InterOil (NYSE: IOC) will release its quarterly report on Monday, and investors have grown increasingly impatient with the energy exploration company in recent months. With most shareholders expecting the company to come to a deal with oil and gas giant ExxonMobil (NYSE:XOM) to help InterOil cash in on its extensive natural gas reserves in Papua New Guinea, progress has been slow, and investors have to weigh the possibility that a deal with Exxon might never happen.

Investors have stuck by InterOil for so long because of the size of its Papua New Guinea assets, which have the potential to serve the energy needs of nearby China, India, and other Asian markets. But while many believed that the key to success was finding a way to move forward with its planned liquefied natural gas project, InterOil has changed gears and now appears to be relying more on Exxon for its sales strategy. 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 report.

Stats on InterOil

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$322.37 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will InterOil earnings recover without ExxonMobil?
Analysts have gotten a lot less optimistic in recent months about InterOil earnings, more than doubling their 2013 loss estimates and now expecting a loss in 2014 as well. The stock has struggled as well, falling 22% since early August.

Much of that decline came in August, when the company gave investors somewhat of a surprise in its earnings report. A bigger-than-expected loss weighed on InterOil's stock, but that paled in comparison to the strategic shifts that the company said it was contemplating. With new CEO Michael Hession saying that InterOil would put off plans to build its own LNG facility in favor of supplying ExxonMobil's rival facility, InterOil's profitability will rest entirely on its ability to negotiate a favorable deal with the oil giant.

Despite ongoing negotiations, InterOil hasn't announced a successful deal with Exxon since then. In fact, reports from late last month suggested that talks with Exxon have slowed, making it clear that InterOil does not have the upper hand in terms of its negotiating position. With its extensive financial resources, Exxon can afford to wait out InterOil if doing so will get it better terms.

InterOil isn't completely dependent on ExxonMobil, though. French energy company Total (NYSE:TOT) has explored for oil and gas in Papua New Guinea and might be interested in buying InterOil's assets. Moreover, Total could help InterOil move forward with its LNG plant if they agreed to work together.

In the InterOil earnings report, watch to see how the company describes the status of its talks. Finalizing a deal could send the stock soaring, but it's unclear how much longer investors will be willing to wait before seeing progress.

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