IMPERIAL ENERGY CORPORATION PLC

IMPERIAL ENERGY CORPORATION PLC

Previous company name

Name change date

Company Overview
Imperial Energy Corporation PLC (Imperial), with head office in Leeds, United Kingdom, is an independent oil exploration and production company, focusing on creating value for shareholders through its ongoing three-tier strategy: increased production by appraisal and development of reserves; continued exploration of its substantial acreage base; additional strategic acquisitions. In pursuing this strategy, Imperial is building on its existing asset base and moving towards establishing itself as a significant independent oil and gas producer in Russia and the CIS.
Founded in 2004, Imperial has rapidly moved from being a junior oil and gas exploration company to an exploration and production organisation focused on rapid growth. The company is operating through four subsidiaries (Allianceneftegaz, Sevkazgra, Sibinterneft and Nord Imperial) located in two areas: Tomsk (Western Siberia, Russia) and Kostanai (Kazakhstan). Imperial sees its future as being Commonwealth of Independent States (CIS)-centric.
Imperial’s operations are focused on the Tomsk region of Western Siberia, Russian Federation and north-central Kazakhstan with the major part of work taking place in Tomsk. Imperial’s acreage in the Tomsk region extends to 16,948.96 square kilometers, second only to Tomskneft in size.
Imperial has already commenced production from three of these fields and is confident that production rates will continue to grow over time. Its assets are typically underdeveloped discoveries from the Soviet-era, during which time drilling technology, work-over methods and reservoir testing techniques were limited. As such, Imperial is employing the latest fraccing and stimulation techniques to maximise the potential of these assets.
Business Summary
The principal activities of the Group are oil exploration, development and production.
Description and history
The principal activities of the Group are oil exploration, development and production.

Founded in 2004, Imperial has rapidly moved from being a junior oil and gas exploration company to an exploration and production organisation focused on rapid growth. This shift marks a dramatic and exciting change for Imperial, which in a relatively short period of time has amassed not only sizable and highly promising acreage, but has started producing from a number of new wells.

The company is currently operating through four subsidiaries (Allianceneftegaz, Sevkazgra, Sibinterneft and Nord Imperial) located in two areas: Tomsk (Western Siberia, Russia) and Kostanai (Kazakhstan). Imperial sees its future as being Commonwealth of Independent States (CIS)-centric.

Nord Imperial holds three exploration & production licences representing three separate blocks (69, 77 and 80) which cover some 7,500 square kilometres. Imperial has already begun producing from two of the fields located on these blocks.

Sibinterneft holds two exploration licences representing one block (74) covering some 3,400 square kilometres. The block is close to producing fields and to the main Transneft oil pipeline on the west side of the Ob River. A total of thirteen exploratory wells had previously been drilled in the licence area by a Russian state company.

Allianceneftegaz holds six individual exploration licences representing three separate blocks that cover some 5,900 square kilometres. Blocks 70, 85 and 86 are located directly between producing Yukos and Gazprom Neft oil fields with similar petroleum geology.

The Sevkazgra oil exploration licence on the North Torgai Block covers more than 2,022 square kilometres of the relatively unexplored Kostanai province of northern Kazakhstan.

History:

The Company was incorporated on 24 February 2004 and admission of its shares to trading on AIM commenced on 5 April 2004.

Imperial was incorporated in February 2004 and was founded by the present Chairman of the Company, Peter Levine, and one other individual who at no time had any executive responsibilities and who is no longer involved with the Group. The Company was admitted to AIM in April 2004, and during 2004 began to acquire a portfolio of properties principally in the Tomsk region of Western Siberia as well as in the Kostanai region of North Central Kazakhstan.

The first asset acquired in July 2004 was a 43 per cent. net interest in Sibinterneft for US$975,000 in cash which gave Imperial its platform in the Tomsk region. This was followed, also in July 2004, with the acquisition by Imperial for US$100,000 in cash of a 75 per cent. interest in Sevkazgra, a prospect in the Kostanai region of North Central Kazakhstan. In October 2004, Imperial acquired a 51 per cent. net interest in Allianceneftegaz, which also holds licences in the Tomsk region. The Company paid US$4.95 million for this interest, of which US$1.75 million was paid in cash with the balance being paid in Ordinary Shares.

In November 2004, the Company acquired through its then 60 per cent. subsidiary, Nord Imperial, two new exploration licences in the Tomsk region. These licences were acquired at government auction for US$900,000 in cash. In December 2004, the Company acquired a further 20 per cent. of Nord Imperial for US$1.5 million in cash.

Part of the consideration for these acquisitions was funded by a placing in conjunction with the Company’s admission to AIM (which raised Ј850,000), and a further institutional placing in October 2004 which raised Ј20 million at Ј1.60 a share. The Company raised a further Ј50.6 million through an institutional placing in July 2005 at Ј4.00 a share, the proceeds of which were used to fund the Group’s working capital,
exploration and development expenditure and the further acquisitions referred to below.

In August 2005, Imperial acquired a further 39.5 per cent. interest in Allianceneftegaz for US$17.83 million of which US$7.325 million was paid in cash with the balance in Ordinary Shares. This was followed in November 2005 by the acquisition of the remaining 9.5 per cent interest for US$2.85 million in cash.

In October 2005, Imperial acquired the remaining 20 per cent. interest of Nord Imperial which it did not already own for US$22 million of which US$6.44 million was satisfied in cash with the balance paid in Ordinary Shares.

In March 2006, at a government auction held in Tomsk by the Ministry of National Resources, Nord Imperial agreed to acquire Block 80 in the Tomsk region for US$5.25 million and, in the same month, the Group moved into early production testing from two wells on Nord Imperial’s Block 77.

In June 2006, the Company raised a further Ј109 million through an institutional placing at Ј10.30 a share, the proceeds of which were to be used to continue its production programmes as well as the continued exploration of the Group s prospects in Western Siberia.

In July 2006, Imperial and Gazpromneft (formerly Sibneft) entered into a memorandum of co-operation stating their intent to co-operate in relation to exploration of hydrocarbon reserves, oil production and oil transportation and in July 2006 Imperial increased its net interest in Sibinterneft to 47.5 per cent. for US$171,500.

On 21 March 2007, the Company entered into the Debt Finance Facility with ABN AMRO Bank N.V. (as arranger) raising US$200 million, the proceeds of which are to be used to fund capital expenditure, operating costs and general corporate spending, and exploration expenditure (other than in Kazakhstan) up to US$40 million. It is anticipated that the Debt Finance Facility will be refinanced by a US$320 million facility in the fourth quarter of 2008 and a further US$30 million during the first half of 2009, the principal purpose of which will be to provide the Group with the funds necessary to repay the Debt Finance Facility at maturity and to meet the Group’s ongoing drilling and exploration obligations.

Takeover by Jarpeno Limited
The Company acquired by Jarpeno Limited a wholly owned subsidiary of ONGC Videsh Limited, a wholly owned subsidiary of Oil and Natural Gas Corporation Limited (IN55-54155) and delisted on LSE with effective from 9 March 2009.

Business Line
Oil exploration and production
Subsidiary

Advisor
DELOITTE & TOUCHE LLP
IPO date
4/5/2004
US SIC Code
1311
Company Address
9-8, York Place

City province or state postal code
LS1 2DS, LEEDS
Phone:
Fax:
Country address: UNITED KINGDOM
Website url: www.imperialenergy.com