Imperial Cites Gross Profit of $8.3MM for First Half of 2008
Imperial has announced its interim results for the six months ended June 30, 2008 and an operational update and review.
- On track to achieve 25,000 bopd by year end and 35,000 bopd by end 2009.
- Current rate of production in excess of 11,000 bopd and increasing.
- Average production for the first half of the year approximately 6,200 bopd.
- 30 new production and pressure support wells drilled with a further 30 expected to be drilled by year end.
- First oil now flowing into new Block 80 pipeline from Kiev Eganskoye field.
- New production license granted for Imperial's Golovnoye field, Block 74, Tomsk Region.
Reserves and Exploration
- Independently audited SPE 2P Reserves increased to 920 million boe (oil: 860 million bbls, gas: 60 million boe), 3P 3.4 billion boe (oil: 3.3 billion bbls, gas: 100 million boe).
- 40% increase in Russian Registered Reserves to 526 million boe, including latest addition of 67 million bbls from the Festivalnoye Field.
- Major new discovery at Kiev Eganskoye field with both SPE and Russian Registered Reserves still to be booked.
- Further new oil identified at Glukhovskoye and Festivalnoye fields.
- Testing continuing at Buranovskoye, Block 74 and Glukhovskoye, Block 70.
- Testing commenced on Imperial North Torgai exploration prospect.
Oil Service Companies
- Rus Imperial Group has now taken delivery of all 3 of its heavy top drive rigs.
- New rigs drilling production wells ahead of expectations recording a record time of 11 days for a 3,000 meter production well.
- Three new workover rigs and a new coiled tubing unit acquired.
- Frac business continues to operate successfully.
Financial & Corporate
- Imperial achieves gross profit for first time of US $8.3 million (H1 2007: nil), with operating losses of US $7.8 million (an improvement of 57% to H1 2007).
- Oil sales increase by 1,494% over same period last year to US $67.5 million (H1 2007: US $4.2 million).
- Net assets increase by 195% over same period last year to US $952.8 million (H1 2007: US $323.2 million).
- £306.7 million gross proceeds raised by way of successful rights issue at £6 per share with 97.4% taken up.
- Nil net gearing at June 30, 2008.
- Strong cash position projected to take Imperial through to become financially self-supporting in 2009.
Offer and Outlook
- Agreed the terms of a recommended pre-conditional offer from Jarpeno Limited, a wholly owned subsidiary of ONGC Videsh Limited.
- On track to achieve operational milestones and production of 25,000 bopd by year end.
- Reserves continuing to increase through exploration successes in 2008.
- Oil services companies operating successfully.
- Strong financial outlook.
Peter Levine, Chairman of Imperial, commented, "The first half of 2008 has been a significant period for Imperial. Operationally, we have addressed our earlier production issues and with oil now flowing through our third new pipeline we are rapidly increasing production. With funding now in place and encouraging new results from Kiev Eganskoye, we are confident of delivering on our objectives.
"As reported earlier, Imperial's Directors have now reached agreement with OVL on the terms of a recommended pre-conditional offer for the Company and intend unanimously to recommend shareholders accept the proposed offer, which reflects a premium of 62% to the closing price on July 11, 2008 being the last business day before Imperial first announced it had received an approach.
"Imperial has grown significantly from a pure exploration company and as Imperial moves into the next phase of its development, with production increasing further over the coming years, it makes strategic sense to be part of a larger group. The directors feel the share offer reflects Imperial's achievements and represents an excellent opportunity to realise a compelling value in cash."
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