TIDMHNR
RNS Number : 1146Q
Highlands Natural Resources PLC
04 June 2018
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
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MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE
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4 June 2018
Highlands Natural Resources plc ('Highlands' or 'the
Company')
Colorado shale projects update
Highlands, the London-listed natural resources company, is
pleased to provide an update on its Colorado-based shale oil and
gas projects.
At East Denver, surface casing for all six new wells has been
completed and the current stage of drilling is scheduled to
complete in towards the end of June. Supplementing this successful
project, Highlands has acquired a consolidated package of 2,490
acres of oil and gas leases to the west of Denver, Colorado where
the Company believes that up to 48 horizontal wells could be
drilled, subject to regulatory approvals.
East Denver Operational Update:
-- The current operational phase consists of drilling six
horizontal wells with a lateral length extending two miles along
the reservoir
-- The wells are named Buckskin 5-64-15-16-1BHZ, Grizzly
5-64-15-16-1CHZ, Ouray 5-64-15-16-1CHZ, Thunder 5-64-15-16-1CHZ,
Hagar 5-64-15-16-1CHZ and Citadel 5-64-15-16-1CHZ
-- The surface casing for all six new wells, has been drilled, cased, cemented and secured
-- The Highlands team is currently working on the lateral sections of the wells
-- The Buckskin well has been drilled to a total depth of 17,997
ft, and it has been cased, cemented and secured
-- Right after the Buckskin, the rig moved to the nearby Grizzly
well which is currently drilling the lateral section and is
expected to reach its total projected depth of 17,943 ft within the
next 24 hours
-- The Phase Two Drilling at East Denver is expected to be completed in towards the end of June
-- As previously announced in 2017, the combined initial
production rate for the first two wells at East Denver was 1,771
BOEPD and Highlands remains optimistic about the success of these
six new wells
West Denver Project Highlights:
-- The Company's experience, capability and execution evidenced
in the success at East Denver has led to the identification and
acquisition of these high-quality assets in West Denver
-- Up to 48 horizontal shale wells may be drilled, which is
double the scale of the entire East Denver project (subject to
regulatory and commercial approvals)
-- 100% working interest across 2,490 net acres with the
potential to increase the West Denver land position over time
-- Similar operational environment and development process to
the successful East Denver project, also located in the Denver
Julesburg Basin of Colorado
-- Total costs to date for the leases are US$50,000
Robert Price, Highlands' Chairman and CEO, said: "West Denver
will be a valuable addition to Highlands' core shale strategy,
which creates a growing foundation of cash flow from which the
Company will advance its other projects. Following on from our
success in our East Denver project, Highlands will aim to develop
West Denver with third party funding and create value for our
shareholders with our revenue generating assets and our upside
projects."
Advantageously Positioned for Development
The West Denver project benefits from several key advantages.
Most notably, Highlands' West Denver land position consists of
straightforward oil and gas leases as opposed to the several farm
outs that make up the East Denver project. Highlands has a direct
100% working interest in its West Denver assets and can develop the
asset as a direct owner of real property interests. West Denver's
surface area is also largely unencumbered by urban development, and
is consolidated into closely grouped parcels, which facilitates the
permitting and development process.
The West Denver asset also bears numerous similarities with East
Denver. The Niobrara formation shows prominently under the West
Denver acreage, but is joined by other attractive shale targets
including the Codell formation. West Denver is also ideally
situated for pad-based operations similar to the efficient
techniques employed by Highlands and its partners at East Denver.
Highlands believes that, like East Denver, the opportunity
presented by West Denver is suited to third party financing and
management will seek to maintain a significant carried interest
without dilution or capex burden for shareholders.
Highlands will begin the permitting process for West Denver,
with a view towards establishing drilling and spacing units,
wellbore density approvals, surface locations and drilling permits
in 2018 in advance of potential drilling activity in 2019. Similar
to East Denver, the West Denver project is expected to be primarily
oil-focused, but is also anticipated to generate condensate natural
gas liquids and natural gas as upside revenue stream
opportunities.
West Denver sits between numerous proven and productive oil and
gas fields in the broader Denver Julesburg Basin. To the north and
northeast is the Wattenburg Field, which produces prolifically from
thousands of Niobrara and Codell wells. To the south is the Soda
Lake field, which notably produced shale oil from a vertical well
completed without hydraulic fracturing. To the east is Highlands'
own East Denver project and the broader Lowry Bombing Range field.
The nearest productive well is located approximately one mile from
Highlands' West Denver acreage and demonstrates light oil in the
local reservoir with oil quality characteristics similar to East
Denver.
***ENDS***
For further information:
Highlands Natural Resources plc
Robert Price +1 (0) 303 322 1066
Cantor Fitzgerald Europe
Nick Tulloch +44 (0) 20 7894 7000
David Porter
Redleaf Communications
Elisabeth Cowell
Fiona Norman +44 (0) 20 3757 6880
Notes to Editors
Highlands (LSE: HNR.L) is a London-listed natural resources
company with a portfolio of high-potential oil, gas and helium
assets and technologies. The Company's core projects include:
-- West Denver Shale Project: A 2,490-acre shale oil and gas
project in the Denver Julesburg Basin where the Company aims to
utilize third-party financing to advance the project.
-- East Denver Niobrara: a horizontal oil and gas project
targeting the Niobrara shale formation in a well-studied area of
the Denver Julesburg Basin. Highlands retains a 7.5% carried
interest in the project, which is fully funded and operated by
Highlands' partners. East Denver is currently producing from two
wells, with six additional wells currently drilling, and up to 24
wells can be drilled in total.
-- DT Ultravert: a re-fracking and parent well protection
technology with four patents allowed and additional patents pending
in the United States and internationally. Highlands is advancing
commercial conversations with a range of oil and gas operators and
service providers to commercialize DT Ultravert technology,
potentially supported by its own 800-acre low-cost nitrogen
exploration project in Kansas.
-- Helios Two: a 220,000+ acre helium and natural gas prospect
in SE Montana with drilling and assessment operations ongoing.
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END
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