Prep Work Back On Track at Imperial's SWDF

- Prep Work Back On Track at Imperial's SWDF

Tuesday, August 02, 2011
Imperial Resources Inc.

Imperial Resources announced that preparation work for bringing its Green Tide Salt Water Disposal Facility ("SWDF") back on line is on schedule.

• Green Tide has contracted a drilling consultant with over 30 years relevant experience to advise on drilling and completion operations;
• Appropriate contractors are being engaged for mud logging, directional work, casing the well, verifying good cement bonds, and all other necessary experts are scheduled to be on hand ready for rig arrival;
• Electrical power to the facility should be restored during the course of this week at which point the computer system that manages the surface plant will be tested and upgraded. During this period the pumps will be de-pickled and a number of the transfer pump actuators are likely to be upgraded. This and any other necessary work will be carried out in parallel with the wellbore deepening to ensure that the facility is brought back on line as soon as is practically possible;
• A marketing plan is being developed and sales staff identified so that Green Tide may commence disposal sales operations as soon as drilling operations on the well are completed.

The drilling rig is expected to arrive over the course of the next three weeks after release from prior commitments elsewhere.

The aim is to deepen the Green Tide SWDF well from 3,100 to 8,500 feet to establish the well around 400 feet to 600 feet into the Ellenburger formation. Casing will then be cemented between about 7,500 and 8,500 feet and the well drilled ahead to ideally create about 2,000 feet of open hole exposure in the Ellenburger so as to maximize disposal capacity. Subject to success, commercial operations will commence immediately targeting full disposal capacity of 15,000 barrels per day as quickly as possible. At full capacity, the Company believes the Green Tide SWDF has the potential to generate significant cash flow at relatively low operating costs.

The Green Tide SWDF

The Green Tide SWDF 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 Barnett wells within 20 miles of the SWDF.

Imperial plans to reopen Green Tide to dispose of up to 15,000 barrels of salt water a day. The Company's acquisition and development of the low run-time Green Tide assets and disposal permit is expected to save in excess of $5,000,000, compared to a new build cost.

Green Tide is one of two key projects identified as transformational for Imperial (the other being the Company's Oklahoma project).

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