Imperial Energy to Acquire Three New Rigs

Imperial Energy says that its third exploration well spudded in H2 2006, Golovnaya 353, Block 74, Tomsk Region, has identified oil and the company has now signed contracts to acquire the three new top-drive rigs.


The new exploration well Golovnaya 353, spudded November 15, 2006 has now been completed. From both core and wire-line logging descriptions 3 meters of oil has been identified in the Jurassic at a depth of 2542 meters.

The Golovnaya field is situated 70 kms north west of Imperial's Snezhnaya field, Block 77 in Russia, and can be conveniently linked into Imperial's own forthcoming Snezhnaya – Zavyalovo pipeline due for completion late summer 2007.

Frac testing is expected to take place within the next two months which will determine the extent of commerciality and reserves.

Rus Imperial Group ("RIG")

Contracts have now been entered into to acquire the three new top-drive rigs at a cost of US $17 million per rig. An initial deposit of US $6 million has been paid and receipt of the first rig by Imperial in Tomsk is scheduled for late Summer 2007 with the next two following on at monthly intervals thereafter. RIG's first operations are scheduled for Winter 2007.

A new experienced management team for RIG, has been recruited and has already started work, all based in Tomsk. The team is led by Sjouke Hijlkema (49) with some 20 years experience with Shell, latterly as Manager, Well Engineering at Salym, Western Siberia and most recently as a Senior Drilling Manager with TNK-BP. He is being assisted by Galina Chalova (40), who has extensive experience in the oil industry in Western Siberia including 8 years at Tomskneft and latterly with the Tomsk specialist drilling company, TBNG (Tomskburneftegaz), together with an experienced team of Russian specialists.

Peter Levine, Chairman, commented:

"This further exploration success is most satisfactory and demonstrates the prospectivity of our significant interests in Tomsk. We continue to recruit first class in-country professionals and a very experienced team is now in place at the head of Rus Imperial Group as we continue to progress plans for this important new venture.

Imperial remains clearly focused on performance and delivery."