EXHIBIT 15
MATERIAL CHANGE REPORT
PURSUANT TO
NATIONAL INSTRUMENT 51-102
1. NAME AND ADDRESS OF COMPANY
InterOil Corporation ("InterOil")
Suite 2, Level 2
Orchid Plaza 79-88 Abbott St.
Cairns, Queensland 4870
Australia
2. DATE OF MATERIAL CHANGE
September 2, 2004
3. NEWS RELEASE
InterOil filed a news release on SEDAR on September 2, 2004. A copy of the
news release is attached hereto as Appendix "A".
4. SUMMARY OF MATERIAL CHANGE
InterOil announced that it has closed on an additional US$15 million of
its previously announced private placement. This brings the total of US$45
million of senior convertible debentures to a limited number of
institutional investors. Due to interest from existing investors, the
previously announced private placement was increased from $40 million to
$45 million. The securities will be issued with an effective date of
September 3, 2004.
The debentures mature on August 28, 2009 and bear interest at a rate of
8.875% per annum, payable quarterly. The debentures are convertible at the
investor's option at any time into common shares at a fixed conversion
price of US$20.16 (C$26.45) per share. The definitive agreement provides
that, starting 21 months from closing, the investors will have the option
to request redemption of portions of the original principal amount from
InterOil in equal amounts at stated dates until the maturity date. At
InterOil's option, any cash payments contemplated under the debentures may
be made in registered common shares issued at a ten percent discount to
market.
In connection with the private placement, InterOil issued to the investors
five-year warrants to purchase 359,415 common shares at an exercise price
equal to US$21.91 (C$28.75).
5. FULL DESCRIPTION OF MATERIAL CHANGE
Please see the news release attached hereto as Appendix "A"
6. RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102
Not Applicable.
7. OMITTED INFORMATION
None.
8. EXECUTIVE OFFICER
Further information regarding the matters described in this report may be
obtained from Gary M. Duvall, Vice President, Corporate Development of
InterOil, who is knowledgeable about the details of the material change
and may be contacted at +1 281 292 1800.
9. DATED at The Woodlands, Texas this 9th day of September, 2004.
INTEROIL CORPORATION
By: (Signed) "Gary M. Duvall"
-------------------------
Name: Gary M. Duvall
Title: Vice President,
Corporate Development
APPENDIX "A"
NEWS RELEASE
NEWS RELEASE (INTEROIL LOGO)
INTEROIL CLOSES ON ADDITIONAL US$15 MILLION OF
SENIOR CONVERTIBLE DEBENTURES
SEPTEMBER 02, 2004-TORONTO, CANADA - INTEROIL CORPORATION (IOL:TSX)
(IOC:ASX/POMSOX), a Canadian company with operations in Papua New Guinea, today
announced that it has closed on an additional US$15 million of its previously
announced private placement. This brings the total to US$45 million of senior
convertible debentures to a limited number of institutional investors. Due to
interest from existing investors, the previously announced private placement was
increased from $40 million to $45 million. The securities will be issued with an
effective date of September 3, 2004. InterOil intends to use the net proceeds
for additional working capital and general corporate purposes.
"This transaction greatly enhances InterOil's near-term working capital
position for inventory as our refining operations advance through the
commissioning phase, and provides incremental capital for InterOil's drilling
program and the securing of drilling rigs with improved capabilities" said Mr
Phil Mulacek, CEO of InterOil.
The debentures mature on August 28, 2009 and bear interest at a rate of
8.875% per annum, payable quarterly. The debentures are convertible at the
investor's option at any time into common shares at a fixed conversion price of
US$20. 16 (C$26.45) per share. The definitive agreement provides that, starting
21 months from closing, the investors will have the option to request redemption
of portions of the original principal amount from InterOil in equal amounts at
stated dates until the maturity date. At InterOil's option, any cash payments
contemplated under the debentures may be made in registered common shares issued
at a ten percent discount to market.
In addition, if after the one-year anniversary of closing, the trading
price exceeds US$28.23 (C$37.03) per share in certain circumstances. InterOil
may require the investors to convert the debentures into common shares at the
fixed conversion price.
The debentures have certain customary covenants regarding, among other
things, the debt that InterOil may incur in an event of default under the
debentures, InterOil may be required to repay any outstanding amounts plus
accrued and unpaid interest, plus a 15% premium.
In connection with the private placement, InterOil issued to the investors
five-year warrants to purchase 359,415 common shares at an exercise price equal
to US$21.91 (C$28.75).
This private placement was made under an exemption from the registration
requirements of the United States Securities Act of 1933, as amended, and
purchasers may not offer or sell the securities sold in the offering in the
absence of an effective registration statement or exemption from registration
requirements. As part of the terms of the private placement, InterOil has agreed
to file a registration statement to cover the resale of the securities by the
investors.
This private placement has received all necessary regulatory approvals,
including that of the Toronto Stock Exchange.
This news release is issued pursuant to rules under the United States
Securities Act of 1933 and shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such
state.
This news release is not an offer of securities for sale in the United
States. Securities may not be offered or sold in the United States absent
registration or pursuant to an exemption from registration. Any public offering
of securities made in the United States will be made by means of a prospectus
that may be obtained from the issuer or selling security holder and will contain
detailed information about the company and management, as well as financial
statements.
InterOil is building a vertically integrated energy company whose primary
focus is Papua New Guinea and the surrounding region. Its assets comprise an
oil refinery, upstream petroleum exploration licenses, and retail and commercial
distribution assets. The majority of the refined products from InterOil's
refinery is secured by off-take contracts with Shell and InterOil's wholly-owned
subsidiary, InterOil Products Limited. BP Singapore is InterOil's agent for all
crude oil supplied to the refinery. InterOil is also undertaking an extensive
petroleum exploration program within its eight million acre license area located
in Papua New Guinea.
InterOil's common shares are traded in Canada in Canadian dollars on the Toronto
Stock Exchange under the symbol IOL and on the Australian Stock Exchange, (ASX)
in CHESS Depositary Interests (CDI), in Australian dollars under the symbol IOC
which trade on a 10:1 basis to common shares. For more information please see
the InterOil website at: www.interoil.com.
FOR FURTHER INFORMATION:
Gary M Duvall Anesti Dermedgoglou
V.P., Corporate Development V.P., Investor Relations
InterOil Corporation InterOil Corporation
gary.duvall@interoil.com anesti@interoil.com
Houston, TX USA Caims. Qld Australia
Phone: +1 281 292 1800 Phone: +6174046 4600
CAUTIONARY STATEMENTS
This press release contain forward-looking statements. All statements, other
than statements of historical facts, included in this release, including without
limitation, statements regarding our drilling plans, business strategy, plans
and objectives of management for future operations and those statements preceded
by, followed by or that otherwise include the words "believe", "expects",
"anticipates", "intends", "estimates" or similar expressions or variations on
such expressions are forward-looking statements. The Company can give no
assurances that such forward-looking statements will prove to be correct. Risks
and uncertainties include, but are not limited to, the existence of
underground deposits of commercial quantities of oil and gas; fluctuations in
prices for oil and gas production; curtailments or delays in development due to
mechanical, operating, marketing or other problems; capital expenditures that
are either significantly higher or lower than anticipated because the actual
cost of identified projects varied from original estimates; and from the number
of exploration and development opportunities being greater or fewer than
currently anticipated.
The Company currently has no reserves as defined under Canadian National
Instrument 51-101 reserve definitions. See the Company's filings with the
Canadian securities regulators for additional risks and information about the
Company's business.