InterOil (NYSE:IOC) will release its quarterly report on Monday, and the energy exploration company's shares have been all over the map lately as investors respond to crosscurrents in its various projects. But the prospects for InterOil earnings have started to look more favorable in the long run, as those projects keep moving forward and look likely to get the company out of the red within the next couple of years.

InterOil is best known for its huge natural gas reserves in Papua New Guinea, where the company has sought to build a massive liquefied natural gas facility to serve energy-hungry Asian markets nearby. But with competition from much larger companies, InterOil faces some major hurdles with the LNG project, leading some investors to pay closer attention to whether InterOil can develop other opportunities. Let's take an early look at what's been happening with InterOil over the past quarter and what we're likely to see in its quarterly report.

Stats on InterOil

Analyst EPS Estimate

($0.07)

Year-Ago EPS

($0.66)

Revenue Estimate

$261.35 million

Change From Year-Ago Revenue

(12.6%)

Earnings Beats in Past Four Quarters

2

Source: Yahoo! Finance.

The long-term path to prosperity for InterOil earnings
In recent months, analysts have gotten more optimistic about the long-term prospects for InterOil earnings. Leaving June-quarter estimates unchanged, they've narrowed their loss projections for the full 2013 year by $0.25 per share and boosted profit estimates for 2014 by 30%. The stock has responded favorably, climbing 10% since early May.

Most of InterOil's gains came after the company's first-quarter earnings report in May, in which the company reported an unexpected profit on modest revenue growth of almost 4%. Investors reacted even more favorably to news that InterOil expected to find a major partner for its LNG plant project, which would likely satisfy concerns from the Papua New Guinean government about the small company's ability to complete the project on its own.

For months, investors had speculated that Royal Dutch Shell (NYSE:RDS-A) would become InterOil's LNG project partner, going up against rival ExxonMobil (NYSE:XOM) and its competing LNG facility in the island nation. Total (NYSE:TOT) has also been involved in the island nation, although its search for gas in Papua New Guinea hasn't yielded big results yet. But in late May, InterOil announced that Exxon had entered talks with InterOil to develop the Elk and Antelope gas fields, potentially furthering its own Papua New Guinea LNG project and leaving the fate of the InterOil LNG project in doubt. After a brief spike, disappointed investors send shares plunging.

InterOil successfully handled one challenge, though, replacing outgoing CEO Phil Mulacek with Michael Hession, who has had extensive experience in the LNG field in his previous job with Australia's Woodside Petroleum. Hession announced in July that talks with Exxon were progressing, and that helped send shares up somewhat.

Meanwhile, InterOil has continued its operations of its refinery in Papua New Guinea. Last month, the company got new financing for working capital for the facility, replacing a smaller facility and expanding its available capital by $110 million.

In the InterOil earnings report, watch closely for any signs of difficulty in the talks with Exxon. With Shell waiting in the wings and with Total and other companies potentially representing dark-horse partner candidates, InterOil could get a lot of attention if Exxon doesn't get a deal done quickly.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Total SA. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.