re: IEC.L - Imperial Energy 1090p
- Fully underwritten secondary announced..
- Company has a NEW PRODUCTION TARGET of 25000boepd by the end of 2008 !!
- Capex guidance for 2006 around $60m USD
honestly do like this low-key, overachiever attitude that this company repeatedly displays..
investegate.co.uk
Imperial Energy Corporation PLC
10 May 2006
IMPERIAL ENERGY CORPORATION PLC ('IMPERIAL' OR THE 'COMPANY')
Operational update
- Significant result on the Maiskaya Field, Block 70, Tomsk, Western Siberia
- Placing of 10,621,693 new ordinary shares to raise approximately £112 million
Imperial, the oil exploration and production company, today announces an operational update and a conditional placing on a non pre-emptive basis of 10,621,693 new ordinary shares of 2.5 pence per share ('Placing Shares'), (the 'Placing') to raise approximately £112 million before expenses. The Placing,
which has been fully underwritten by Hoare Govett Limited ('Hoare Govett'), will be the subject of an accelerated bookbuild and is conditional inter alia on the shareholders of the Company giving approval to the issue and allotment of the
Placing Shares at the Extraordinary General Meeting which has been convened for 5 June 2006. This is a significant issue of shares by the Company and represents an increase of 27.0 per cent. in the issued share capital of the Company. Imperial intends to utilise the net proceeds from the Placing to continue its production programme planned for 2006 and 2007, enabling it to achieve its upgraded target production of 25,000 Bopd by the end of 2008, as well as the continued exploration of Imperial's other prospects in Western
Siberia.
A letter from the Chairman of Imperial together with the Notice convening the Extraordinary General Meeting (the 'EGM') and Proxy Card will be posted to shareholders today.
Operational update
Imperial's 2006 drilling and exploration programme is achieving results ahead of expectations.
On 27 April 2006 it was announced that three of the new wells at Imperial's first producing field, Snezhnaya, Block 77, Tomsk, Western Siberia, had been successfully fracced, with the fourth due to be fracced later in May 2006. Initial flow rates are in line with expectations, complementing the three wells already producing. Block 77 early production is on track for 1,500 - 2,000 Bopd by the end of May 2006.
Imperial is today announcing a significant result from its new appraisal well Maiskaya 393. The well was spudded on 9 March 2006, on the Maiskaya Field, Block 70, Tomsk, Western Siberia and encountered some 11 metres of net pay with good porosity in the Upper Jurassic Vasyugan formation at a depth of between
2,652 to 2,665 metres. An open hole test on this section demonstrated production capability without any stimulation of 750 Bopd. Imperial is now planning a new horizontal well on the Maiskaya Vasyugan reservoir.
The Maiskaya 393 well has been deepened to evaluate the underlying Lower Tyumen reservoir, which was previously tested in Maiskaya 392. An open hole test on part of this section in Maiskaya 393 at a depth of between 2,952 to 3,004 metres successfully demonstrated production capability without any stimulation of 200 Bopd, confirming the presence of a better reservoir some 40 metres higher than in Maiskaya 392.
This reservoir will be stimulated by fraccing this coming winter which can be expected to substantially increase productivity in preparation for bringing the well into production in 2007.
These results enable Imperial to plan for early production to commence from the Maiskaya Field in 2007. Processing facilities and infrastructure will be constructed during the 2006 - 2007 winter. This field will then be connected to
Imperial's proposed 70km pipeline connecting its Aikagalskaya Field in Block 69 to the Transneft system which will enable production to commence in the second half of 2007.
Subject to results from the forthcoming appraisal drilling, early production from Aikagalskaya will follow a similar schedule. It is also planned to connect the producing Snezhnaya Field to the Transneft pipeline system by means of a
separate 40km pipeline. Both pipelines will commence construction in the 2006 - 2007 winter for completion by summer 2007.
With the addition of the programme for Maiskaya Field to its existing plans for the Snezhnaya and Aikagalskaya Fields, Imperial is upgrading its objectives so that it is now targeting production of 25,000 Bopd by the end of 2008.
Imperial is confident that it will be able to grow its already substantial reserve base. Acquisition during this winter of over 1,000 km of seismic over Imperial's acreage has now been completed. A total of 9 exploration wells are planned for 2007, each on new prospects in addition to the three new exploration prospects in this year's programme.
Purpose of the Placing
The Placing will in part fund Imperial's production programme planned for 2006 and 2007 as well as the continued exploration of Imperial's other prospects in Western Siberia.
The significant work involved in unlocking the potential of Imperial's asset base means that the Company's capital expenditure programme is now estimated to amount to approximately US$60 million for 2006 and approximately US$200 million in 2007.
The Placing proceeds will be utilised for the following purposes:
• further development and production well drilling of the Snezhnaya
Field;
• development of early production on the Aikagalskaya and Maiskaya Fields
including 3D seismic surveys, construction of processing facilities and infrastructure, and production well drilling;
• building of two new pipelines scheduled for completion in Summer 2007, one connecting Blocks 69 and 70 and the other connecting Block 77 to the Transneft system;
• fast track exploration of the newly acquired Block 80 including substantial 2D and 3D seismic acquisition and new drilling or re-entry of old wells;
• ongoing exploration and appraisal of Imperial's other substantial exploration acreage in the Tomsk region; and
• purchase of equipment to enhance production capability including fraccing, transportation and power generation for production rigs.
The Directors expect that the Placing proceeds will in due course be supplemented by debt finance. The Company is targeting to achieve material operational profitability in the year ended 31 December 2007.
Subject to the passing of the resolution at the EGM, the Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company including the right to receive all
dividends and distributions, declared, made or paid after the date of the issue.
If all the Placing Shares are issued and allotted the issued share capital of the Company will increase from 39,299,468 ordinary shares to 49,921,161 ordinary shares and the Placing Shares will represent approximately 21.3 per cent. of the
then enlarged share capital of the Company.
The Placing is also conditional on the admission of the Placing Shares to trading on AIM becoming effective by not later than 8.00 a.m. on 6 June 2006 or such later time as the Company and Hoare Govett agree, being in any event not
later than 14 June 2006.
Subject to the relevant approvals being given by the shareholders of the Company it is expected that admission of the Placing Shares to AIM will become effective and dealings in the Placing Shares will commence on 6 June 2006.
The Directors believe that raising finance by way of the Placing is the most appropriate method of funding the Company at the present time and is in the best interests of Shareholders as a whole. The Board considers that a general offer to existing shareholders by way of rights or other non pre-emptive issue is not appropriate at this stage of the Company's development due to the significant additional cost and delay incurred in the production of a prospectus.
Commenting, Peter Levine, Chief Executive and Chairman of Imperial said:
'We are very pleased with the encouraging initial production from Block 77 Snezhnaya and the excellent result from well 393, Maiskaya Field, Tomsk.
'We are now increasing by 25 per cent. our previously announced production objective for the end of 2008 to 25,000 Bopd.
'The placing proceeds will enable us to achieve the increased production target and help develop the great potential that remains in Imperial's other acreages.'
Date: 10 May 2006
Imperial Energy Corporation PLC +44(0)207 758 9658
Peter Levine +44 7802 312 249
Hoare Govett Limited +44 207 678 8000
Andrew Foster/Bertie Whitehead (Corporate Broking)
John MacGowan (Equity Syndication) +44 207 678 1084
Pelham PR
James Henderson +44(0)207 743 6673/+44(0)777 4444 163 |
