Acquisition of additional acreage in Paradox Basin
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.
11 January 2019
Rose Petroleum plc
("Rose", the "Company" or the "Group")
Acquisition of additional acreage in Paradox Basin
Rose Petroleum plc (AIM: ROSE), the AIM quoted natural resources business, is pleased to announce that the Company and Rockies Standard Oil Company ("RSOC"), its joint venture partner have successfully participated in the December 2018 Bureau of Land Management Utah lease sale. This resulted in the Company acquiring a 75% working interest in an additional 1,920 gross acres (1,260 net acres) (the "New Acreage") immediately adjoining its Gunnison Valley Unit ("GVU") acreage in the Paradox Basin, Utah, U.S.A.
The majority of the New Acreage, 1,600 of the total 1,920 gross acres, is covered by the existing 3D seismic data that the Company acquired in late 2017. This acreage purchase completes a targeted lease acquisition programme driven by the 3D seismic interpretation that has resulted in the capture of multiple high-ranked well locations in addition to those found within the initial GVU lease position.
Utilising a similar methodology to that of the Gaffney Cline & Associates ("GCA") Competent Person's Report (dated 30 April 2018), Rose estimates that the New Acreage has potential 2C Contingent Resources (net to Rose) of 1.2mmboe (million barrels of oil equivalent), within Clastic 21. This is in addition to the existing Clastic 21, GVU net 2C Contingent Resources estimate of 12.33 mmboe which was valued at a pre-tax NPV10 of US$122.4m, by GCA in 2018.
The New Acreage was acquired at a cost of $35,000 and an exceptionally low acquisition cost/net boe of US$0.03/boe.
Matthew Idiens, CEO, commented: "Following on from the very encouraging independent technical studies completed by both GCA and Schlumberger, this acquisition stands to add further high quality acreage at an exceptionally low entry cost. Rose estimates an NPV10 of approximately US$12m for the New Acreage, making this an excellent value add ahead of the Company's proposed drilling programme. I now believe that Rose has fully utilised its unique 3D dataset to build a high potential acreage position and to significantly de-risk the initial drilling locations. We are now focusing wholeheartedly on the main objective of financing the drilling programme."
Contacts:
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Rose Petroleum plc Matthew Idiens (CEO) Chris Eadie (CFO) |
Tel: +44 (0)20 7225 4595 Tel: +44 (0)20 7225 4599 |
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Allenby Capital Limited - AIM Nominated Adviser Jeremy Porter / James Reeve / Liz Kirchner
Cantor Fitzgerald Europe - Financial Adviser and Joint Broker Nick Tulloch David Porter
Turner Pope Investments - Joint Broker |
Tel: +44 (0)20 3328 5656
Tel: +44 (0)131 257 4634 Tel: +44 (0)20 7894 7686
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Andy Thacker
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Tel: +44 (0)20 3621 4120 |
Media enquiries:
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Allerton Communications |
Tel: +44 (0) 20 3633 1730 |
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Peter Curtain |
Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD, Technical Adviser 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.
Glossary
1C Low Estimate of Contingent Resources
2C Best Estimate of Contingent Resources
3C High Estimate of Contingent Resources
CONTINGENT RESOURCES
Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies.
Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status.
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 net acres in the prolific 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 Formation and has chosen the first well location and it is now permitted to drill and plans to commence the drilling programme and the first well as soon as possible, subject to rig availability, stipulations of the leases and financing. All of which should be achievable within the next few months.
On 22 June 2018, Rose announced a Competent Person's Report ("CPR") and Maiden Contingent Resource by Gaffney Cline & Associates ("GCA") on the Rose acreage covered by the 3D seismic, approximately 17,250 acres of the 80,000 acres held. The CPR estimated a 2C Contingent Resource, net to Rose, of 9.25 MMBbl of oil and 18.50 Bscf of gas, and an unrisked pre-tax Net Present Value (NPV10) on the 2C Resources, net to Rose, of US$122 million. The CPR focused solely on one single reservoir - the Cane Creek reservoir (the "CCR" or "Clastic 21") - of the multiple prospective reservoirs within the Paradox Formation.
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.
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