The Canadian-based company said cash and cash equivalents increased to approximately US$137.20 million at the end of the quarter compared to US$23.90 million at 31 March 2004.

During the quarter InterOil completed a US$125 million capital raising and also finalised the acquisition of BP Papua New Guinea Limited, including its petroleum product wholesale and distribution assets and business, according to CEO Phil Mulacek.

“The financial results for the first quarter did not meet our expectations due to unforseen start-up expenses," Mulacek said.

"However, we are confident that the procedures implemented since practical completion will result in substantial improvements in our profitability.”