TIDMROSE
RNS Number : 4848L
Rose Petroleum PLC
19 April 2018
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR"). With the publication of this announcement,
this information is now considered to be in the public domain.
19 April 2018
Rose Petroleum plc
("Rose", the "Company" or the "Group")
Update on operations in Paradox Basin, Utah, U.S.A.
Rose Petroleum plc (AIM: ROSE), the AIM quoted natural resources
business, is pleased to provide an update on operational progress
on its project in the Paradox Basin, Utah, U.S.A. ("Paradox
Basin"). Following the acquisition of additional acreage earlier
this month (the "new acreage"), the Company continues to earn into
a 75% working interest in a total of approximately 80,000 acres in
the Paradox Basin. Activity on the ground continues apace, and the
Company is aiming to drill its first well later this year.
The Company has assembled a highly experienced subsurface and
surface operational team with extensive experience and a successful
track record in the Paradox Basin. The team designed, managed and
implemented a nine-well drilling programme in the Paradox Basin
directly to the south of Rose's acreage. Eight of these wells were
commercial and production grew from circa 100 barrels of oil per
day ("BOPD") to over 3,500 BOPD.
The operational team has now largely completed the subsurface
assessment, well location selection and basic well design and
engineering for the Company's first proposed horizontal well, the
GVU 29-1. The Application for Permit to Drill ("APD") process for
GVU 29-1 is well underway. The Notice of Staking, which is the
first requirement for the APD, was lodged and accepted by the
Bureau of Land Management ("BLM") earlier this month and the
Company is currently preparing for the onsite inspection of the
proposed well location with the BLM, which is due to take place
imminently. It is currently expected that the APD will be granted
in Q3 2018, which will permit the Company to commence drilling
operations soon thereafter.
Following the completion of the first phase of the well design
work, the new operational team has also completed time/cost
estimates for the initial well. It is currently expected that the
total cost of the well (including completion, testing and tie-in
costs) will be in the range of US$7-8 million, which is well below
our previous budgeted forecast of US$8-10 million. We would also
expect this to be even lower during the development phase as
operations increase. Discussions with industry and financial
partners to fund the drilling programme are underway and, as
previously announced, the Board is committed to avoiding dilution
to existing shareholders wherever possible.
The Company has now identified approximately 60 potential well
locations on both its existing and new acreage within the area
covered by the Company's 3D seismic survey that was completed in
2017. By applying a similar methodology to the Ryder Scott
Company's 2014 Competent Persons Report ("CPR") and as per SPE-PRMS
standards and definitions, Rose's management estimates that, within
the acreage covered by the 3D seismic, there is the potential to be
unrisked prospective resources of circa 38 million barrels of oil
equivalent ("MMBOE") in the Cane Creek reservoir ("Clastic 21")
alone. The Paradox Basin formation is made up of approximately 24
clastic zones, of which Clastic 21 is the primary producing zone of
the basin to date. Additional potential clastic reservoir zones
also exist, both above and below the Clastic 21. These were also
assessed as prospective in the CPR and add further potential both
within the 3D seismic covered area (which represents only 15,000
acres of the 80,000 acres over which the Company has a working
interest) and the area outside.
The prospectivity of Rose's acreage is underpinned by the
existence of the producing 28-11 well which is only 365 metres to
the west of the new acreage. The 28-11 was drilled in 2006 by Delta
Petroleum and has produced 141,000 BOE from Clastic 21. These
factors give management a high degree of confidence in the
potential of Rose's acreage and, as a result, it has been decided
to also proceed with the permitting of a second well location in
the new acreage, the 22-1 well. The 22-1 would be a horizontal well
which Rose's management consider has an Estimated Ultimate Recovery
("EUR") of 894,000 barrels of oil equivalent ("BOE").
Given the recent completion of the 3D seismic survey and the
acquisition of the new acreage, the Company is now in the process
of updating the CPR to ensure it accurately reflects the current
position.
The Company is pleased to announce that it will exhibit and
present at the 2018 UK Investor Show
(https://www.ukinvestorshow.com) in London on Saturday, 21(st)
April 2018. The Company will be at stand 43 at the conference in
the Queen Elizabeth II Centre, Broad Sanctuary, Westminster,
London, SW1P 3EE.
Matthew Idiens, CEO, commented: "I am delighted that we've been
able to assemble such a capable operational team, with an
impressive track record of success in the basin. Significant cost
savings have already been identified in the well design and further
savings are expected.
"We continue to make excellent progress on the ground and are
preparing to drill our first appraisal well before the end of 2018,
which will be a key milestone for Rose."
Glossary
Estimated Ultimate Recovery: Estimated Ultimate Recovery (EUR)
is defined as those quantities of petroleum which are estimated, on
a given date, to be potentially recoverable from an accumulation,
plus those quantities already produced therefrom.
SPE-PRMS: the standards and definitions of the SPE-PRMS as
published by the Society of Petroleum Engineers, the American
Association of Petroleum Geologists, the World Petroleum Council
and the Society of Petroleum Evaluation Engineers in 2007
Unrisked prospective resources: Prospective Resources are those
quantities of petroleum which are estimated, on a given date, to be
potentially recoverable from undiscovered accumulations
Enquiries:
Rose Petroleum Tel: +44 (0)
plc 20 7225 4595
Matthew Idiens (CEO) Tel: +44 (0)
Chris Eadie (CFO) 20 7225 4599
Jeremy Porter / James Allenby Capital Tel: +44 (0)
Reeve / Liz Kirchner Limited 20 3328 5656
Andy Thacker Turner Pope Tel: +44 (0)20
Investments 3621 4120
Media enquiries:
Allerton Communications Tel: +44 (0) 20 3633
1730
Peter Curtain peter.curtain@allertoncomms.co.uk
-------------- ------------------------ -----------------------------------
Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD,
Technical Advisor to the board of Rose Petroleum plc, who meets the
criteria of a qualified person under the AIM Note for Mining and
Oil & Gas Companies - June 2009, has reviewed and approved the
technical information contained within this announcement.
Notes to editors
Rose Petroleum plc (http://rosepetroleum.com) is a North
America-focused oil and gas company whose primary asset is
approximately 80,000 acres in the oil and gas producing Paradox
Basin in Utah, U.S.A., where it is earning-into a 75% working
interest. Using high-quality data gathered in a 3D seismic survey
completed in October 2017, the Company has identified drilling
locations in naturally fractured areas of the Paradox clastics
formation with the intention of commencing a drilling programme in
H2 2018, once necessary permits and funding have been secured.
The Company's established management is supported by an expert
technical team with extensive experience of the basin, where
current operations nearby have proven successful, with significant
initial production rates and low decline rates, offering strong
economics even in the present oil price environment.
The Company's strategy is to grow both organically and through
acquisition, identifying additional hydrocarbon assets,
conventional or unconventional, that would benefit from the
Company's fast-acting, entrepreneurial approach.
Rose Petroleum has been quoted on AIM since June 2004.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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