AUSTIN, Texas, Sept. 27, 2011 /PRNewswire/ -- Imperial Resources, Inc. (OTCBB: IPRC) and its wholly owned subsidiary, Imperial Oil & Gas, Inc. (together the "Company", "Imperial") today provides an update summarizing and expanding upon recent developments.
Oklahoma Resource Play
The Oklahoma Resource Play remains Imperial's key focus and value driver. A leasing program is in progress and a total of 1,800 acres have been leased so far, providing locations for 6 wells. Our partner continues to experience success in a nearby and analogous project, recently frac'ing the inner horizontal leg after previously frac'ing only the outer half. The results demonstrate some excellent levels of success and the intention is to frac the full well bore on all of Imperial's prospective wells. Our partner's results have reinforced Imperial's belief that the potential of the Company's Oklahoma Project is very large indeed compared to the Company's current capitalization. If successful, the Company believes it will transform Imperial's production and reserve numbers.
As announced on December 20, 2010 Imperial has taken a nominal working interest in a well in the same blanket formation to gain further access to the science behind the Oklahoma play, without exposing the Company to significant risk. This well is currently being drilled. Assessment of the drilling results, particularly the engineering and performance of the new fracture stimulation process to be applied to the formation, is expected to further de-risk the development of the Oklahoma Resource Play.
Green Tide Salt Water Disposal Facility
On April 27, 2011 Imperial acquired an incomplete Salt Water Disposal Facility ("SWDF") located in the heart of the Barnett Shale producing area in Texas. The 42 acre site is ideally located with over 6,000 wells within a 20 mile radius, all of which produce frac water for years after they have been frac'ed which has to be disposed of in a safe manner, typically by trucking the salt water to a disposal site. Green Tide has a complete surface facility with pumps, tanks and separation units and a wellbore which has now been deepened by Imperial's operating subsidiary, Big Dig Operating, Inc., into the Ellenburger formation, finding one of the major lost circulation zones containing the high porosity strands and ideal for the planned disposal volumes of water.
The SWDF is permitted to accept up to 15,000 barrels of salt water per day. Imperial believes that the Green Tide SWDF is perfectly positioned to rapidly attract the business to take it to full capacity due to its geographic proximity to such a large number wells and its ease of access from a main State Highway. Imperial believes that competitors lack these advantages. Current disposal rates range between $0.40 and $0.60 per barrel of salt water. Additional revenue is expected to be generated from sales of oil extracted from the disposed water, estimated in excess of 40 barrels of oil per day. Operating costs are anticipated at less than 10% of the overall revenue generated once full capacity is reached. Imperial believes that by having successfully deepened the wellbore to the required depth there has been a very substantial uplift to the asset value of the SWDF.
On January 25, 2011 Imperial entered into a Farmout Agreement for the right to earn acreage and a 90% working interest by drilling infill wells ("Stateline") in the existing Sawyer Field, in Lea County, New Mexico. The acreage at Stateline is sufficient to accommodate 4 vertical wells at relatively shallow depths of < 5,000 feet and is expected to produce primarily oil. The Company has conducted an internal Reserve Evaluation which estimates that total reserves will be in excess of 250,000 BO and 400,000 Mcf of gas. The internal Reserve Evaluation for Stateline classifies the reserves as Proven Undeveloped Reserves (also referred to as 1P, or P90), at the very lowest end of industry risk.
The Company is developing a plan to exploit additional reserves by using a three well horizontal drilling plan as opposed to the originally intended 4 vertical. Two of these horizontal wells will be producers with the third used as an injection well. An independent evaluation has been carried out indicating primary proven undeveloped reserves (P90) of 360,000 BO and secondary reserves of 582,700 BO - combined reserves of 942,700 BO.
Imperial continues to receive monthly production revenues from its 14.9% ownership in a gas well in Colorado, Texas. Operated by the El Paso Corporation, the well has been on production since the start of 2009 and continues to produce at rates of around 500 Mcf of gas per day and 10 BO per day.
Over the last 12 months Imperial and its subsidiaries have raised capital, debt and have converted debt to a value of up to $3,200,000 in difficult capital markets, reflecting the attractiveness of its operations.
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.OB), 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.
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 14, 2011. 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.
Rob Durbin, CEO
SOURCE Imperial Resources, Inc.