EXHIBIT 14
MATERIAL CHANGE REPORT
PURSUANT TO
NATIONAL INSTRUMENT 51-102
1. NAME AND ADDRESS OF COMPANY
InterOil Corporation ("InterOil")
Suit 2, Level 2
Orchid Plaza 79-88 Abbott St.
Cairns, Queensland 4870
Australia
2. DATE OF MATERIAL CHANGE
August 27, 2004
3. NEWS RELEASE
InterOil filed a news release on SEDAR on August 27, 2004. A copy of the
news release is attached hereto as Appendix "A".
4. SUMMARY OF MATERIAL CHANGE
InterOil announced that it has entered into a definitive agreement for the
private placement of US$30 million to US$40 million of senior convertible
debentures to a limited number of institutional investors.
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 New York this 27th day of August, 2004.
INTEROIL CORPORATION
By: (Signed) "Gary M. Duvall"
-------------------------
Name: Gary M. Duvall
Title: V.P, Corporate Development
APPENDIX A"
NEWS RELEASE
[INTEROIL LOGO]
NEWS RELEASE
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAW.
INTEROIL CORPORATION ANNOUNCES PRIVATE
PLACEMENT OF UP TO US$40 MILLION OF SENIOR
CONVERTIBLE DEBENTURES
AUGUST 27, 2004-TORONTO, CANADA - INTEROIL CORPORATION (IOL:TSX)
(IOC:ASX/POMSoX), a Canadian company with operations in Papua New Guinea today
announced that it has entered into a definitive agreement for the private
placement of US$30 million to US$40 million of senior convertible debentures to
a limited number of institutional investors. InterOil intends to use the net
proceeds for additional working capital and general corporate purposes.
The debentures have a final maturity date of five years and one day from
issuance 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 incure. 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 will issue to the
investors five-year warrants to purchase 239,610 to 319,480 common shares
depending on the final amount of the placement. The warrants will have an
exercise price equal to US$21.91 (C$28.75).
This private placement will be 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 is subject to all necessary regulatory approvals,
including that of the Toronto Stock Exchange.
This news release is issued pursuant to Rule 135(c) under the 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 Cairns,Qld Australia
Phone: +1281 292 1800 Phone: +617 4046 4600
CAUTIONARY STATEMENTS
This press release contains 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.