InterOil Corporation, a Canadian company with operations in Papua New Guinea had a gas and gas liquids discovery at ELK #1 in Papua New Guinea. The well flowed wet gas at 2,000 psi at an estimated 30 to 50 MMCFPD for approximately 30 minutes during a gas kick before the well could be shut in.

A drill stem test conducted on June 24, 2006 demonstrated a wet gas flow at surface and a surface pressure on the casing of 3,150 psi, indicating a bottom hole pressure of approximately 3,700 psi. The calculated absolute open flow of the well based on the drill stem test was 150 MMCFPD.

While information from the well to date is positive, the data and the current interpretation are provisional and subject to confirmation after further drilling and testing. The company intends to continue to drill this well in order to evaluate the potential commercial nature of the reservoir.

Due to the pressures being encountered in this well, the company is currently evaluating its options for continuing to drill this well.