Imperial Energy Reiterates Position on Reserves
Imperial Energy notes statements made over the course of last week regarding the findings of a working group set up to examine the differences between DeGolyer & MacNaughton (“D&M”) and GKZ reserve estimates and reports of notification by the Ministry of this matter to the LSE / FSA.
Imperial repeats its previous statements on the subject. It stands robustly behind the correctness of the data and information given to D&M and the credibility of its reserves and resources.
The Company does not see any valid grounds for any such report to be made to the LSE / FSA regarding this matter and indeed is writing to the FSA on certain matters affecting its share trading and share price.
In respect of the three subject fields of concern to the Commission and other aspects Imperial comments without limitation:
- Kiev-Eganskoye field - two wells not one were tested which both showed oil at the equivalent of commercial flow rates. For the remaining wells which did not show unstimulated flow rates, SPE rules permit analogous wells where intensive production techniques such as frac technology has been applied, to be taken into account.
- Festivalnoye field – up to date SPE rules inter alia permit the use of geoscience and engineering data from analogous wells. Imperial cannot identify where such has been taken into account in the conclusions. In any event 2007 testing on wells in this field was successful and supports the information. The results of Imperial’s drilling work on this field do not seem to have been taken into account. Further extensive new 2D seismic carried out by Imperial does not appear to have been taken into account.
- Snezhnoye field – only five wells seem to have been taken into account where as there are nine wells on the field; all have been fracced with good commercial oil flows. Successful drilling on that field continues. The SPE report takes into account new 3D seismic and new reservoirs tested by Imperial.
- As set out in Imperial’s Prospectus of May 2007, the production and exploration licences for these fields being comprised in Blocks 80, 69 and 77, Tomsk, Western Siberia, are not subject to any renewal as they extend to 2031 and 2029 respectively. Similarly Imperial’s Maiskoye field’s production and exploration licence extends to 2027.
- Subsequent to the effective date of the D&M’s report of 31st December 2006, significant successes have been made by Imperial, which strongly support the level of Imperial’s reserves. These will all be reviewed by D&M as part of its standard and comprehensive update, which it is about to undertake.
Imperial welcomes any cooperation with the working group and any joint assessment of the Company’s reserves. Imperial is confidant that all concerns can be answered satisfactory. Imperial’s operations continue as usual and the Company is making significant progress on its development program as it moves towards its targets and objectives.
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