InterOil Exploration and Production — Proxy Solicitation & Information Statement 2010

May 28, 2010

INTEROIL

INTEROIL E&P ASA

STRANDVEIEN 50

NO-1366 LYSAKER

WWW.INTEROIL.NO

T +47 6751 8650

F +47 6751 8660

INFO@INTEROIL.NO

Til aksjonærene i/to the shareholders of

INTEROIL EXPLORATION AND PRODUCTION ASA

Lysaker, 27. mai 2010	Lysaker, May 27 2010
Vedlagt sendes:	Enclosed please find:
• Innkalling til ordinær generalforsamling	• Notice of Annual General Meeting
• Årsrapport for 2009	• Annual Report for 2009
• Valgkommittéens innstilling	• Recommendation of the nomination committee
• Fullmaktsskjema	• Proxy Form
• Møteseddel	• Attendance Form
Med vennlig hilsen	Kind regards
INTEROIL EXPLORATION AND PRODUCTION ASA	INTEROIL EXPLORATION AND PRODUCTION ASA

Organisasjonsnummer: 988 247 006

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INTEROIL

Til aksjonærene i Interoil Exploration and Production ASA /

For the shareholders in Interoil Exploration and Production ASA

| INNKALLING TIL ORDINÆR
GENERALFORSAMLING I INTEROIL
EXPLORATION AND PRODUCTION ASA | NOTICE OF ORDINARY
GENERAL MEETING IN INTEROIL
EXPLORATION AND PRODUCTION ASA |
| --- | --- |
| Denne innkallingen er utarbeidet på norsk med uofisiell engelsk oversettelse.
Ved uoverensstemmelse mellom norsk og engelsk versjon gjelder den norske versjonen. | This notice has been drafted in Norwegian language with an unofficial English translation. In case of discrepancy between the Norwegian and English version, the Norwegian version shall prevail. |
| Det innkalles herved til ordinær generalforsamling i Interoil Exploration and Production ASA
Torsdag 17. juni 2010 kl 10:00
i selskapets lokaler i Strandveien 50, 1366 Lysaker. | An ordinary general meeting in Interoil Exploration and Production ASA is hereby convened for
Thursday 17 June 2010 at 10:00 hours
in the company's offices in Strandveien 50, 1366 Lysaker. |
| Styret foreslår følgende dagsorden: | The Board of Directors proposes the following agenda: |
| 1. Åpning av generalforsamlingen ved styrets leder Mårten Rød | 1. Opening of the general meeting by Chairman of the Board Mårten Rød |
| 2. Fremleggelse av fortegnelse over møtende aksjonærer og fullmektiger | 2. Presentation of list of participating shareholders, in person or by proxy |
| 3. Valg av møteleder og person til å medundertegne protokollen
Styret foreslår at styrets leder velges som møteleder og at styrets leder foreslår en person til å signere protokollen sammen med møteleder. | 3. Appointment of persons to chair the meeting and to co-sign the minutes
The Board of Directors proposes that the Chairman of the Board is elected as chairman of the meeting and that the Chairman of the Board suggests a person to co-sign the minutes together with the chairman of the meeting. |
| 4. Godkjenning av innkalling og dagsorden | 4. Approval of notice of meeting and agenda |
| 5. Godkjenning av årsregnskapet for 2009 for selskapet og konsernet samt årsberetningen for 2009, herunder disponering av årets resultat
Styret foreslår at generalforsamlingen godkjenner årsregnskapet for 2009 for Interoil Exploration and Production ASA og konsernet samt styrets årsberetning for 2009. Årets underskudd foreslås fremført i ny regning.
Årsrapport for 2009 følger som Vedlegg 1 til innkallingen. | 5. Approval of the annual accounts for 2009 for the company and the group, and the directors' report for 2009, including the allocation of the result for the year
The Board of Directors proposes that the general meeting adopts the annual accounts for 2009 of Interoil Exploration and Production ASA and the group, and the directors' report for 2009. The Board of Directors proposes to transfer the deficit for 2009 forward on to new account.
The annual report for 2009 is enclosed to the notice as Appendix 1. |

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| 6. Fastsettelse av honorar til styret og medlemmene av valgkomiteen

Valgkomiteen foreslår at generalforsamlingen fastsetter honorar til styrets medlemmer for 2009 som følger:

• USD 100 000 til styrets leder, Mårten Rød
• USD 60 000 til hvert av de øvrige styremedlemmene

Valgkomiteen foreslår videre at generalforsamlingen fastsetter honorar til valgkomiteens medlemmer for 2009 som følger:

• NOK 30 000 til Rolf Johan Ringdal
• NOK 10 000 til Aage Thoen
• NOK 10 000 til Berit Kjøll

Valgkomiteens innstilling følger som Vedlegg 2 til innkallingen. | 6. Determination of the remuneration of the members of the Board of Directors and the nomination committee

The nomination committee proposes that the general meeting resolves the director's remuneration for the year 2009 as follows:

• USD 100,000 for the Chairman of the Board, Mårten Rød
• USD 60,000 for each of the other board members

The nomination committee furthermore proposes that the general meeting resolves the members of the nomination committee's remuneration for the year 2009 as follows:

• NOK 30,000 for Rolf Johan Ringdal
• NOK 10,000 for Aage Thoen
• NOK 10,000 Berit Kjøll

The recommendation from the nomination committee is enclosed to this notice as Appendix 2. |
| --- | --- |
| 7. Godkjennelse av godtgjørelse til revisor

Styret foreslår at generalforsamlingen godkjenner revisors godtgjørelse for 2009 for Interoil Exploration and Production ASA etter regning fra revisor. | 7. Approval of the auditor's fee

The Board of Directors proposes that the general meeting approves the auditor's fee for 2009 for Interoil Exploration and Production ASA in accordance with invoice from the auditor. |
| 8. Valg av styremedlemmer

Valgkomiteen foreslår at generalforsamlingen gjenvelger følgende styremedlemmer for en periode på to år:

• Berit Kjøll, styremedlem
• Patricia Guerra, styremedlem

Valgkomiteens innstilling følger som Vedlegg 2 til innkallingen. | 8. Election of board members

The nomination committee proposes that the general meeting re-elects the following board members for a period of two years:

• Berit Kjøll, board member
• Patricia Guerra, board member

The recommendation from the nomination committee is enclosed to this notice as Appendix 2. |
| 9. Valg av medlemmer til valgkomiteen

Valgkomiteen foreslår at generalforsamlingen gjenvelger valgkomiteens eksisterende medlemmer for en periode på to år:

• Rolf Johan Ringdal, leder
• Aage Thoen, medlem
• Berit Kjøll, medlem | 9. Election of members to the nomination committee

The nomination committee proposes that the general meeting re-elects the nomination committee's existing members for a period of two years:

• Rolf Johan Ringdal, chairman
• Aage Thoen, member
• Berit Kjøll, member |

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Valgkomiteens innstilling følger som Vedlegg 2 til innkallingen.	The recommendation from the nomination committee is enclosed to this notice as Appendix 2.
10. Styrets erklæring om lønn og annen godtgjørelse til ledende ansatte i Interoil Exploration and Production ASA

Styret foreslår at generalforsamlingen behandler styrets erklæring om lønn og annen godtgjørelse til ledende ansatte i samsvar med kravene i allmennaksjeloven § 5-6 (3).

Erklæringen om lønn og annen godtgjørelse til ledende ansatte er inntatt i styrets redegjørelse i årsrapporten for 2009, som er vedlagt som Vedlegg 1. | 10. The Board’s declaration on salary and other remuneration for the management in Interoil Exploration and Production ASA

The Board of Directors proposes that the general meeting discusses the Board of Directors’ declaration on salary and other remuneration to the management in accordance with the requirements in the public limited companies act section 5-6 (3).

The declaration on salary and other remuneration to the management is included in the statement from the Board of Directors in the annual report for 2009, enclosed as Appendix 1. |
| oooOOOooo | oooOOOooo |
| Interoil Exploration and Production ASA har en aksjekapital på NOK 1 092 250, fordelt på 21 845 000 aksjer, hver med pålydende verdi NOK 0,05.

Interoil Exploration and Production ASA eier ingen egne aksjer. Hver aksje gir rett til én stemme på selskapets generalforsamlinger. Aksjonærene har følgende rettigheter i forbindelse med en generalforsamling:

• Rett til å møte i generalforsamlingen, enten personlig eller ved fullmektig.
• Talerett på generalforsamlingen.

• Rett til å ta med én rådgiver og gi denne talerett.

• Rett til å kreve opplysninger av styrets medlemmer og administrerende direktør etter de nærmere bestemmelser i allmennaksjeloven § 5-15.

• Rett til å få fremsette alternativer til styrets forslag under de saker generalforsamlingen skal behandle.

Aksjonærer har rett til å møte og stemme ved fullmektig. Det må i så tilfelle fremlegges en skriftlig og datert fullmakt. Vedlagte fullmaktsskjema (Vedlegg 3) kan benyttes. Dersom vedlagte fullmakt benyttes og fullmakt gis til et av styrets medlemmer slik angitt i fullmakten, kan fullmakten inneholde | Interoil Exploration and Production ASA has a share capital of NOK 1,092,250 distributed on 21,845,000 shares, each with a nominal value of NOK 0.05.

Interoil Exploration and Production ASA does not hold any treasury shares. Each share carries one vote at the company’s general meetings. The shareholders has the following rights in respect of a general meeting:

• The right to attend the general meeting, either in person or by proxy.
• The right to speak at the general meeting.
• The right to be accompanied by an advisor at the general meeting and to give such advisor the right to speak
• The right to require information from the members of the Board of Directors and the Chief Executive Officer in accordance with further regulations in the Norwegian public limited companies act section 5-15.
• The right to present alternatives to the Board of Directors’ proposals in respect of matters for discussion at the general meeting.

Shareholders may appoint a proxy to attend and vote on their behalf. In this case a written and dated proxy must be provided. The enclosed proxy form (Appendix 3) may be used. If the enclosed proxy form is used and proxy is granted to one of the members of the Board of directors as stated in the proxy form, the proxy form can include voting |

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instruks for stemmegivningen.	instructions.
Aksjonærer som ønsker å delta i generalforsamlingen enten personlig eller via fullmektig må sende inn påmeldingsskjema (Vedlegg 4) til Selskapets adresse som angitt i det vedlagte påmeldingsskjema slik at Selskapet har det i hende senest 14. juni 2010, jf. Vedtektenes § 6. Den som ikke er påmeldt innen fristens utløp, kan nektes adgang til generalforsamlingen.	Shareholders who wish to attend the general meeting either personally or by proxy, are requested to return the enclosed attendance form (Appendix 4) to the Company to the address stated in the below sample notice. Such notice should be received by the Company at the latest 14 June 2010, cf. the Articles of Association's § 6. Please be informed that if such notice is not received by the Company at the time stated above, the shareholder may be refused admittance to the General Meeting.
Denne innkallingen og andre saksdokumenter er tilgjengelig på selskapets hjemmeside www.interoil.no.	This notice and other relevant documents are available on the company's web page www.interoil.no.
Vedlegg:	Appendices:
1. Årsrapport for 2009	1. Annual report for 2009
2. Valgkomiteens innstilling	2. The recommendations of the nomination committee
3. Fullmaktsskjema	3. Proxy Form
4. Møteseddel	4. Attendance Form

Lysaker, 27 May 2010

For styret i Interoil Exploration and Production ASA /

On behalf of the Board of Directors of Interoil Exploration and Production ASA

Mårten Rød
Styrets leder/Chairman of the Board

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VEDLEGG 1 / APPENDIX 1

Årsrapport for 2009 / Annual Report 2009

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VEDLEGG 2 / APPENDIX 2

Valgkomiteens innstilling / The recommendations of the nomination committee

Report and recommendation from
the Nomination Committee
to the 2010 annual shareholders meeting of
Interoil Exploration and Production ASA

The nomination committee (the "Committee") of Interoil Exploration and Production ASA (the "Company") hereby renders its report and recommendation to the Company's shareholders prior to the 2010 annual shareholders meeting.

1. The Board

The Company's board of directors (the "Board") is currently composed of Mårten Rød (chairman), Patricia Guerra, Berit Kjøll, Gian Angelo Perrucci and Thor Håkstad (the "Directors"). Patricia Guerra and Berit Kjøll have now served the two year term for they were elected in 2008. The other Directors were elected last year, and do not stand for election.

1. The Committee's work

The Committee has held discussions with the Directors to review and assess the composition of the Board, its supervision of the operations of the Company, and the co-operative relationships within the Board and towards the management of the Company. The Committee has had access to the Board's internal evaluation of its operations as recommended by the Corporate Governance Guidelines. The Committee has also been in dialogue with certain major shareholders prior to rendering this report. In February 2010, the Committee posted a notice on the Company's website with an invitation to shareholders to present views and proposals in respect of the upcoming election, but no input has been received.

1. Recommendation

The Committee proposes that Patricia Guerra be re-elected for another two year term. The Committee (exclusive of Ms. Kjøll, who declared a conflict of interest) also proposes that Berit Kjøll be re-elected for another two-year term.

By way of professional background, Ms. Guerra and Ms. Kjøll are current Directors, and their background is well known and detailed, inter alia, in the Company's annual report

The Committee has again considered whether the Board should be strengthened with additional finance capability and experience, particularly within the areas of finance and capital markets, ref the similar point mentioned in the Committee's Report and Recommendation last year. In light of the ongoing efforts to find tenable solutions to the Company's financial challenges, the Committee has, in consultation with the existing Directors, deemed it to be in the best interest of the Company and the shareholders that continuity be maintained pending a resolution. The Board has retained assistance from reputable financial and legal expertise, and is well placed and equipped to deal with the immediate issues. The Committee believes, however, that the composition of the Board going forward may be re-considered once the financial platform and the future of the Company has been sorted out.

1. Board remuneration

The Committee proposes that the Directors be remunerated in line with established practice, but slightly adjusted for the declining USD value, and the testing times experienced during 2009. In light of extraordinary burdens on and efforts of the chairman, it is, however proposed by the majority of the Committee members that his fee be increased from USD 75,000 to USD 100,000, and that each of the other Directors receive USD 60,000. Ms Kjøll abstained on this issue for reasons of conflict.

1. The Nomination Committee – composition and remuneration

According to section 7 of the articles of association of the Company, the Committee shall consist of three members, who shall serve for two year periods. All Committee members were elected in

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1. The Committee has not received any suggestions for change, and all three members are willing to continue for another term. Accordingly, it is proposed that each of the Committee members be re-elected, with Rolf Johan Ringdal acting as chairman.

The Committee has held several meetings internally and with third parties. Based on time spent, it is proposed that the Committee members are remunerated as follows: Each of Berit Kjøll and Aage Thoen NOK 10,000, and Rolf Johan Ringdal NOK 30,000 (all amounts exclusive of VAT).

Oslo, 20 May 2010

Rolf Johan Ringdal (s.)
Berit Kjøll (s.)
Aage Thoen (s.)

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FULLMAKT

VEDLEGG 3

Som eier av _ [NB – MÅ FYLLES UT] aksjer i Interoil Exploration and Production ASA gir jeg/vi herved

☐ Styrets leder
☐ ___________ (sett inn navn)

fullmakt til å representere og avgi stemmer for mine/våre aksjer på ordinær generalforsamling i Interoil Exploration and Production ASA den 17. juni 2010.

Dersom det ikke er krysset av for noen av alternativene ovenfor, vil fullmakten bli ansett gitt til styrets leder. Dersom fullmakt er gitt til styrets leder har denne adgang til å gi et annet medlem av styret eller ledelsen rett til å representere, og avgi stemme for, aksjene som fullmakten omfatter.

Dersom aksjonæren ønsker det og styrets leder er oppnevnt som fullmektig kan stemmeinstruksen nedenfor fylles inn og sendes selskapet. Styrets leder vil da besørge stemmegivning i henhold til stemmeinstruksen.

Stemmeinstruks:

Vedtak	Stemmer for	Stemmer mot	Avstår fra å stemme
3. Valg av møteleder og person til å medundertegne protokollen
4. Godkjenning av innkalling og dagsorden
5. Godkjennelse av årsregnskapet for 2009 for selskapet og konsernet samt årsberetningen for 2009, herunder disponering av årets resultat
6. Fastsettelse av honorar til styret og medlemmene av valgkomiteen
7. Godkjennelse av godtgjørelse til revisor
8. Valg av styremedlemmer
- Berit Kjøll, styremedlem
- Patricia Guerra, styremedlem
9. Valg av medlemmer til valgkomiteen
- Rolf Johan Ringdal, leder
- Aage Thoen, medlem
- Berit Kjøll, medlem
10. Styrets erklæring om lønn og annen godtgjørelse til ledende ansatte i Interoil Exploration and Production ASA

Dersom det er gitt stemmerettsinstruks gjelder følgende:

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-Dersom det er krysset av for "Stemmer for" innebærer det en instruks til fullmektigen om å stemme for forslaget i innkallingen, med de endringer som styret, styrets leder, møteleder eller valgkomiteen måtte foreslå. Ved eventuelle endringer i forhold til de forslag som fremgår av innkallingen, kan fullmektigen etter eget skjønn avstå fra å stemme for aksjene.

-Dersom det er krysset av for "Stemmer mot" innebærer det en instruks til fullmektigen om å stemme mot forslaget i innkallingen, med de endringer som styret, styrets leder, møteleder eller valgkomiteen måtte foreslå. Ved eventuelle endringer i forhold til de forslag som fremgår av innkallingen, kan fullmektigen etter eget skjønn avstå fra å stemme for aksjene.

-Dersom det er krysset av for "Avstår fra å stemme" innebærer det en instruks til fullmektigen om ikke å avgi stemme for aksjene.

• Dersom det ikke krysses av for noe alternativ, innebærer det at fullmektigen står fritt til å avgjøre hvordan det skal stemmes for aksjene.

-Ved valg er instruksen begrenset til å gjelde avstemning over valg av de kandidater som er angitt i fullmaktsskjemaet.

-Ved avstemninger over saker som ikke fremgår av innkallingen, men som lovlig tas opp til avgjørelse ved generalforsamlingen står fullmektigen fritt til å avgjøre hvordan det skal stemmes for aksjene. Det samme gjelder avstemning over formelle forhold, f.eks. møteleder, avstemningsrekkefølge eller avstemningsform.

• Dersom aksjonæren har innsatt annen fullmektig enn styrets leder og ønsker å gi vedkommende instruks om stemmegivning er dette et forhold mellom aksjonæren og fullmektigen som er selskapet uvedkommende. For dette tilfellet påtar selskapet seg ikke ansvar for å kontrollere om fullmektigen avgir stemme i henhold til instruksen.

Underskrift: ____ *
Navn: ____ (blokkbokstaver)
Sted/dato: _____

Fullmakten sendes til: Interoil Exploration and Production ASA, Strandveien 50, 1366 Lysaker, Norge eller per fax no. (+47) 67 51 86 60 eller til: info@interoil.no.

• Dersom fullmakt gis på vegne av et selskap eller annen juridisk person, må det vedlegges firmaattest/og eller fullmakt som viser at den som undertegner har kompetanse til å avgi fullmakten.

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APPENDIX 3

PROXY FORM

As the owner of ______ [NB – MUST BE FILLED IN] shares in Interoil Exploration and Production ASA I/we hereby appoint

☐ The Chairman of the Board of Directors
☐ _______ (insert name)

as my/our proxy to represent and vote for my/our shares at the annual general meeting of Interoil Exploration and Production ASA to be held on 17 June 2010.

If none of the alternatives above has been crossed out the Chairman of the Board will be considered appointed as proxy. If the Chairman of the Board has been appointed as proxy, the Chairman of the Board can appoint another member of the Board or the management to represent and vote for the shares covered by the proxy.

If the shareholder so desires and the Chairman of the Board of Directors has been appointed as proxy, the voting instructions below can be filled in and returned to the company. The Chairman of the Board of Directors will accordingly ensure that voting is carried out in accordance with the instructions.

Voting instructions:

Resolution	Vote for	Vote against	Vote witheld
3. Appointment of persons to chair the meeting and to co-sign the minutes
4. Approval of notice of meeting and agenda
5. Approval of the annual accounts for 2009 for the company and the group, and the directors’ report for 2009, including the allocation of the result for the year
6. Determination of the remuneration of the members of the Board of Directors and the nomination committee
7. Approval of the auditor’s fee
8. Election of members to the Board of Directors
- Berit Kjøll, board member
- Patricia Guerra, board member
9. Election of members to the nomination committee
- Rolf Johan Ringdal, chairman
- Aage Thoen, member
- Berit Kjøll, member
10. The Board’s declaration on salary and other remuneration for the management in Interoil Exploration and Production ASA

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If voting instructions are given the following applies:

• If the box "Vote for" has been crossed out, this implies that the proxy is instructed to vote for the proposal in the notice, with any changes suggested by the board, the Chairman of the Board, the chairman of the meeting or the nomination committee. In case of amendments of the proposals included in the notice, the proxy can at the proxy's own discretion refrain from voting for the shares.

• If the box "Vote against" has been crossed out, this implies that the proxy is instructed to vote against the proposal in the notice, with any changes suggested by the board, the Chairman of the Board, the chairman of the meeting or the nomination committee. In case of amendments of the proposals included in the notice, the proxy can at the proxy's own discretion refrain from voting for the shares.

• If the box "Vote witheld" has been crossed out, this implies that the proxy is instructed to refrain from voting for the shares.

• If none of the boxes has been crossed out, this implies that the proxy can decide at the proxy's own choice how the shares shall be voted for.

• In respect of elections, the instructions are only valid for voting in respect of elections of the candidates that have been listed in the proxy form.

• In respect of a vote over matters that are not included on the agenda and which may validly come before the meeting the proxy is free to decide how the shares shall be voted for. The same applies for a vote over matters of formal nature, such as chairperson of the meeting, voting order or voting procedure.

• If a shareholder has inserted another person than the Chairman of the Board as proxy, and wants to give such person instructions on voting, this is a matter for the shareholder and the proxy that is irrelevant to the company. In such a situation the company does not undertake any responsibility to verify that the proxy votes in accordance with the instructions.

Signature: ____ *
Name: ____ (block letters)
Place/date: _____

Please send the proxy to: Interoil Exploration and Production ASA, Strandveien 50, 1366 Lysaker, Norge or per fax no. (+47) 67 51 86 60 or to: info@interoil.no.

• If the proxy is given on behalf of a company or other legal entity, a certificate of registration and/or power of attorney must be attached so as to evidence that the person signing the proxy form is properly authorized.

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VEDLEGG 4

MØTESEDDEL

Undertegnede vil møte på generalforsamling i Interoil Exploration and Production ASA den 17. juni 2010.

Jeg eier: _____ aksjer NB – MÅ FYLLES UT

Jeg har fullmakt for: _____ aksjer (fullmakten(e) bes vedlagt)

Underskrift: ______

Navn: ______ (blokkbokstaver)

Sted/dato: ______

Møteseddelen sendes til: Interoil Exploration and Production ASA, Strandveien 50, 1366 Lysaker, Norge eller per fax no. (+47) 67 51 86 60 eller til: info@interoil.no

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APPENDIX 4

ATTENDANCE FORM

The undersigned will attend the annual general meeting of Interoil Exploration and Production ASA on 17 June 2010.

I own: _______ shares NB – MUST BE FILLED IN

I am proxy for: _______ shares (please attach proxy form(s))

Signature: _______

Name: _______ (block letters)

Place/date: _______

Please send the attendance form to: Interoil Exploration and Production ASA, Strandveien 50, 1366 Lysaker, Norge or per fax no. (+47) 67 51 86 60 or to: info@interoil.no.

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