Imperial Hits Oil Pay at South Festivalnoye

Imperial Energy on Friday announced that the South Festivalnoye 5 well, spudded on March 26, 2007, has encountered very promising hydrocarbon reservoirs. In addition, the company released an update on other drilling activity currently underway on its assets in Russia's Tomsk region.

Blocks 70/85, South Festivalnoye field

The new exploration well South Festivalnoye 5 has now been completed. The well encountered 18.2 meters of oil in the Bazhenov formation at a depth of 2791 meters. This formation is not a typical reservoir in the Tomsk region and, based on analogies with the Khanty Mansik region, this discovery is very promising for Imperial's development in the South Festivalnoye field.

The well also encountered commercial hydrocarbons in the Tyumen reservoir from a depth of 3115.3 meters with a total thickness of 62.5 meters.

The South Festivalnoye field can be conveniently linked into Imperials' newly constructed Maiskoye-Festivalnoye-Luginetskoye pipeline, which will connect to Transneft's tie-in at Luginetskoye.

. Block 70, Maiskoye field

On the Maiskoye field, a fourth new horizontal well--Maiskoye 102--has also been spudded. It complements the already-drilled wells 394 and 395 as well as well 396, which is in the process of completion of its horizontal leg.

Block 77, Snezhnoye field

At the Snezhnoye field, production well 146 has been completed, and drilling is now in progress at the next new production well being well 148.

Christopher Hopkinson, Chief Executive of Imperial Energy, commented:

"Imperial continues to move forward with its exploration and development plans. The drilling results so far at South Festivalnoye in two different sections are very promising and further support our confidence in this field."

Imperial Energy is an independent oil exploration and production company listed on the Main Market of the London Stock Exchange with operations in the Russia Federation. The company is targeting 10,000 bopd production by end of 2007, 25,000 bopd by the end of 2008, and 35,000 bopd by the end of 2009. Imperial has an extensive program in 2007, including some 30 production, appraisal wells and exploration wells, the completion of the construction of 208km of pipeline, oil processing facilities and the development of its own rig company.