The Canadian-headquartered company has entered into a contract with Loadmaster Rig Systems of Houston, Texas, under which Loadmaster will complete the design, engineering and manufacture of the rig.

“There is a worldwide shortage of readily available heli-portable rigs,” said InterOil CEO Phil Mulacek.

“We expect this rig to significantly benefit our drilling program during 2005 and beyond.”

The rig is to be a ‘double’ with a minimum depth drilling capability of 13,123 feet (4,000 metres), according to Interoil.

“The rig is expected to be adequate for the majority of our identified drilling targets,” Mulacek said.

“Loadmaster has agreed to design the rig so that it can be bundled for efficient helicopter transportation over the difficult terrain within Papua New Guinea.”

The contracted delivery date to Papua New Guinea is early in the third quarter of 2005, but the contract provides for a financial incentive if delivery is made in May this year.

InterOil is developing a vertically integrated energy company focusing on Papua New Guinea and the surrounding region. Its assets comprise an oil refinery, upstream petroleum exploration licenses, and retail and commercial distribution assets.

The bulk of the refined products from InterOil’s refinery are secured by off-take contracts with Shell and InterOil’s wholly-owned subsidiary, InterOil Products Limited. BP Singapore is InterOil’s agent for crude oil supplied to the refinery.

InterOil is also undertaking an extensive petroleum exploration program in its eight-million acre Papua New Guinea acreages.

Interoil is listed on the Toronto, New York and Australian stock exchanges.