(BW) Imperial Petroleum Signs Biodiesel Deal

(BW) Imperial Petroleum Signs Biodiesel Deal
Houston Chronicle - United States
... OTCBB:IPTM) announced today that it has signed a Letter of Intent with Domestic Energy Partners ("DEP") of Spanish Fork, Utah to market biodiesel to petroleum

EVANSVILLE, Ind.--(BUSINESS WIRE)--May 19, 2006--Imperial Petroleum, Inc. ("Imperial" or the "Company")(OTCBB:IPTM) announced today that it has signed a Letter of Intent with Domestic Energy Partners ("DEP") of Spanish Fork, Utah to market biodiesel to petroleum refineries and other end users. Imperial's subsidiary, Hoosier Biodiesel Company, will sell up to 25 million gallons annually of biodiesel products manufactured by DEP using its proprietary process. Under the terms of the Agreement, which is subject to completion of a Definitive Agreement, Hoosier Biodiesel Company will reserve a delivery commitment of up to 25 million gallons annually from DEP, with the right to increase its commitment to 100 million gallons annually, with the payment of $2.5 million in cash and 1.5 million shares of IPTM stock. DEP will carry a non-recourse note for the balance of the biodiesel commitment that is convertible into IPTM stock at a price of $3.60 per share after giving effect to proposed four-for-one reverse split of the stock. In addition, Hoosier Biodiesel Company will have the right to construct one or more plants using the DEP process in the Midwest, and biodiesel sold from those plants will offset any volume delivery commitments between the parties.

The process developed by DEP is environmentally friendly, requires substantially less equipment and space than the traditional biodiesel manufacturing plants and is more cost effective. DEP is currently in production and has been using its own product for the last several years in its fleet of diesel cars. Hoosier Biodiesel Company expects its margins to be about $0.40 per gallon of product sold. The parties anticipate closing in July 2006 with first sales expected in October 2006.