Imperial Resources, Inc. Obtains Loan Funding for Key Salt Water Disposal Facility Development
AUSTIN, Texas, June 20, 2011 /PRNewswire/ -- Imperial Resources, Inc. (OTCBB: IPRC) and its wholly owned subsidiary, Imperial Oil & Gas, Inc. (together the "Company", "Imperial") is pleased to announce that, directly in line with its announcement of June 7, 2011, the Company has entered into an agreement for the development funding of its Salt Water Disposal Facility ("Facility") located in the heart of the Barnett Shale in Texas.
The Company is delighted to have raised, so soon after acquisition, the necessary funds to cover near term amortisation payments, deepen the Facility disposal well bore and conduct marketing operations. It anticipates that the Facility, if successfully developed as the Company's first material project, will be highly cash generative compared to its cost and will assume a business value considerably in excess of its acquisition and development price.
The agreement is for an unsecured convertible loan ("Loan") of up to $1,200,000 from a lender ("Lender") to Green Tide Water Disposal, Ltd. ("Green Tide"), for the development of the Facility. Green Tide is a limited Partnership formed by Imperial's subsidiary Big Dig Operating, Inc. to own the Facility and into which Imperial has introduced the Facility assets. Imperial owns 99% of Green Tide as Limited Partner and 100% of the equity of the General Partner, which will run the Facility and owns the remaining 1% of Green Tide.
The Loan is expected to be rapidly drawn down as required to develop the Facility. Preparation work is expected to start almost immediately with a view to commencing deepening operations as soon as a quality rig operator becomes available. The Company is in the process of obtaining quotations for the work, which will include the provision of a whipstock to assist in the kick off of the side track. Subject to rig availability, the Company anticipates completing all work required to put the Facility back into commercial operations within eight weeks.
Prior to and during the drilling & completion period the Company will commence marketing of the Facility with the objective of securing contracts for disposal operations to start immediately the Facility is operational. Subject to drilling and marketing success the Company anticipates commercial disposal operations and first revenues from the Facility by the end of the summer.
For up to 60 days after the date of the Loan agreement and after the Facility has opened for business the Company may pre-pay the Loan together with any accrued interest, without penalty.
The Facility
The Facility is conveniently located for the disposal of large volumes of salt water generated from essential fracture stimulation operations on Barnett Shale gas wells. There are approximately 6,000 such wells within 20 miles of the Facility.
It consists of a relatively new, completed surface plant on approximately 41 acres of freehold land well located by a State highway, and an existing shallow well bore. The Facility has an existing permit for the disposal of up to 15,000 barrels of salt water per day into the Ellenberger formation. The investment in the Facility by its original owner is estimated by the Company to be in excess of $5,000,000. Imperial plans to deepen the well and reopen the Facility to dispose of up to 15,000 barrels of salt water a day.
The Facility is one of two key projects identified as transformational for Imperial (the other being the Company's Oklahoma project).
Tom Barr, Director of Imperial, said: "In around just a month we have acquired and quickly financed the development of the Facility in tough capital markets, which in my view demonstrates the strength of the project."
About Imperial Resources, Inc.
Imperial Resources, Inc., through its wholly owned subsidiary, Imperial Oil & Gas, Inc. has a highly focused, risk-averse strategy of building a substantial portfolio of oil and gas assets through its access to niche, low risk oil and gas opportunities in the onshore U.S. Imperial aims to exploit projects which can deliver cash flows normally associated with higher risk projects but without exposure to high risk failure rates.
To find out more about Imperial Resources, Inc. (OTCBB: IPRC), visit our website at www.imperialresourcesinc.com. Details of the Company's business, finances, appointments and agreements can be found as part of the Company's continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission's EDGAR database.
Forward-Looking Statements
Statements in this news release that are not statements of historical fact are forward-looking statements, which are subject to certain risks and uncertainties. Forward-looking statements can often be identified by words such as "expects," "intends," "plans," "may," "could," "should," "anticipates," "assumes," "likely," "believes" and words of similar import. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management. Actual results may differ materially from those expressed or implied by forward-looking statements due to a variety of factors that may or may not be foreseeable or within the reasonable control of the Company. Readers are cautioned not to place undue reliance on such forward-looking statements. Additional information on risks and other factors that may affect the business and financial results of the Company can be found in filings of the Company with the U.S. Securities and Exchange Commission, including without limitation under the caption "Risk Factors" in the Company's Annual Report on Form 10-K filed on July 9, 2010. Except as otherwise required by law, the Company disclaims any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this news release to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Contact:
Rob Durbin, CEO
Telephone:
512 322-5740
http://www.imperialresourcesinc.com/pages/contact
SOURCE Imperial Resources, Inc.
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