Imperial to Begin Drilling Ops in Montague County

Imperial announced that its wholly owned subsidiary, Imperial O&G, will shortly commence drilling operations to reenter its existing abandoned wellbore located in a 35 acre mineral lease in Montague County, Texas, acquired by the Company on January, 21, 2011.

The Company has now finished its survey of the Nunnelly #1 wellbore, and believes there to be three existing casing strings within the well.

The Company has carefully prepared a multi step approach to perform the reentry in order to minimize costs in the event of unforeseen circumstances.

The survey to date has not revealed any obstacles within the hole above the assumed plug apart from a bend/kink in the near-surface section of the casing. This will require some minor remedial work; cutting off and replacing the top twelve feet of the casing strings; welding on casing hangers to prevent them from falling in the hole; and the introduction of surface equipment to prepare for drilling. A drill pad will be prepared and a well service rig will be mobilized to the site to drill out the assumed plug and attempt to get to the bottom of the existing well.

Subject to this stage of operations being successful and reaching the currently estimated Total Depth ("TD") of the well already believed to be drilled to 5,018 feet, additional work will be performed to continue drilling to approximately 6,500 feet, at which point both closed and open hole logs will be run. If these are satisfactory, the well is expected to be completed. It is expected that some existing perforations will need to be squeezed off and additional casing run to the new TD.

Imperial is currently concluding its own evaluation of the potential reserves and will update shareholders shortly.

Robert Durbin, CEO, commented, "I regard this as an excellent opportunity. The majority of the wellbore observed appears to be in pretty good shape and by going at this step by step we should be able to establish high probabilities of success without too much financial risk. If successful, the costs associated with the reentry should be substantially lower than drilling a new well. Even if we did have to drill from scratch, which is still an option, we still believe it likely to be economic."