Imperial to Begin Drilling on the Scotian Slope in July

Imperial Oil Resources Ventures Limited has awarded the contract for drilling services for a planned deepwater exploration well in 2003 to Ocean Rig Canada.

The semisub, Eirik Raude, will provide drilling services for the well, planned to commence drilling on Imperial's deepwater acreage on the Scotian Slope. Imperial's Eirik Raude plans call for drilling operations to begin as early as July, subject to final regulatory approval and rig availability, on a prospect called Balvenie, located on EL 2378 approximately 300 kilometers southeast of Halifax.

Imperial obtained 100-percent exploration rights to the two deepwater parcels on the Scotian Slope in 1999. The parcels cover an area of a quarter- million hectares, in water depths ranging from 200 to 3,000 meters. Imperial was awarded the licenses after proposing total exploration spending of $100 million. Three-dimensional seismic on these two parcels was acquired in 2000 and 2001.

Imperial will be the operator of the well. In 2002, Imperial reached an agreement with Talisman Energy under which Talisman will earn a 30-percent equity interest in two deepwater licenses (EL 2378 and 2379), by participating in the drilling of an exploration well on one of the blocks.

"The offshore Nova Scotia deepwater play contains a number of large, high- potential exploration leads, but remains unproven. Although the geologic risk and the drilling costs are high, the financial exposure is prudent to test this significant opportunity now," says K.C. Williams, senior vice-president and director of Imperial. "Extensive technical work has been performed to help assess the risks in preparation for drilling. The Balvenie well will be an important test for this lightly explored, deepwater basin."

In addition to these deepwater exploration interests offshore Nova Scotia, Imperial holds a nine-percent working interest in the Sable Offshore Energy Project, a 20-percent interest in six shallow-water offshore parcels in the vicinity of the Sable project and a one-sixth interest in three additional deepwater parcels.