Imperial Energy Reiterates Position on Russian Oil Reserves
Imperial notes the media reporting of comments allegedly made by certain representatives of the Ministry of Natural Resources, Russian Federation, last Friday regarding its reserves.
1. No official or unofficial notification has been received by Imperial from the Ministry regarding discrepancy of reserves.
2. Imperial maintains the correctness of data supplied to its internationally reputable, independent reserve auditors, DeGolyer and MacNaughton ("D & M").
3. It is impossible in any practical way to artificially contrive a full sub-surface data set to such an extent that it has a material input on calculated reserves. D & M has not at any time expressed any concern as to the reliability of any input data provided to it. D & M is currently undertaking an indepth field study of Imperial's Festivalnoye field which has supported the data previously given and has identified new oil bearing reservoirs.
4. Based on that data D & M made their own estimates of Imperial's Reserves, which have further been internally re-audited within D & M by a separate D & M team and reconfirmed. Those reserves were signed off by D & M and incorporated in Imperial's prospectus when it moved from AIM to the Official List of the London Stock Exchange in May.
5. D & M is the leading independent SPE reserves auditor in Russia, carrying out work for major companies including Rosneft. D & M's SPE reserves reports are relied upon in connection with many material international institutional share and fund raising issues and transactions. Imperial is required to report on an internationally recognised basis i.e. SPE pursuant to its position on the Official List of the London Stock Exchange.
6. Imperial's SPE reserves, within the competence of estimate by D & M, are entirely different to Russian Registered Reserves, within the competence of the Ministry. Methodology and matters taken into account vary materially. Registered Russian Reserves being much more production based. Taking into account the nature of Imperial's operations and its business progress the variance is entirely understandable.
7. Imperial started with exploration territory, has committed and risked some US$600 million over 3 years progressed with a speed unmatched in the Tomsk region and has successfully identified significant reserves, completed major infrastructure and pipelines and is only now moving into production.
8. Imperial quotes from a letter sent on 12 July 2007 to the Tomsk office of Rosnedra by the Russian nationally renowned geologist A.E. Kontorovich through his Russian Academy of Science, Siberia Division, Institute of Petroleum, Geology and Geophysics:
"We have to state that our institute possesses significant experience in analysing the results of license obligations fulfilment for many companies in West and Eastern Siberia.
We rarely saw such efficient results as those achieved by OOO Allianceneftegaz (Imperial Energy). In fact the company discovered a completely new oil bearing region in the South of Tomsk region allowing perspectives for oil and gas production growth".
9. Accordingly Imperial is progressing as quickly as possible towards registering its Russian Reserves and although this is an understandably formal and lengthy procedure expects material increases in due course as it moves towards its significant targets.
10. As a company working in Russia, Imperial recognises the importance of Russian Registered Reserves and intends in due course to move to duality of reporting with appropriate explanations as to the differences in standards and the mechanics of, as the case may be, estimation and registration.
11. Imperial has appointed D & M to perform its standard annual reserves report of its interests in Russia with an effective date of 31 December 2007. D & M's data collection work starts in October and D & M are already performing an in-depth field development study of Imperial's large Festivalnoye field, which is proceeding most satisfactorily.
12. Imperial is pleased to assist the Ministry in any way regarding this or any other matter and looks forward to resolving any valid issues if indeed there are any.
- OVL's Offer to Acquire Imperial Energy Declared Wholly Unconditional (Dec 31)
- Oil Majors Set to Gain As Smaller Rivals Struggle (Oct 23)
- Sinopec, CNOOC Agree on $1.8B for Angola Asset (Oct 01)