Projects
The operational team have excellent access to projects suitable for Imperial across continental North America. These assets are available for many reasons; they may be considered too small for the Oil Majors, poorly developed by the existing operator, or in need of partners in a capital starved environment who can also contribute high level expertise.
Imperial is able to bring to bear its considerable reservoir development and land acquisition expertise on these assets to transform them from under-performing to outstanding developments.
Existing operators benefit by partnering with Imperial expertise and finance or even whole divestment of non-core assets to Imperial.
Imperial currently has a producing project in Texas, a 14.9% working interest in the Cochran #1 well, operated by the El Paso Corporation, in Colorado County, Texas.
Imperial is already well advanced in securing the Chisholm Trail (potential “Company Maker”) and the Salt Water Disposal Project (“low risk, cash cow”) opportunities, subject to funding and a number of other substantial pipeline opportunities are available to Imperial and are under evaluation.
Management
In line with Imperial Resources’ cost-effective model management is split across Imperial Resources and Imperial, enabling Imperial Resources to minimise its corporate overhead. Vital to Imperial Resources is the largely performance based reward system for its key oil and gas orientated operational management contained within Imperial.
Imperial Resources, Inc. Management
Robert R. Durbin – CEO, Imperial Resources and Imperial.
Mr. Durbin as an attorney who practices exclusively in oil and gas has acted in a General Counsel capacity to several oil and gas exploration and production companies and related service companies. He has used his technical undergraduate background to litigate hundreds of cases to successful conclusions. He has drafted and reviewed thousands of transactions for many energy companies, except from 2002 through 2003 when he was General Counsel and Vice President of Star of Texas Energy Services, Inc. Prior to that Mr. Durbin practiced primarily oil and gas law at his own firm (1987-2002), was Adjunct Professor, Southwestern Professional Institute (1998-2002) and regional manager at APL Services, Inc. (1979-1986).
Mike Mackey – CFO, Imperial Resources
Mr. Mike Mackey is assigned as CFO for the Company, including assisting the Company with operational and public reporting requirements, oversight and guidance of finance and accounting matters, and such other assistance as needed by the Company’s finance and accounting team.
Previously, Mr. Mackey was with Ascent Synergy Solutions as the Principal and Founder. His consulting firm focused on companies, typically in the technology, services or consulting markets, needing guidance and assistance at both a strategic and tactical level to realize their strategy and projections. Prior to Ascent Synergy Solutions, Mr. Mackey was the President, COO and Founder of Empyrean Benefit Solutions. He was responsible for recruiting a high caliber management team to assist in the formation of the company that included designing and implementing the operational, accounting and administrative infrastructure. Prior to Empyrean Benefit Solutions, Mr. Mackey was the CFO and EVP Finance & Administration for Synhrgy HR Technologies and FastWeb.com. Prior to FastWeb.com, Mr. Mackey was the CFO, EVP Finance & Administration for DA Consulting Group. He played a critical role in evaluation and selection of underwriters, drafting of prospectus, strenuous international road show and successful $34.5 million Initial Public Offering. Prior to DA Consulting Group, he was the CFO, EVP Finance & Administration for Global Software and was instrumental in a complex spin-off from a publicly traded company. Mr. Mackey has also worked for MicroAge Computer as CFO, Kirchman Corporation as a Lead Financial Analyst, PricewaterhouseCoopers as an Auditor and Lockheed Martin as a Lead Financial Analyst. Mr. Mackey received his BS in Accounting from the University of Florida, Gainesville, and his MS in Accounting & MBA from the University of Central Florida, Orlando.
Imperial Oil and Gas, Inc. Significant Contractors
Eugene G. Lawley, III – Land Manager
Mr. Lawley is an attorney by trade who is licensed in Texas and Mississippi. He has practiced exclusively in the oil and gas industry for the past 29 years. For the most recent 10 years his practice has been focused primarily on Title Examination and Land Management. Prior to that time he has practiced in those areas as well as Securities Transactions, Broker/Dealer registrations and compliance and was General Counsel for Trilogy Oil Corporation from 1984-1987. He has worked with major energy corporations, including Shell, Chevron, Exxon & Mitchell Energy, to develop land acquisition strategies and supervised as many as 20 Landmen toward achieving those goals.
Richard C. McPherson, RCM Inc. – Independent Evaluator
Mr. McPherson is a member of the Society of Petroleum Engineers and is a Registered Professional Engineer in Texas. He is President of RCM Engineering, Inc. and co-founder, Vice President, and Chief Operating Officer of McDay Energy Corporation. He is a graduate of Texas Tech University (1975) with a B.S. degree in Chemical Engineering. He has worked for El Paso Natural Gas Co., and in 1978 became the Area Drilling Engineer for Good Hope Refineries, Inc. in Laredo, Texas. His duties at Laredo included engineering support for ten drilling and workover rigs, well evaluations, plugging recommendations, compressor designs, and operations of 350+ wells. Since 1981, Mr. McPherson has been an independent petroleum consultant, and in 1985 formed RCM Engineering, Inc. He has also owned and operated a well servicing company operating in West Texas and as an independent consultant has extensive experience drilling, completing, and operating wells ranging from shallow (300’) pumping oil wells to deep (20000’+) high pressure gas wells. Mr. McPherson has also conducted reservoir evaluations for public and private oil and gas companies as well as for several lending institutions.
Imperial is already well advanced in securing the Chisholm Trail (potential “Company Maker”) and the Salt Water Disposal Project (“low risk, cash cow”) opportunities, subject to funding.
Additionally Imperial has access, via an extensive industry contact network throughout the onshore US, to numerous opportunities, including off market and pre market offers. These are scanned on an almost daily basis.
Imperial has in-house Oil and Gas legal services and contracted in land leasing and acquisition expertise to rapidly evaluate opportunities identified.
Projects which appear to fall within the company’s strict criteria are filtered through extensive due diligence. Once filtered all projects subjected to confirmatory independent third party validation and report prior to selection.
Salt Water Disposal Project
Imperial is currently re-negotiating a contract to acquire a majority participation interest in a supremely located Salt Water Disposal Well.
All wells in the Barnett Shale (the biggest gas producing structure in Texas) must be fractured (“Frac’ed”) to produce. After the frac treatment, the water used in the frac is pushed back up to the surface by the gas. The well produces this frac water for years after the well is frac’ed. The frac water picks up salt and other contaminants whilst in the ground. These, combined with the chemicals added prior to the frac, require that the water be disposed of in a safe and ecological manner, the most efficient way being by disposing back into the ground into a naturally salty water formation via a salt water disposal well.
The Salt Water Disposal Project facility provides this very solution in the heart of the Barnett Shale.
Previous owners spent $5.5m building the Salt Water Disposal Well facility and then attempted to operate using a shallow well. Due to the injection into a shallow formation, the operator of a nearby gas well alleged that the well affected his well’s performance and operations were halted by the Texas Railroad Commission. The Railroad Commission, recognizing that the approved facility had a vast amount of capital already expended, approved it to continue operations into a deeper formation, the Ellenberger along with a greater capacity.
The Ellenberger is the favoured formation for disposal purposes in this part of Texas as it is separated by thousands of feet of rock from any fresh water bearing formations. A subsequent lack of funds required to deepen the well to the Ellenberger has provided this opportunity to Imperial. The Imperial plan is to deepen the existing well to the approved depth and re-open the facility. It is also Imperial strategy to secure contracts with the water hauling companies to assure itself of success on a monthly basis and consistent cash flow. Once operations have been proven successful, Imperial will request that the Commission increase the daily rate permit, which is expected to be granted administratively.
Highlights
The Salt Water Disposal Project is the very best located disposal well in the area being the closest disposal facility to the “historical core area” of the Barnett Shale i.e. the area of the Barnett with the largest concentration of wells. The Barnett Shall is the largest gas field in Texas. There are approximately 7,000 wells producing contaminated water within a 30 mile radius, which will continue to produce water for many years to come;
Barnett Shale gas wells flow back contaminated fracture water for years, producing a constant and known demand for disposal;
One of the most cost effective ways to increase production on a Barnett Shale gas well that has depleted is to re-frac, starting the entire production cycle over again as well as the entire water disposal cycle over as well;
Perpetual license to dispose of 15,000 barrels (current prices between $0.45 and $0.60 per barrel) of contaminated water per day with a strong possibility to increase to 30,000 per day after 6 months of operations;
Estimated to generate over $300,000 per month gross to Imperial after year 2 with early cashflow increasing up to that amount during the proceeding months;
New competition unlikely due to environmental barriers to obtain waste disposal licenses and current competition at full capacity despite being relatively remote from the main producing wells;
Effectively unlimited total volume disposal capacity, virtual perpetual asset;
Surface Facility already complete, including pumps, tanks, separation units, turning lanes into the facility. Everything is ready to go upon the well being deepened into the Ellenberger formation depth, a massive 2,000 thousand feet thick formation capable of sustaining constant input of huge amounts of disposal water without contamination risk to other oil and gas producing formations;
Experienced personnel still available and ready to go back to work;
Large acreage surrounding facility for value added services: truck parking close to the field, pipe yard, etc.;
Immediate Imperial valuation uplift on completion: highly desirable business in best location in field, $5.5m invested to date by previous owners;
Significant oil sales income from oil recovered from the disposal water in addition to disposal fees.