(Alliance News) - Rose Petroleum PLC on Monday said it has amended its joint venture agreement for the Paradox oil project which will lower overall cost of maintaining the project and gives the company ownership of the highest-potential acreage.
The oil & gas company has negotiated a new agreement with its partner, Rockies Standard Oil Corp, for their project in the Paradox basin of US state of Utah.
Under the agreement, Rose Petroleum will focus on a potentially highly economic core acreage position of 12,920 acres which contains 21 high-priority drilling targets and estimated 2C contingent recoverable resources, net to Rose, of 8.3 million barrels of oil equivalent.
The acreage represents an estimated post-tax net present value to Rose Petroleum of USD59 million, a significant premium to the company's current stock market capitalisation of USD2.5 million.
Rose Petroleum shares were up 2.1% at 1.48 pence each in London on Monday morning.
The company also said that it continues to work with the US Department of Energy and Utah University on a study related to improving production and raising the profile of oil drilling in the northern Paradox Basin. Subject to contract, Rose Petroleum may be eligible for a significant funding grant.
"The newly structured project sits squarely within this strategic vision and the Board looks forward to adding additional projects to the portfolio in the short-term," Rose Petroleum said.
By Tapan Panchal; tapanpanchal@alliancenews.com
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