Continuing its quest to purchase oil and gas leases across the Midcontinent, junior independent Imperial Petroleum Inc. signed a letter of intent this week to acquire a 50% interest in 17,700 acres of leases in the Arkoma Basin. Many of the identified prospects are located near existing natural gas pipelines.

The Evansville, IN-based producer said the leases include five operated wells and 14 non-operated wells in eastern Oklahoma and southwestern Arkansas. It did not disclose a purchase price, and said the closing would be subject to negotiation of a definitive agreement.

“In the development of Imperial, we have been seeking a project of this nature to provide the type of upside available in owning and operating a significant exploration position in an area as prolific as the Arkoma Basin,” said Jeffrey T. Wilson, president.

Imperial has identified about 25 natural gas prospects that have been developed on the acreage, based on well control and 2-D seismic at depths less than 5,000 feet. In addition, there is approximately 600 Mcf/d of existing production in the package, including two wells that are now being tied into a pipeline. Approximately 80% of the leases are paid up until 2008, the company said.

Imperial in January completed the purchase of the oil and gas assets of Warrior Resources Inc. and Hillside Oil & Gas LLC for $11.96 million (see Daily GPI, July 15, 2003). The acquisition made Imperial the operator of about 146 wells in Louisiana, Mississippi, New Mexico and Texas and another 230 royalty properties in several states, which together were producing an estimated 1.5 MMcf/d and 280 bbl/d.

The company last year also completed the acquisition of about 63.3% of the capital stock of Powder River Basin Gas Corp., giving it a focus on coalbed methane production (see Daily GPI, May 14, 2003).

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.