

2006 (restated)(2), (3)
    
    

2005 (restated)(1), (2)($ thousands) (unaudited)
    
    Dec 31
    
    
    Sep 30
    
    
    Jun 30
    
    
    Mar 31
    
    
    Dec 31
    
    
    Sep 30
    
    
    Jun 30
    
    
    Mar 31Net income (loss) per
segment(1)
    
    
    (3,379
    )
    
    
    (7,323
    )
    
    
    (17,825
    )
    
    
    (17,272
    )
    
    
    (26,267
    )
    
    
    (14,590
    )
    
    
    (11,371
    )
    
    
    (9,841
    )Upstream
    
    
    (954
    )
    
    
    (1,310
    )
    
    
    (2,098
    )
    
    
    (5,335
    )
    
    
    (16,554
    )
    
    
    (13,548
    )
    
    
    (1,138
    )
    
    
    (96
    )Midstream  Refining
and Marketing
    
    
    3,818
    
    
    
    (4,309
    )
    
    
    (13,408
    )
    
    
    (10,052
    )
    
    
    (11,622
    )
    
    
    1,068
    
    
    
    (11,839
    )
    
    
    (8,469
    )Midstream  Liquefaction
    
    
    (396
    )
    
    
    (298
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Downstream
    
    
    (427
    )
    
    
    1,278
    
    
    
    2,426
    
    
    
    (282
    )
    
    
    2,802
    
    
    
    1,460
    
    
    
    1,789
    
    
    
    382Corporate & Consolidated
    
    
    (5,420
    )
    
    
    (2,684
    )
    
    
    (4,745
    )
    
    
    (1,603
    )
    
    
    (893
    )
    
    
    (3,570
    )
    
    
    (183
    )
    
    
    (1,658
    )
 (1)
    
    Our comparative quarterly results for all quarters during 2005 and 2006 have been represented
to confirm with the presentation adopted at December 31, 2006. Previously, interest revenue
and non-controlling interest were allocated to the corporate segment. Amounts associated with
these line items are now included in each operating segments result.(2)
    
    Our September 2006 quarterly results have been represented to separate out our
Midstream-Liquefaction segment from the Midstream Refining and Marketing segment.
 LEGAL NOTICE  FORWARD-LOOKING STATEMENTS
 This AIF contains forward-looking statements as defined in U.S. federal and Canadian securities
laws. Such statements are generally identifiable by the terminology used, such as may, plans,
believes, expects, anticipates, intends, estimates, forecasts, budgets, targets or
other similar wording suggesting future outcomes or statements regarding an outlook. All
statements, other than statements of historical fact, included in or incorporated by reference in
this AIF are forward-looking statements. Forward-looking statements include, without limitation,
statements regarding our plans for expanding our business segments, business strategy, contingent
liabilities, environmental matters, and plans and objectives for future operations, future capital
and other expenditures. By its very nature, such forward-looking information requires InterOil to
make assumptions that may not materialize or that may not be accurate.
 Each forward-looking statement reflects our current view of future events and is subject to known
and unknown risks, uncertainties and other factors that could cause our actual results to differ
materially from any results expressed or implied by our forward-looking statements. These risks
and uncertainties include, but are not limited to; the exploration and production, the refining and
the distribution businesses are competitive; our refinery has not operated at full capacity for an
extended period of time and our profitability may be materially affected if it is not able to do
so; if we are not able to market all of our refinerys output, we will not be able to operate our
refinery at its full capacity and our financial condition and results of operations may be
materially adversely affected; if our refining margins do not meet our expectations and our
refinery operations are not profitable; we may be required to write down the value of our refinery;
our refinery financial condition may be materially adversely affected if we are unable to obtain
crude feedstocks for our refinery; our refining operations expose us to risks, some of which are
not insured; our hedging activities may incur losses; we may not be successful in our exploration
for oil and gas; if we are unable to renew our petroleum licenses with the Papua New Guinea
government, we may be required to discontinue our exploration activities in Papua New Guinea; our
investments in Papua New Guinea are subject to political, legal and economic risks that could
materially adversely affect their value; new legislative, administrative or judicial actions that
constrain licenses and permits from various government authorities may have a material affect on
the companys operations; weather and unforeseen operating hazards may impact our operating
activities; our significant debt levels and our debt covenants may limit our future flexibility in
obtaining additional financing; our ability to recruit and retain qualified personnel may have a
material adverse effect on our operating results and stock price; Petroleum Independent and
Exploration Corporation can affect our raising of capital through the issuance of common shares or
securities convertible into common shares; compliance with and changes in environmental laws could
adversely affect our performance; you may be unable to enforce your legal rights against us;
changing regulations regarding corporate governance and public disclosure could cause additional
expenses and failure to comply may adversely affect our reputation and the value of our securities;
and the risks described under the heading Risk Factors in our Annual Information Form.
 Annual Information Form INTEROIL CORPORATION 4




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##### 



Although we believe that the assumptions underlying our forward-looking statements are reasonable,
any of the assumptions could be inaccurate, and, therefore, we cannot assure you that the
forward-looking statements included in this AIF will prove to be accurate. In light of the
significant uncertainties inherent in our forward-looking statements, the inclusion of such
information should not be regarded as a representation by us or any other person that our
objectives and plans will be achieved. Some of these and other risks and uncertainties that could
cause actual results to differ materially from such forward-looking statements are more fully
described under the heading Risk Factors.
 Readers are cautioned that the foregoing list of important factors affecting forward-looking
information is not exhaustive. Furthermore, the forward-looking information contained in this
quarterly report is made as of the date of this report and, except as required by applicable law,
InterOil does not undertake any obligation to update publicly or to revise any of the included
forward-looking information, whether as a result of new information, future events or otherwise.
The forward-looking information contained in this report is expressly qualified by this cautionary
statement.
 We currently have no production or reserves as defined in Canadian National Instrument 51-101
Standards of Disclosure for Oil and Gas Activities. All information contained in this AIF
regarding resources are references to undiscovered resources under Canadian National Instrument
51-101, whether stated or not.
 CORPORATE STRUCTURE
 Business Corporations Act
 Our registered office
    
    Our corporate officein Canada is located at:
    
    in Australia is located at:Brunswick House
    
    Level 1, 60-92 Cook Street10th Floor, 44 Chipman Hill
    
    Portsmith, QLD 4870,Saint John, NB E2L 4S6
    
    Australia
  Segments
    
    Objective
    
    Entity ShadingUpstream
    
    Exploration and ProductionMidstream
    
    Liquefaction, Refining and MarketingDownstream
    
    Wholesale and Retail DistributionCorporate
    
    Corporate and Consolidations
  Annual Information Form INTEROIL CORPORATION 5




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Upstream  Exploration and Production
  Midstream  Liquefaction, Refining and Marketing
  Annual Information Form INTEROIL CORPORATION 6




---



##### 



Downstream  Wholesale and Retail Distribution
   Annual Information Form INTEROIL CORPORATION 7




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##### 



GENERAL DEVELOPMENT OF THE BUSINESS
 Three Year History
  2006
  Upstream
   Midstream
   
 Annual Information Form INTEROIL CORPORATION 8




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##### 



Downstream
   Financing
  ü
    
    In May 2006, InterOil entered into a secured credit agreement for $130.0 million. The loan is
divided into two tranches. Tranche 1, which represents $100.0 million of the facility, was
available for drawdown from the time the agreement was signed. Tranche 2 drawdown was dependent
upon milestones being reached with relation to the prospective building of a liquefied natural
gas processing facility in Papua New Guinea. The full balance of the loan is repayable in May
2008. The interest rate payable on the loan is 4% from May 2006 and ending in March 2007.
Between March 2007 and the end of the facility, the interest rate will be 10% unless a
definitive Project Agreement is executed by InterOil and the lenders on or before March 2007.
If the Project Agreement is delivered on or before March 2007, the interest rate will continue
to be 4% for the full life of the loan. The loan was fully drawn down as at December 31, 2006.ü
    
    In May 2006, we repaid $25.0 million in unsecured borrowings (see January 2005 financing
transactions under our, unsecured term loan facility, below).ü
    
    In May 2006, we entered into an agreement to amend the terms of the original PNG Drilling
Ventures Limited, Agreement, whereby, PNG Drilling Ventures Limited converted their interest
under the agreement into 575,575 InterOil common shares and also retained a 6.75% interest in
the next four wells (the first of which is Elk-1) to be drilled by InterOil. PNG Drilling
Ventures also has the right to participate in the 16 wells that follow the first four mentioned
above up to an interest of 5.75% by contributing their share of costs.ü
    
    In August 2006, the credit limit under the BNP facility entered into in 2004 was increased to
$170.0 million. The credit limit is comprised of a $130.0 million facility to provide letters
of credit and short term loans to finance the purchase of crude cargoes and bank guarantees to
facilitate hedging and a $40.0 million facility that allows us to discount eligible U.S. dollar
receivables and fully cash back loans under the first facility.ü
    
    In December 2006, we renegotiated the terms of the OPIC secured loan where the half yearly
principle payment due in December 2006 and June 2007 of $4.5 million each, have been deferred
until December 31, 2007 and interest previously due on December 31, 2006 and June 30, 2007 were
deferred until September 30, 2007. The normal repayment of interest and principal will
recommence on September 30, 2007 and December 31, 2007, respectively.
 Management Team
  ü
    
    Effective July 1, 2006, Dr Jack Hamilton was appointed as President of InterOil.ü
    
    On August 3, 2006, InterOil announced that Tom S. Donovan, Chief Financial Officer of InterOil
had completed his employment agreement on July 31, 2006.
 Annual Information Form INTEROIL CORPORATION 9




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##### 



ü
    
    On August 30, 2006, InterOil announced that William J. Jasper III was appointed as President and
Chief Operating Officer of InterOil. At this time, it was agreed that Christian Vinson, the
former Chief Operating Officer, would focus on corporate development and government relations in
Papua New Guinea and Dr. Jack Hamilton, the former President, was nominated by InterOil to serve
as Chief Executive Officer of the recently formed PNG LNG Inc., which is the vehicle used to
develop the proposed LNG facility adjacent to the InterOil refinery in Papua New Guinea.ü
    
    On October 1, 2006, Dr. Michael Folie retired as a director of InterOil for personal reasons.ü
    
    On October 26, 2006, Collin F Visaggio was appointed as Chief Financial Officer of InterOil.ü
    
    On December 29, 2006, Don R. Hansen was appointed as an independent director of InterOil and
also agreed to serve as a member of the Audit and Compensation Committees of InterOils board of
directors.
 2005
 Upstream
  Midstream
  
 Financing
  ü
    
    In January 2005, we entered into a $20.0 million unsecured term
loan facility. The interest rate on this loan is 5%. In July
2005, we increased the availability under this loan facility to
$25.0 million. Borrowings under this facility are due 15 months
after all funds are disbursed. As of December 31, 2005, $3.5
million remained available for future borrowings under this
facility. (See May, 2006 for information regarding repayment of
this loan)
 Annual Information Form INTEROIL CORPORATION 10




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##### 



ü
    
    In February 2005, we entered into an amended and restated indirect
participation agreement with institutional accredited investors in
which the investors paid us a total of $125.0 million and we
agreed to drill eight exploration wells in Papua New Guinea. See
Indirect Participation Interest Agreements.ü
    
    In August 2005, the secured revolving crude import facility with
BNP Paribus initially entered into in March 2004, was increased to
$150.0 million. At December 31, 2005, $44.0 million remained
available for use.ü
    
    As of December 31, 2005, PNG Drilling Ventures Limited had
converted $2.5 million of their investment into 141,545 of our
common shares pursuant to an indirect participation interest
agreement. See Indirect Participation Interest Agreement.
 2004
 Upstream
  Midstream
  Downstream
  
 Financing
  ü
    
    In March 2004, we received an additional $3.2 million from PNG Drilling Ventures Limited for our second indirect
interest participation agreement program. This, together with funds received in 2003, made the total contribution
under the drilling participation agreement with PNG Drilling Ventures $12.2 million.
 Annual Information Form INTEROIL CORPORATION 11




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##### 



ü
    
    In May 2004, PNG Energy Investors converted their $7.7 million indirect participation interest into 683,140 common
shares of InterOil.ü
    
    In July 2004, our common shares commenced trading on the Toronto Stock Exchange.ü
    
    In September 2004, our common shares commenced trading on the American Stock Exchange.ü
    
    In the third quarter of 2004, we issued $45.0 million in 8.875% senior convertible debentures due 2009 that were
subsequently converted into 2.4 million common shares. We also issued warrants to acquire 359,415 common shares at a
price of $21.91. The warrants have a five year term. As of December 31, 2006, warrants to purchase 340,247 common
shares remained outstanding.
 BUSINESS STRATEGY
  Capitalize On and Expand the Existing Business Assets
    Annual Information Form INTEROIL CORPORATION 12




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##### 



Target Acquisitions and Growth Opportunities in Papua New Guinea and the Surrounding Area
    Position InterOil for Long-Term Oil and Gas Business Success
    Annual Information Form INTEROIL CORPORATION 13




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##### 



Summary of Strategic Priorities
  StrategicPriorities
    
    2006 Progress
    
    2007 InitiativesCapitalize on and
Expand on the
Existing Business
Assets
    
    ü   Completed
refinery optimization
project, which
included the
installation of new
generators powered by
low sulfur waxy
residue and
modifications of the
furnaces and boilers
to improve
reliability and
reduce fuel costs.ü   Secured a
contract to provide
InterOil Power Fuel
to Papua New Guineas
Moitaka Power
Station.
    
    ü   Evaluate
feasibility of
improvements,
modifications and
additional equipment
to improve
flexibility and
profitability of the
refinery.ü   Continue to
seek out potential
markets for InterOil
Power Fuel and
distillate export
opportunities to
increase contribution
to fixed costs.ü   Cost
reduction program
targeting 10%
reduction.Target Acquisitions
and Growth
Opportunities in
Papua New Guinea and
the Surrounding Area
    
    ü   Finalized the
terms of acquisition
for Shell Papua New
Guineas distribution
network. The Shell
Papua New Guinea
business was
transferred to
InterOil on October
1.ü   Examined
other potential
downstream growth
opportunities.ü   Progressed
discussions for
liquefied natural gas
opportunity in Papua
New Guinea with
government and other
potential partners.
    
    ü   Pursue
opportunities to
purchase a business
or assets in the
business of
distributing fuel to
the aviation sector.

ü   Pursue other
potential downstream
growth opportunities.ü   Sign a
project agreement
relating to the LNG
opportunity in Papua
New Guinea and begin
taking steps to
advance project.ü   Finalize
investment decision
and development plans
for LNG project.Position InterOil for
Long-Term Oil and Gas
Business Success
    
    ü   Made
potential gas and
condensate discovery
at Elk location on
existing Petroleum
Prospecting License
238. ü   Conducted
seismic and airborne
gravity and magnetic
surveys on licenses
to expand knowledge
base of existing
prospects and to
identify new
prospects.
    
    ü   Obtain
further information
about the Elk
structure by drilling
the Elk-2 appraisal
well and conducting
100 miles of
appraisal seismic.ü   Conduct
detailed 2D seismic
surveys over the Elk
discovery and lead
on-trend with the Elk
discovery that have
been identified from
seismic data and
airborne
gravity/magnetic
surveys acquired by
the company to date.
 Annual Information Form INTEROIL CORPORATION 14




---



##### 



DESCRIPTION OF OUR BUSINESS
 Overview
  Segments
    
    OperationsUpstream
    
    Exploration and Production  Explores and appraises potential
oil and gas bearing structures in Papua New Guinea with a view
to commercializing discoveries.Midstream
    
    Liquefaction, Refining and Marketing  Markets the refined
products it produces in Papua New Guinea both domestically and
for export. Since early 2006, our business plan and operating
strategy has evolved to include as a business objective, the
development of an onshore liquefied natural gas processing
facility in Papua New Guinea.Downstream
    
    Wholesale and Retail Distribution  Distributes refined
products in Papua New Guinea on a wholesale and retail basis.Corporate
    
    Corporate and Consolidations  Engages in business development
and improvement, common services and management, financing and
treasury, government and investor relations. Common and
integrated costs are recovered from business segments on an
equitable driver basis. Our corporate segment results also
include consolidation adjustments.
  EXPLORATION AND PRODUCTION
   Petroleum License Details
   Annual Information Form INTEROIL CORPORATION 15




---



##### 



Petroleum Prospecting License 236
  Petroleum Prospecting License 237
  Petroleum Prospecting License 238
  Petroleum Prospecting License 244
  Annual Information Form INTEROIL CORPORATION 16




---



##### 



Petroleum Retention License 4
  Petroleum Retention License 5
  2006 Exploration Activities
    Annual Information Form INTEROIL CORPORATION 17




---



##### 



Oil and Gas Wells
  Working Interest in Non Producing Gas Wells
 Location
    
    Gross
    
    NetPapua New Guinea
    
    
    5
    
    
    
    3
 Properties with No Attributed Reserves
  Undeveloped Acres
 Location
    
    Gross
    
    NetPapua New Guinea
    
    
    8,981,232
    
    
    
    8,223,614Total
    
    
    8,981,232
    
    
    
    8,223,614
 Abandonment and Reclamation
  Costs Incurred
  Expenditure
    
    Amount ($ millions)Property Acquisition Costs
    
    
    0.3Proved Properties
    
    
    Undeveloped Properties
    
    
    0.3Exploration Costs
    
    
    48.0Development Costs
    
    
    Total Expenditure
    
    
    48.3
 Tax Horizon
  Exploration and Development Activities
  Annual Information Form INTEROIL CORPORATION 18




---



##### 



Undeveloped Wells
 Type
    
    Gross
    
    NetOil
    
    
    
    
    
    
    Gas
    
    
    1
    
    
    
    0.68Service
    
    
    
    
    
    
    Dry
    
    
    
    
    
    
    Total
    
    
    1
    
    
    
    0.68
 Indirect Participation Agreements
    Strategic Priorities
  StrategicPriorities
    
    2006 Progress
    
    2007 InitiativesTarget Acquisitions and Growth Opportunities in Papua New Guinea and the Surrounding Area
    

ü   Acquired additional interest in PRL 4 and PRL 5 during the year.
    
    ü    Evaluate productive potential of the Stanley gas discovery in PRL 4ü   Drill Elevala-2 appraisal well in PRL 5ü   Complete evaluation of prospectivity of PPL 244.ü   Participate in the Papua New Guinea offshore bid round
 Annual Information Form INTEROIL CORPORATION 19




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##### 



StrategicPriorities
    
    2006 Progress
    
    2007 InitiativesPosition InterOil for Long-Term Oil and Gas Business Success
    
    ü   Natural gas and
condensate discovery at Elk location on existing PPL 238.ü   Conducted seismic and airborne gravity and
magnetic surveys on licenses to expand knowledge base of existing leads and prospects and to identify new leads and prospects.ü   Modified InterOils Rig 2 to enable drilling into similar reservoir conditions encountered in Elk-1.


    
    ü   Further
define the Elk structure and reservoir by drilling the Elk-2 appraisal well and conducting 100 miles of appraisal seismic.ü   Conduct detailed 2D seismic surveys over the Elk discovery and Big Horn structure on-trend with the Elk discovery.ü   Drill Antelope-1 new structure south of Elk.ü   Prove up sufficient gas
reserves to support the construction of a pipeline and
 liquefaction plant in
Papua New Guinea.
 LIQUEFACTION, REFINING AND MARKETING
 Refining and Marketing
  Refinery Optimization
    Annual Information Form INTEROIL CORPORATION 20




---



##### 



Facilities and Major Subcontractors
    Crude Supply and Throughput
   Marketing
  Annual Information Form INTEROIL CORPORATION 21




---



##### 



Competition
   Trading and Risk Management
   Annual Information Form INTEROIL CORPORATION 22




---



##### 



Liquefaction
  Strategic Priorities
  StrategicPriorities
    
    2006 Progress
    
    2007 GoalsCapitalize and Expand
on the Existing
Business Assets
    
    ü   Completed
refinery optimization
project to improve
product slate,
improve reliability
and reduce fuel
costs.ü   Completed
InterOil Power Fuel
project at Moitaka
Power Station. The
downstream business
won a tender to
provide IPF to
Moitaka supplied out
of the refinery.ü   Continued
with crude
optimization
initiatives.
    
    ü   Evaluate
feasibility of
improvements,
modifications and
additional equipment
to improve
flexibility and
profitability of the
refineryü   Continue to
seek out potential
markets for InterOil
Power Fuelü   Seek
profitable distillate
export opportunities
to increase
contribution to fixed
costsü   Cost
reduction program
targeting 10%
reduction.Target Acquisitions
and Growth
Opportunities in
Papua New Guinea
    
    ü   Commenced
consultation with key
stakeholders to
discuss ways to
stimulate local
demand from the
refineryü   Progressed
discussions for LNG
opportunity in Papua
New Guinea with
government and other
potential partners.
    
    ü   Achieve
growth in local
demand for products
from the refineryü   Sign
shareholder agreement
and project agreement
relating to the
proposed LNG plant.ü   Complete
basis of design and
commence front end
engineering design.
 Annual Information Form INTEROIL CORPORATION 23




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##### 



StrategicPriorities
    
    2006 Progress
    
    2007 GoalsPosition InterOil for
Long-Term Oil and Gas
Business Success
    
    ü   Improved
refinery
profitability to
almost a breakeven
position in second
half of 2006.
    
    ü   Maintain the
positive momentum
achieved in third and
fourth quarter 2006
and achieve a
profitable outcome
for 2007
 WHOLESALE AND RETAIL DISTRIBUTION
  Supply of Products
    Retail Distribution
  Annual Information Form INTEROIL CORPORATION 24




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##### 



Wholesale Distribution
  Competition
  Customers
  Strategic Priorities
  StrategicPriorities
    
    2006 Progress
    
    2007 GoalsCapitalize and Expand
on the Existing
Business Assets
    
    ü   Secured a
contract to provide
IPF to Papua New
Guineas Moitaka
Power Station.ü   Completed the
construction of a 2
million liter diesel
storage tank at our
terminal in the
province of East
Sepik, to augment
storage availability
at that location.
    
    ü   Further
integrate Shell
distribution assets
into the existing
InterOil business to
capitalize on cost
efficiencies and
operational
synergies.ü   Continue to
seek out potential
markets for InterOil
Power Fuel.ü   To carry out
full retail network
plan and rationalize
or expand the retail
network as a resultTarget Acquisitions
and Growth
Opportunities in
Papua New Guinea
    
    ü   Finalized the
terms of acquisition
for Shell Papua New
Guineas distribution
network. The Shell
Papua New Guinea
business was
transferred to
InterOil on October
1.ü   Examined
other potential
downstream growth
opportunities.
    
    ü   Pursue
acquisition
opportunities in the
aviation distribution
business.ü   Pursue other
potential downstream
growth opportunities.ü   To target new
mining ventures
currently in the
start up phase in
Papua New Guinea.ü   To complete a
5-year strategic plan
to identify future
growth within the
surrounding region.
 Annual Information Form INTEROIL CORPORATION 25




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##### 



COMMUNITY RELATIONS, SAFETY AND THE ENVIRONMENT
  Environment
  ü
    
    Emissions of substances into, and pollution and contamination of, the atmosphere, waters
and land;ü
    
    Production, use, handling, storage, transportation and disposal of waste, hazardous
substances and dangerous goods;ü
    
    Conservation of natural resources;ü
    
    The protection of threatened and endangered flora and fauna; andü
    
    The health and safety of people.
     Annual Information Form INTEROIL CORPORATION 26




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##### 



Community Relations
  ü
    
    Managing the expectations and demands of benefit streams perceived as a result of the
establishment of the refinery;ü
    
    Managing expectations of community assistance programs to community institutions, and;ü
    
    To manage land acquisition related compensation claims, demands and payments;
      ü
    
    Comply with all applicable laws, regulations and standards and where laws do not exist
adopt and apply standards that reflect the companys commitment to socially and
environmentally responsible behaviors.ü
    
    Maintain close liaison with the Department of Petroleum and Energy and all relevant
Government departments to ensure that InterOil complies with all government legislation and
regulations relevant to its activities in Papua New Guinea.ü
    
    Providing a safe and healthy working environment for all employees and contractors, and
establishing emergency response procedures that allow personnel to respond promptly and
effectively.ü
    
    Establishing community development assistance programs to enhance and improve the
standard of health and education.ü
    
    Pursuing socially responsible community relations initiatives that reflect the
communitys needs, enhance our reputation and recognize the importance of the culture,
heritage and traditional rights of the communities in which we operate.ü
    
    Understanding the traditional and contemporary culture, beliefs and social dynamics of
locals in all project areas with particular reference to land matters, in order to better
manage socio-economic changes in oil and gas exploration and in our refinery operations in
Papua New Guinea.ü
    
    Ensuring community affairs issues are a major focus in the planning, management and
delivery of our activities, while ensuring that our health, safety and environment
operating procedures are adhered to in every task performed;
 Annual Information Form     INTEROIL CORPORATION     27




---



##### 



ü
    
    Communicating with employees, contractors, partners, government and the local project
impacted communities in a transparent, open and proactive manner;ü
    
    Providing cultural awareness information and training to our employees and contractors
at all levels;ü
    
    Ensuring compliance with all applicable industrial relations legislation and procedures
in all employment arrangements with our contractors and sub-contractors; andü
    
    Providing business development advice and support to appropriate, representative and
sustainable community owned enterprises where they have the capability to provide cost
effective and competent services.
 RISK FACTORS
  The exploration and production, the refining and the distribution businesses are competitive.
   ü
    
    Our access to the capital necessary to drill wells and acquire properties;ü
    
    Our ability to acquire and analyze seismic, geological and other information relating to a property;
 ü
    
    Our ability to retain the personnel necessary to properly evaluate seismic and other
information relating to a property;ü
    
    The development of, and our ability to access, transportation systems to bring future
production to the market, and the costs of such transportation systems;ü
    
    The standards we establish for the minimum projected return on an investment of our capital; andü
    
    The availability of alternate fuel sources.
   Annual Information Form     INTEROIL CORPORATION     28




---



##### 



Our refinery has not operated at full capacity for an extended period of time and our profitability
may be materially negatively affected if it is not able to do so.
  If we are not able to market all of our refinerys output, we will not be able to operate our
refinery at its full capacity and our financial condition and results of operations may be
materially adversely affected.
    If our refining margins do not meet our expectations, we may be required to write down the value of
our refinery.
  Annual Information Form     INTEROIL CORPORATION     29




---



##### 



ü
    
    Our revenues, cash flows and earnings;ü
    
    Our ability to attract capital to finance our operations, and the cost of such capital;ü
    
    The value of our oil properties;ü
    
    The profit or loss we incur in refining petroleum products; andü
    
    The profit or loss we incur in exploring for and developing reserves.
 Our refinerys financial condition may be materially adversely affected if we are unable to obtain
crude feedstocks for our refinery.
   Our refining operations expose us to risks, not all of which are insured.
  Our hedging activities may result in losses.
  Annual Information Form     INTEROIL CORPORATION     30




---



##### 



ü
    
    If the amount of refined products produced is less than expected or is not produced or sold during the planned time
period;ü
    
    If the other party to the hedging contract defaults on its contract obligations; orü
    
    If there is a change in the expected differential between the underlying price in the hedging agreement and actual
prices received.
  We may not be successful in our exploration for oil and gas.
    If we are unable to renew our petroleum licenses with the Papua New Guinea government, we may be
required to discontinue our exploration activities in Papua New Guinea.
   Annual Information Form     INTEROIL CORPORATION     31




---



##### 



Our investments in Papua New Guinea are subject to political, legal and economic risks that could
materially adversely affect their value.
    New legislative, administrative or judicial actions that constrain licenses and permits from
various government authorities may have a material adverse affect on the companies operations.
  Weather and unforeseen operating hazards may adversely impact our operating activities.
  Annual Information Form     INTEROIL CORPORATION     32




---



##### 



Our significant debt levels and our debt covenants may limit our future flexibility in obtaining
additional financing.
  ü
    
    A portion of our cash flow will be used to pay interest and principal on our debt and will not be available for other
purposes;ü
    
    Our OPIC loan agreement, secured loan agreement and BNP credit facility contain financial tests which we must satisfy
in order to avoid a default under such credit facilities; andü
    
    Our ability to obtain additional financing for capital expenditures and other purposes may be limited.
  Our ability to recruit and retain qualified personnel may have a material adverse effect on our
operating results and stock price.
  Petroleum Independent and Exploration Corporation can affect our raising of capital through the
issuance of common shares or securities convertible into common shares.
  Compliance with and changes in environmental laws could adversely affect our performance.
  Annual Information Form     INTEROIL CORPORATION     33




---



##### 



You may be unable to enforce your legal rights against us.
  Changing regulations regarding corporate governance and public disclosure could cause additional
expenses and failure to comply may adversely affect our reputation and the value of our securities.
    DIVIDENDS
  Annual Information Form     INTEROIL CORPORATION     34




---



##### 



DESCRIPTION OF OUR CAPITAL STRUCTURE
   Business Corporations Act
 MARKET FOR OUR SECURITIES
  Toronto Stock Exchange (TSX:IOL) in Canadian Dollars
 Month
    
    High
    
    Low
    
    VolumeJanuary
    
    $
    31.30
    
    
    $
    18.75
    
    
    
    771,500February
    
    $
    20.53
    
    
    $
    18.30
    
    
    
    481,100March
    
    $
    19.83
    
    
    $
    14.70
    
    
    
    504,500April
    
    $
    17.97
    
    
    $
    15.10
    
    
    
    261,000May
    
    $
    18.95
    
    
    $
    13.55
    
    
    
    371,500June
    
    $
    22.95
    
    
    $
    14.37
    
    
    
    316,800July
    
    $
    22.75
    
    
    $
    19.31
    
    
    
    109,700August
    
    $
    21.99
    
    
    $
    13.32
    
    
    
    339,900September
    
    $
    21.76
    
    
    $
    16.22
    
    
    
    187,400October
    
    $
    21.75
    
    
    $
    17.30
    
    
    
    459,800November
    
    $
    34.99
    
    
    $
    20.56
    
    
    
    1,430,400December
    
    $
    35.41
    
    
    $
    29.44
    
    
    
    441,900Total
    
    
    
    
    
    
    
    
    
    
    5,675,500
 Annual Information Form     INTEROIL CORPORATION     35




---



##### 



American Stock Exchange (AMEX:IOC) in United States Dollars
 Month
    
    High
    
    Low
    
    VolumeJanuary
    
    $
    26.41
    
    
    $
    16.00
    
    
    
    7,592,100February
    
    $
    18.75
    
    
    $
    15.80
    
    
    
    3,655,900March
    
    $
    17.50
    
    
    $
    12.64
    
    
    
    6,285,700April
    
    $
    15.82
    
    
    $
    13.05
    
    
    
    3,348,200May
    
    $
    17.26
    
    
    $
    12.75
    
    
    
    5,848,000June
    
    $
    20.54
    
    
    $
    12.96
    
    
    
    6,014,200July
    
    $
    20.14
    
    
    $
    16.70
    
    
    
    3,976,600August
    
    $
    19.46
    
    
    $
    12.14
    
    
    
    7,848,000September
    
    $
    19.50
    
    
    $
    14.50
    
    
    
    5,553,700October
    
    $
    19.59
    
    
    $
    15.20
    
    
    
    1,000,500November
    
    $
    30.80
    
    
    $
    18.05
    
    
    
    21,506,200December
    
    $
    30.50
    
    
    $
    26.12
    
    
    
    10,009,700Total
    
    
    
    
    
    
    
    
    
    
    92,638,800
 Prior Sales
     Annual Information Form     INTEROIL CORPORATION     36




---



##### 



DIRECTORS AND OFFICERS
  Directors and Officers
 Name
    
    Address
    
    Position
    
    Date of AppointmentPhil E. Mulacek
    
    The Woodlands, TX, USA
    
    Chairman, CEO, &
Director
    
    May 29, 1997Christian M. Vinson
    
    The Woodlands, TX,USA
    
    Vice President of
Corporate Development
and Government
Affairs, & Director
    
    May 29, 1997Gaylen J. Byker
    
    Grand Rapids, MI, USA
    
    Director(1)
    
    May 29, 1997Roger N. Grundy
    
    Matlock Derbyshire, UK
    
    Director
    
    May 29, 1997Donald R. Hansen
    
    Calgary, AB, Canada
    
    Director(2)
    
    December 29, 2006Edward N. Speal
    
    Toronto, ON, Canada
    
    Director(3)
    
    June 25, 2003Anesti Dermedgoglou
    
    Cairns, QLD, Australia
    
    Vice President of
Investor Relations
    
    June 3, 2002Peter Diezmann
    
    Lae, Papua New Guinea
    
    General Manager 
Wholesale and Retail
Distribution
    
    March 1, 2005Gerry Gilbert
    
    Cairns, QLD, Australia
    
    General Manager 
Exploration and
Production
    
    July 1, 2005William J. Jasper III
    
    Cairns, QLD, Australia
    
    President and Chief
Operating Officer
    
    August 30, 2006Anthony Poon
    
    Sydney, NSW, Australia
    
    General Manager 
Supply and Trading
    
    October 1, 2005Collin F Visaggio
    
    Perth, WA, Australia
    
    Chief Financial Officer
    
    October 26, 2006
 
 (1)
    
    Gaylen Byker acted as Chairman of the Audit Committee, the Nominating and Corporate
Governance Committee and Compensation Committee.(2)
    
    Donald Hansen acted as a member of the Audit Committee, Compensation Committee and Nominating
and Corporate Governance Committee from the date of his appointment, December 29, 2006.(3)
    
    Edward Speal acted as a member of the Audit Committee, Compensation Committee and Nominating
and Corporate Governance Committee   Annual Information Form     INTEROIL CORPORATION     37




---



##### 



Phil E. Mulacek
 Christian M. Vinson
 Gaylen J. Byker
 Roger N. Grundy
 Donald R. Hansen
  Annual Information Form     INTEROIL CORPORATION     38




---



##### 



Edward N. Speal
 Anesti Dermedgoglou
 Peter Diezmann
 Gerry Gilbert
 William J Jasper III
 Annual Information Form     INTEROIL CORPORATION     39




---



##### 



Anthony Poon
 Collin F Visaggio
   BOARD COMMITTEES
  INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTION
  ü
    
    Mr. Mulacek controls P.I.E. Group LLC and entities controlled by
Mr. Byker, also have an ownership interest in P.I.E. Group LLC.
P.I.E. Group LLC. owns 0.01% interest of S.P.I. Exploration and
Production Corporation. S.P.I. Exploration and Production
Corporation is a holding company that owns InterOils upstream
operating subsidiaries that hold exploration licenses and conduct
exploration activities in Papua New Guinea.ü
    
    Petroleum Independent and Exploration Corporation (P.I.E.) has a
0.02% interest of S.P. InterOil, LDC, which is a holding company
of InterOil that owns InterOils midstream operating subsidiaries
that own and operate InterOils refinery in Papua New Guinea. Mr.
Mulacek is the President of, and has an ownership interest in,
P.I.E. P.I.E. was paid a management fee of $150,000, $150,000,
and $150,410 during 2006, 2005 and 2004, respectively. This
management fee relates to Petroleum Independent and Exploration
Company being appointed the General Manager of our subsidiary,
S.P. InterOil, LDC.
 Annual Information Form     INTEROIL CORPORATION     40




---



##### 



ü
    
    P.I.E. has a 0.01% interest of S.P.I. Distribution Limited, which
is a holding company of InterOil that owns InterOils wholesale
and retail distribution operations.ü
    
    We had no loans with P.I.E. in 2006. In 2005 and 2004, we made
interest payments of $9,376, and $246,745, and loan principal
payments of $1.1 million and $2.2 million to P.I.E. As of
December 31, 2005, we had repaid all amounts that we owed to
P.I.E. The loans outstanding to P.I.E. were for amounts loaned by
lending institutions to P.I.E. These loans were collateralized by
barges legally owned by P.I.E. but beneficially owned by us and
common shares of ours owned by P.I.E. The interest rates charged
to us by P.I.E. reflected the actual interest rates paid by P.I.E.
to the lending institutions.
  LEGAL PROCEEDINGS
   MATERIAL CONTRACTS
  Date
    
    DescriptionMay 4, 2006
    
    Credit Agreement between InterOil Corporation and
Merrill Lynch ,Pierce, Fenner & Smith Incorporated and
Clarion Finanz AGMay 4, 2006
    
    Memorandum of Understanding between InterOil
Corporation, Merrill Lynch and Clarion Finanz AGJanuary 4, 2006
    
    Purchase and Sale Agreement between InterOil Products
Limited and Shell Overseas Holdings LimitedDecember 27, 2005
    
    Code of Ethics and Business ConductAugust 12, 2005
    
    $150 Million Secured Revolving Crude Import Facility
between EP InterOil, Ltd. and BNP Paribas, Singapore
Branch. Amended August 14, 2006 and increased to $170
million.February 25, 2005
    
    Amended and Restated Indirect Participation Interest
Agreement between InterOil Corporation and the Investors
signatory theretoMay 12, 2004
    
    Amended Indirect Participation Interest Agreement
between InterOil Corporation and PNG Energy Investors,
LLCJuly 21, 2003
    
    Drilling Participation Agreement between InterOil
Corporation and PNG Drilling Ventures Limited. Amended
in May 2006March 26, 2002
    
    Engineering, Procurement and Construction Contract for
InterOil Refinery between InterOil Limited and Clough
Niugini LimitedJune 12, 2001
    
    Loan Agreement between EP InterOil, Ltd. and Overseas
Private Investment Corporation, as amended
 Annual Information Form     INTEROIL CORPORATION     41




---



##### 



Date
    
    DescriptionDecember 21, 2001
    
    Crude Supply Agency and Sales Agreement between EP
InterOil, Ltd. and BP Singapore Pte LimitedMarch 23, 2001
    
    Export Marketing and Shipping Agreement between EP
InterOil, Ltd. and Shell International Eastern Trading
CompanyFebruary 6, 2001
    
    Agreement for the Sale and Purchase of Naphtha between
EP InterOil, Ltd. and Shell International Eastern
Trading CompanyMay 29, 1997
    
    Refinery State Project Agreement between InterOil
Limited, EP InterOil, Ltd. and The Independent State of
Papua New Guinea
 Credit Agreement dated May 4, 2006
     Purchase and Sale Agreement dated January 4, 2006
  Code of Ethics and Business Conduct dated December 27, 2005
  $150 Million Secured Revolving Crude Import Facility dated August 12, 2005
  Annual Information Form     INTEROIL CORPORATION     42




---



##### 



Amended and Restated Indirect Participation Interest Agreement dated February 25, 2005
  Amended Indirect Participation Interest Agreement dated May 12, 2004
 th
 Drilling Participation Agreement dated July 21, 2003
  Engineering Procurement and Construction Contract dated March 26, 2002
  OPIC Loan Agreement dated June 12, 2001
  Crude Supply Agency and Sales Agreement
  Annual Information Form     INTEROIL CORPORATION     43




---



##### 



Export Marketing and Shipping Agreement dated March 23, 2001
  Agreement for the Sale and Purchase of Naphtha dated February 6, 2001
  Refinery State Project Agreement
    TRANSFER AGENT AND REGISTRAR
  Annual Information Form     INTEROIL CORPORATION     44




---



##### 



AUDIT COMMITTEE
 Charter of the Audit Committee
  Composition of the Audit Committee
   Relevant Education and Experience
  Gaylen J. Byker
    
    Gaylen J. Byker is President of Calvin College, a liberal
arts institution of higher learning, located in Grand
Rapids, Michigan. Dr. Byker has obtained four university
degrees including a PhD in international relations from
the University of Pennsylvania and a Doctorate of
Jurisprudence from the University of Michigan. Dr. Byker
is a former partner of Offshore Energy Development
Corporation where he was head of Development, Hedging and
Project Finance for gas exploration and transportation
projects offshore. Prior to joining OEDC, he was co-head
of Commodity Derivatives at Phibro Energy, Inc., a
subsidiary of Salomon, Inc. and head of the
Commodity-Indexed Transactions Group at Banque Paribas,
New York, with worldwide responsibility for hedging and
financing transactions utilizing long-term commodity
price risk management. Dr. Byker was manager of
Commodity-Indexed Swaps and Financings for Chase
Manhattan Investment Bank, New York, and was also a
lawyer at Morgan, Lewis & Bockius in Philadelphia,
Pennsylvania, U.S.Edward Speal
    
    Edward N. Speal is based in Toronto, Ontario and is
President and CEO of BNP Paribas (Canada). Previously,
Mr. Speal was Managing Director responsible for the
Energy, Project Finance and Corporate Banking businesses
for BNP Paribas in Canada. Mr. Speal was the President
and Chief Executive Officer of Paribas Bank of Canada
from 1996 to 2000. Mr. Speal worked in New York for
Banque Paribas running its Commodity Index Trading Group
from 1992 until 1996. From 1989 to 1991, he was managing
director of R. P. Urfer & Co., working on an exclusive
basis for Banque Paribas as Advisory Director assisting
in the establishment and development of its global
commodity derivatives business. From 1983 to 1989, Mr.
Speal worked for the Chase Manhattan Bank of Canada. Mr.
Speal is a Canadian citizen and is a graduate of Queens
University at Kingston.Donald R. Hansen
    
    Donald R. Hansen is currently Managing Director with
Scotia Waterous in their Calgary, Alberta head office.
His focus is on the Private Equity side of their
business. Mr. Hansen is also Chief Executive Officer of
his privately owned oil and gas consulting company, Red
Deer River Energy Corp. Formerly, Mr. Hansen was Vice
President, International Energy Operations for Unocal
Corp. in Houston, Texas. In his capacity with Unocal in
Houston, Mr. Hansen had regional VP responsibilities for
West Africa, Latin America, Caspian, China, Europe,
Russia, Alaska and Canada as well as new international
ventures. Prior to moving to Houston with Unocal, Mr.
Hansen resided in Calgary, Alberta and was President and
CEO of Northrock Resources Ltd., the Canadian business
unit and a wholly owned subsidiary of Unocal Corporation.
Northrock Resources Ltd. was a Canadian publicly traded exploration
 Annual Information Form     INTEROIL CORPORATION     45




---



##### 



and production company
that was sold to Unocal in 2000. Mr. Hansen was President and CEO of
Northrock Resources Ltd., and helped build the company
from a virtual start-up to over 30,000 boed of
production. Prior to Northrock, Mr. Hansen was Vice
President Operations for Sceptre Resources and held
positions in production engineering, exploitation and gas
marketing at Dome Petroleum and Amoco Canada.Mr. Hansen has had over 26 years of Exploration and
Production experience. He joins InterOil with
significant board experience and has served on the boards
of Black Gold Energy LLC, several Unocal domestic and
foreign subsidiaries, Asia Society Texas, Houston, the
Unocal Foundation and Northrock Resources Ltd. Mr.
Hansen has also served two terms as Governor, Canadian
Association of Petroleum Producers in Calgary, and has
served on the boards of; YMCA, Calgary, North West Family
Church, Calgary, and a private technology company,
Outland Technologies Inc. In 1980, Mr. Hansen earned a
Bachelor of Science degree in engineering from the
University of Saskatchewan with great distinction.
 Reliance on Exemptions
  External Auditor Service Fees
  2005
    
    
    2006Audit Fees(1)
    
    $
    333,334
    
    
    $
    618,669Audit-Related Fees(2)
    
    $
    10,180
    
    
    $
    84,383Tax Fees(3)
    
    $
    9,900
    
    
    $
    nilAll Other Fees(4)
    
    $
    22,884
    
    
    $
    124,364Total
    
    $
    376,298
    
    
    $
    827,416
 
 Notes:(1)
    
    Audit Fees means the aggregate fees billed by the issuers external auditor in each of the
last two fiscal years for audit fees.(2)
    
    Audit-Related Fees means the aggregate fees billed in each of the last two fiscal years for
assurance and related services by the issuers external auditor that are reasonably related to
the performance of the audit or review of the issuers financial statements and are not
reported under clause (a) above.(3)
    
    Tax Fees means the aggregate fees billed in each of the last two fiscal years for
professional services rendered by the issuers external auditor for tax compliance, tax
advice, and tax planning.(4)
    
    All Other Fees means the aggregate fees billed in each of the last two fiscal years for
products and services provided by the issuers external auditor, other than the services
reported under clauses Audit-Related Fees, Tax Fees and All Other Fees above and principally
relate to assistance responding to the SEC queries on 40-F of December 31, 2005 and also the
quarterly review of financial statements. 
 Annual Information Form     INTEROIL CORPORATION     46




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ADDITIONAL INFORMATION
 www.sedar.com www.interoil.com
  Annual Information Form     INTEROIL CORPORATION     47




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GLOSSARY OF TERMS
 Barrel, Bbl (petroleum)
 Condensate
 Crack spread
 EBITDA
 Feedstock
 GAAP
 IPF
 IPP
 LNG
 LPG
 LSWR
 Mark-to-market
 Naphtha
 Natural gas
 Natural gas measurements .
 
 Annual Information Form     INTEROIL CORPORATION     48




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PGK
 PPL
 PRL
 Sweet/sour crude
 Annual Information Form     INTEROIL CORPORATION     49




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Schedule A
 FORM 51-101F3
 REPORT OF MANAGEMENT AND
DIRECTORS ON OIL AND GAS DISCLOSURE
 Company
 (a)
    
    (i)
    
    proved and proved plus probable oil and gas reserves estimated as at December 31, 2006 using forecast prices and
costs; and(ii)
    
    the related estimated future net revenue; and(b)
    
    (i)
    
    proved oil and gas reserves estimated as at December 31, 2006 using constant prices and costs; and(ii)
    
    the related estimated future net revenue.
 The Company does not have any reserves as defined under National Instrument 51-101.
  (a)
    
    the content and filing with securities regulatory authorities of the other oil and gas
information;(b)
    
    the content and filing of this report.
  /s/ Phil E. Mulacek
    
    
    
    /s/ Gaylen J. BykerPhil E. Mulacek, Chairman and
    
    
    
    Gaylen J. Byker, DirectorChief Executive Officer/s/ Christian M. Vinson
    
    
    
    /s/ Roger N. GrundyChristian M. Vinson,
    
    
    
    Roger N. Grundy, DirectorOfficer and DirectorDated: March 30, 2007
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Schedule B
 InterOil Corporation
 Charter of the Audit Committee
of the Board of Directors
 " Charter " Committee " Board " Company "
 1.
    
    Purpose. The purpose of the Committee is to assist the Board in fulfilling its oversight
responsibilities relating to the Companys corporate accounting and financial reporting
processes and the audits of the Companys financial statements. In fulfilling this function,
the Committees primary duties and responsibilities are to:
 
    
    Serve as an independent and objective party to oversee the integrity of the
Companys financial statements and to monitor the Companys financial reporting process
and systems of internal controls regarding financial, accounting, and legal compliance.
    
    Monitor the qualifications, independence and performance of the Companys
independent auditors and the performance of the Companys internal auditing function.
    
    Provide an avenue of communication between the Board and the independent auditors,
management and the internal auditor.
    
    Report actions of the Committee to the Board with such recommendations as the
Committee may deem appropriate.
 The Committee shall be empowered to conduct or cause to be conducted any investigation
appropriate to fulfilling its responsibilities, and shall have direct access to the independent
auditors, the internal auditor and Company employees as necessary. The Committee shall be
empowered to retain, at the Companys expense, independent legal, accounting, or other
consultants or experts as the Committee deems necessary in the performance of its duties. The
Committee shall have sole authority to approve related fees and retention terms.2.
    
    Committee Membership.
 2.1.
    
    Composition and Appointment. The Committee shall consist of three or more members of
the Board. The Board shall designate members of the Committee. Membership on the
Committee shall rotate at the Boards discretion. The Board shall fill vacancies on the
Committee and may remove a Committee member from the membership of the Committee at any
time without cause. Members shall serve until their successors are appointed by the Board
and as otherwise required by applicable law or the rules of the American Stock Exchange
(AMEX").2.2.
    
    Independence and Financial Literacy. Each member of the Committee must meet the
independence, or an applicable exception, financial literacy, and experience requirements
of the AMEX rules and applicable Canadian and U.S. federal securities laws, including the
rules and regulations of the U.S. Securities and Exchange Commission (SEC"). In addition,
at least one member of the Committee must be financially sophisticated, as determined by
the Board, for purposes of applicable AMEX rules.2.3.
    
    Service on Multiple Audit Committees. If a member of the Committee serves on the audit
committee (or, in the absence of an audit committee, the board committee performing
equivalent functions, or in the absence of such committee, the board of directors) of more
than two other public companies, the Board must affirmatively determine that such
simultaneous service on multiple audit committees will not impair the ability of such
member to serve on the Committee.
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2.4.
    
    Subcommittees. The Committee may form and delegate authority to subcommittees
consisting of one or more members, including the authority to grant pre-approvals of audits
and permitted non-audit services, provided that decisions of said subcommittee to grant pre-approvals shall
be presented to the full Committee at its next scheduled meeting.
 3.
    
    Meetings.
 3.1.
    
    Frequency of Meetings. The Committee shall meet at least quarterly, or more frequently
as circumstances dictate. The schedule for regular meetings of the Committee shall be
established by the Committee. The Chairperson of the Committee may call a special meeting
at any time he or she deems advisable. Meetings may be by written consent. When
necessary, the Committee will meet in executive session outside the presence of any senior
executive officer of the Company. The Committee and any other independent members of the
Board that are not members of the Committee will meet in executive session, without the
presence of non-independent directors and management at least once annually.3.2.
    
    Minutes. Minutes of each meeting of the Committee shall be kept to document the
discharge by the Committee of its responsibilities.3.3.
    
    Quorum. A quorum shall consist of at least one-half of the Committees members, but no
fewer than two persons. The act of a majority of the Committee members present at a
meeting at which a quorum is present shall be the act of the Committee.3.4.
    
    Agenda. The Chairperson of the Committee shall prepare an agenda for each meeting of
the Committee, in consultation with Committee members and any appropriate member of the
Companys management or staff, as necessary. As requested by the Chairperson, members of
the Companys management and staff shall assist the Chairperson with the preparation of any
background materials necessary for any Committee meeting.3.5.
    
    Presiding Officer. The Chairperson of the Committee shall preside at all Committee
meetings. If the Chairperson is absent at a meeting, a majority of the Committee members
present at a meeting shall appoint a different presiding officer for that meeting.3.6.
    
    Private Meetings. The Committee may meet privately with management, the chief executive
officer (CEO"), the general counsel, the internal auditor, the independent auditors, and
as a Committee to discuss any matters that the Committee or each of these groups believe
should be discussed privately.
 4.
    
    General Review Procedures.
 4.1.
    
    Annual Report Review. The Committee shall review with management, the independent
auditors, and the internal auditors, the Companys year-end financial results prior to the
release of earnings and the Companys year-end financial statements prior to filing or
distribution. Such review shall also include the Companys disclosures that are to be
included in the Companys Annual Information Form, Annual Report, Managements Discussion
and Analysis for the year and Annual Report on Form 40-F. The Committee shall also discuss
with management, the independent auditors and the internal auditors any significant issues
or findings or any changes to the Companys accounting principles, any items required to be
communicated by the independent auditors in accordance with Statement on Auditing Standards
No. 61, as amended, and various topics and events that may have a significant impact on the
Company or that are the subject of discussions between management and the independent
auditors. The Committee shall approve the audited financial statements and recommend to
the Board whether or not the audited financial statements should be filed on SEDAR and
included in the Companys Annual Report on Form 40-F for the last fiscal year.4.2.
    
    Quarterly Report Review. The Committee shall review with management, the internal
auditors, and the independent auditors (if the independent auditors were involved in a
review of such financial statements), (i) the Companys interim financial results prior to
the release of earnings, the Companys interim financial statements prior to filing or
distribution and the disclosures that are to be included in the Companys Managements
Discussion and Analysis for each
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quarter and Form 6-K and (ii) the operation of the Companys internal controls and any special steps adopted
in light of material control deficiencies. The Committee shall discuss with management,
the internal auditors and the independent auditors (if required by GAAP, AMEX rules, or
applicable Canadian and U.S. federal securities laws), any significant findings or any
changes to the Companys accounting principles and any items required to be communicated by
the independent auditors in accordance with Statement on Auditing Standards No. 61 as
amended.4.3.
    
    Canadian and SEC Filings Review. The Committee shall review with financial management
and the independent auditor (if the independent auditors were involved in a review of such
financial statements) filings with Canadian securities regulators and the SEC which contain
or incorporate by reference the Companys financial statements or Managements Discussion
and Analysis and consider whether the information in these documents is consistent with
information contained in the financial statements.4.4.
    
    Reporting System Review. In consultation with management, the independent auditors,
and the internal auditors, the Committee shall consider the integrity of the Companys
financial reporting processes and controls, including computerized information system
controls and security. The Committee shall review and discuss with management the
Companys significant financial risk exposures and the steps management has taken to
monitor, control, and report such exposures. The Committee shall review significant
findings prepared by the independent auditors and the internal auditors together with
managements responses, including the status of previous recommendations.4.5.
    
    Non-GAAP Financial Data Review. The Committee shall review and discuss with management
earnings including the use of proforma, adjusted or other non-GAAP information,
financial guidance and other press releases of a material financial nature, as well as
financial information and earnings guidance provided to analysts and rating agencies. Such
discussion may be done generally consisting of discussing the types of information to be
disclosed and the types of presentations to be made.4.6.
    
    Off-Balance Sheet Review. The Committee shall discuss with management and the
independent auditor the effect of regulatory and accounting initiatives as well as
off-balance sheet structures on the Companys financial statements.4.7.
    
    Risk Assessment. Although it is the job of the CEO and senior management to assess and
manage the Companys exposure to risks, the Committee shall discuss guidelines and policies
to govern the process by which risk assessment and risk management is addressed.4.8.
    
    Audit Difficulties. The Committee shall review with the independent auditor any audit
problems or difficulties encountered in the course of the audit work and managements
response, any restrictions on the scope of activities or access to requested information;
and any significant disagreements between auditors and management. The Committee shall
work to resolve disagreements that may have occurred between auditors and management
related to the Companys financial statements or disclosures.4.9.
    
    Hiring Approval. The Committee shall approve the hiring of any employee or former
employee of the independent auditor.4.10.
    
    Financial Officer Code of Ethics Review. The Committee shall review and periodically
recommend modifications to the Companys Code of Ethics for the Chief Executive Officer and
Senior Financial Officers.4.11.
    
    Certification Review. The Committee shall review disclosures made to the Committee by
the Companys CEO and CFO during the certification process for the audited annual financial
statements, interim financial statements, related Managements Discussion and Analysis and
Form 40-F concerning significant deficiencies or material weaknesses in internal controls
and any fraud.
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4.12.
    
    Legal Counsel Review. On at least an annual basis, the Committee shall review with
the Companys legal counsel any legal matters that could have a significant impact on the
Companys financial statements or the Companys compliance with applicable laws and
regulations, and inquiries received from regulators or governmental agencies.
 5.
    
    Independent Auditors.
 Auditor Performance Review
 Approval of Independent Auditor and Pre-Approval of Services
 Auditor Independence
 Auditor Report
 Audit Partner Rotation
 Internal Controls Report
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National Office Consultation
 Audit Planning
 Accounting Principles
 Auditor Assurance
 Additional Auditors
 6.
    
    Internal Audit Department and Legal Compliance.
 Budget and Plan
 Approval of Internal Auditor
 Internal Audit Review
 7.
    
    General Audit Committee Responsibilities.
 Code of Ethics for the Chief Executive Officer and Senior Financial Officers
 Annual Information Form     INTEROIL CORPORATION     55




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Complaints Procedure
 Related Party Transactions
 Use of Assets
 General Activities
 8.
    
    Reports and Assessments.
 8.1.
    
    Board Reports. The Chairperson shall, periodically at his or her discretion, report to
the Board on Committee actions and on the fulfillment of the Committees responsibilities
under this Charter. Such reports shall include any issues that arise with respect to the
quality or integrity of the Companys financial statements, the Companys compliance with
legal or regulatory requirements, the performance and independence of the Companys
independent auditors and the performance of the Companys internal audit function.8.2.
    
    Charter Assessment. The Committee shall annually assess the adequacy of this Charter
and advise the Board of its assessment and of its recommendation for any changes to the
Charter. The Committee shall, if requested by management, assist management with the
preparation of a certification to be presented annually to the AMEX affirming that the
Committee reviewed and reassessed the adequacy of this Charter.8.3.
    
    Committee Self-Assessment. The Committee shall regularly make a self-assessment of its
performance, which shall include eliciting input from management, the Board and the General
Counsel on the performance of the Committee.8.4.
    
    Audit Committee Report. The Committee shall prepare any Audit Committee Reports
required by the rules of the Canadian Securities Administrators or the SEC to be included
in the Companys filings with such agencies.
   Annual Information Form     INTEROIL CORPORATION     56