Imperial's 2006 E&P Program Achieving Results Ahead of Expectations

Three of the new wells at Imperial's first producing field, Snezhnaya, Block 77, Tomsk, Western Siberia, have been successfully fracced, with the fourth due to be fracced later in May 2006. Initial flow rates are in line with expectations, complementing the three wells already producing. Block 77 early production is on track for 1,500 – 2,000 Bopd by the end of May 2006.

Imperial also reports a significant result from its new appraisal well Maiskaya 393. The well was spudded on March 9, 2006, on the Maiskaya Field, Block 70, Tomsk, Western Siberia and encountered some 11 meters of net pay with good porosity in the Upper Jurassic Vasyugan formation at a depth of between 2,652 to 2,665 meters. An open hole test on this section demonstrated production capability without any stimulation of 750 Bopd. Imperial is now planning a new horizontal well on the Maiskaya Vasyugan reservoir. The Maiskaya 393 well has been deepened to evaluate the underlying Lower Tyumen reservoir, which was previously tested in Maiskaya 392. An open hole test on part of this section in Maiskaya 393 at a depth of between 2,952 to 3,004 meters successfully demonstrated production capability without any stimulation of 200 Bopd, confirming the presence of a better reservoir some 40 meters higher than in Maiskaya 392. This reservoir will be stimulated by fraccing this coming winter which can be expected to substantially increase productivity in preparation for bringing the well into production in 2007.

These results enable Imperial to plan for early production to commence from the Maiskaya Field in 2007. Processing facilities and infrastructure will be constructed during the 2006 – 2007 winter. This field will then be connected to Imperial's proposed 70km pipeline connecting its Aikagalskaya Field in Block 69 to the Transneft system which will enable production to commence in the second half of 2007.

Subject to results from the forthcoming appraisal drilling, early production from Aikagalskaya will follow a similar schedule. It is also planned to connect the producing Snezhnaya Field to the Transneft pipeline system by means of a separate 40km pipeline. Both pipelines will commence construction in the 2006 – 2007 winter for completion by summer 2007.

With the addition of the program for Maiskaya Field to its existing plans for the Snezhnaya and Aikagalskaya Fields, Imperial is upgrading its objectives so that it is now targeting production of 25,000 Bopd by the end of 2008.

Imperial is confident that it will be able to grow its already substantial reserve base. Acquisition during this winter of over 1,000 km of seismic over Imperial's acreage has now been completed. A total of 9 exploration wells are planned for 2007, each on new prospects in addition to the three new exploration prospects in this year's program.