Companies: IEC   

Following Russian environmental watchdog Oleg Mitvol’s threat to Imperial Energy’s Siberian licences, the company is still seeking ‘clarification’.

AIM-quoted Imperial, whose prospects in the Tomsk region of western Siberia had won it growth stock status, has reacted with pained incomprehension to the statement by Mitvol, deputy head of Russia’s Rosprirodnadzor environmental agency, that he would recommend its licences should be withdrawn.

Only this week, the company received an Act of Confirmation from the Russian Ministry of Natural Resources that it had fulfilled its obligations on the licences, which it won by auction in 2003 and 2004, outbidding such powerful local heavyweights as Gazprom and the Anglo-Russian giant TNK-BP.

Mitvol, who has already made a name for himself by taking similar swipes at Shell and Peter Hambro Mining, has alleged ‘enormous discrepancies’ in the reserves Imperial reported to the Russian authorities and those it reported to investors, namely some 800 million barrels in the ‘P2’ category. Imperial replied that the Russian reserves definition is ‘more stringent and therefore lower’ than what the company’s auditor, DeGolyer and MacNaughton, would use.

Imperial said it has received no written complaint from the Ministry of Natural Resources and ‘is seeking clarification on these matters’. Chairman Peter Levine insisted ‘the group’s conduct since commencing operations in Russia has been exemplary.

‘Last year alone we invested more than £75 million in the Tomsk region and this year we are planning a further £120 million investment. We are confident they will be resolved in the near future.’

Floated at 25p three years ago and recommended by Growth Company Investor at 415p in 2005, Imperial shares hit £15.10p earlier this month, after GCI had suggested partial profit taking at £11.97p. The shares are 145p down today at £10.92p, valuing the company at £560 million.

Broker Bridgewell suggested this is a buying opportunity, pointing out how Peter Hambro rallied after its own Mitvol-induced fall. The shares are likely to be volatile in the short term.

Imperial Energy Corporation	LSE	£1011.69m	989.50p	-5.50p
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Other company articles:
Indian group bids for Imperial Energy			26/08/2008
Bid approach for Imperial Energy			14/07/2008
Price strength persists			28/04/2008
Imperial seeks Russian 'clarification'			19/04/2007
Robert Tyerman’s Exploration Insights			29/03/2007