Imperial Resources Inc. (OTCBB: IPRC) has reported that its wholly-owned subsidiary, Imperial Oil & Gas Inc., entered into an agreement to acquire 100% of a salt water disposal project, located in the heart of the Barnett Shale, the largest gas play by number of wells, in Texas.

"I am delighted that the company has managed to acquire all of this salt water disposal facility, which is second only to the Oklahoma project in economic importance to the company," said Tom Barr, director.

The Facility

The facility is a unique, very low risk opportunity, conveniently located for the disposal of large volumes of salt water generated from essential fracture stimulation operations on Barnett Shale gas wells, some of which have been fraced up to four times. There are approximately 6,000 wells within 20 miles of the facility.

The facility is one of two key projects identified as transformational for Imperial (the other being the company's Oklahoma project) and consists of a proven, fully built surface plant (consisting of tanks, pumps, control systems, access road, offloading pad and all ancillary equipment) within a compound located on approximately 41 acres of freehold land by a State highway, and an existing disposal well bore. The facility has a permit for the disposal of up to 15,000 barrels of salt water per day, conditional upon deepening the well into the Ellenberger formation. Environmental lobby resistance to new disposal permitting means the permit has considerable value as they are now slow and expensive to obtain. The initial investment in the facility by its original owner is estimated by the company to be in excess of $5,000,000.

The Imperial plan is to deepen the well to a depth currently approved by the Texas Railroad Commission and reopen the facility to dispose of up to 15,000 barrels of salt water a day. Disposal rates in the area range from approximately $0.40 to $0.60 per barrel of water, even at less attractive, generally more distant facilities. In addition to disposal revenues the company expects to benefit from materially additional revenues generated by the facility from the recovery and re-sale of oil contained in frac water. Facility operating costs are expected at around $30,000 per month, resulting in an estimated operating break even point of only 2,225 barrels of water per day, even assuming low end $0.45 per barrel disposal rates and excluding any recovered oil revenues.

The total development cost to Imperial to bring the facility on stream is expected to be around $1,200,000. If it can be brought back on line as the company expects, the company anticipates that capital value of the facility will be very considerably uplifted, in addition to the ongoing, non-depleting cashflow the Company expects to generate from it, month on month.