Kiwi billionaire Chandler sells out of InterOil

The unexpected bail-out of Kiwi billionaire Richard Chandler from the register of Papua New Guinea player InterOil has raised questions in the market about where the secretive investor's stake has ended up and created a potential opening through the resulting slide in the stock price.

New York-listed InterOil shares have dropped from over $US60 to less than $US42 as Chandler Corporation sold down, with trades said to have taken place in three major tranches over the past three weeks, including a 2 million tranche on Tuesday, according to sources.

At one stage, Chandler's stake in the up-and-coming PNG LNG player approached about 15 per cent, but that is said to have now dwindled to near zero, with no explanation having been given to InterOil, Street Talk understands.

The delay in substantial shareholder notices of several weeks has kept the identity of the buyers of the shares a mystery for now.

InterOil is often touted as a potential target for a cashed-up oil and gas player looking to secure a foothold in a substantial gas resource in Papua New Guinea, with Woodside Petroleum sometimes speculated about as a potential suitor.