Imperial Oil to divest certain Alberta assets

Imperial Oil Resources has initiated a process to divest certain of its assets in the Medicine Hat area (Redcliff-Schuler) in Alberta, and has retained Scotia Waterous as its exclusive financial advisor to assist in this process. The Redcliff-Schuler offering represents an opportunity to buy conventional, long-life shallow gas production.

Offering Highlights:
Redcliff area overview:
-- 88% working interest in the Redcliff producing assets
-- Raw production of 3.2 MMcf/d as of January 2011; 100% of production is operated
-- Partners include Enerplus, ConcoPhillips Canada Energy Partnership and the City of Medicine Hat Gas Department
-- Main producing formations include the Cretaceous Medicine Hat and Second White Speckled Shale (shallow depth of ~600 mKB)
-- Potential to capture incremental gas with low cost infill drilling locations
-- Majority of Redcliff leases are developed with 4 to 6 wells/section; Nearby operators (Cenovus and Direct Energy) have drilled up to 16 wells/section
-- Imperial Oil has extensive infrastructure in the area; Operated with a 100% ownership in two compressors; Gas does not require processing beyond dehydration and compression; Custody transfer at the compressors.

Schuler area overview:
-- 100% working interest in the Schuler Medicine Hat Gas Unit
-- Raw production of 2.7 MMcf/d as of January 2011; 100% of production is operated
-- Unitized formation - Cretaceous Medicine Hat (shallow depth of ~ 600 mKB)
-- Includes interests in non-unitized formations on a portion of the lands
-- Potential to capture incremental gas with low cost infill drilling locations
-- Majority of Schuler leases are developed with 4 to 6 wells/section; No Unit drilling activity since 2007
-- Offset operators (Direct Energy, Enerplus and Nexen) have drilled up to 16 wells/section; Extensive infill drilling by other operators in the area in 2008-2009
-- Production is pipelined to Direct Energy’s compressor and dehydrator at 13-07-016- 01W4; Custody transfer meter upstream from the compressor