“We have made significant financial and operational improvements over the past year with the first quarter 2007, a vast improvement over the first quarter 2006,” Mulacek said.

“These results were largely attributable to the solid performance achieved by the midstream and downstream business segments, each reporting profits and positive EBITDA.”

The loss included $C3.4 million associated with the cost of the Elk trend seismic program in eastern PNG.

InterOil is aiming to build on its Elk discovery in order to prove up enough gas to feed a Port Moresby LNG development. Preliminary data from the seismic survey was encouraging, according to Mulacek.

“Once we have received the final processed data, we expect to have a much clearer image of the limestone formation and the extent of the overall structure.”

He also said InterOil had made substantial progress on its LNG project and expected to reach several key milestones this year.