LONDON (Alliance News) - Highlands Natural Resources PLC said Friday that its East Denver Niobrara shale oil and gas project in Colorado is now fully funded for six additional wells.
The USD5 million agreement allows Highlands to begin drilling next Thursday and will retain a 7.5% carried interest in all current and future East Denver wells.
The company's previously announced funding agreements will be replaced by this new structure. It will also receive a further USD430,492 in up-front cash. Highlands has divested 49.5% of its 57% working interest in the Wildhorse and Powell wells and will assign 49.5% of its 57% interest in future East Denver wells to True Rig #33.
According to Highlands, today's agreement paves a clear path to full field development of East Denver, starting with six new wells and potentially extending up to 24 total wells across the project.
Robert Price, chairman and chief executive officer, said: "This transaction facilitates the rapid development of our East Denver assets and establishes a long-term relationship with one of the most respected names in the American oil and gas industry. The carried interest received from True's rapid drilling plan will provide lasting cash flow and value to Highlands, and constitutes a strong financial base from which Highlands can advance an exciting portfolio of projects.
"Long-term investors will recall that True Rig #33 successfully drilled the entirety of our first two East Denver wells, Wildhorse and Powell in 2017. True's technical familiarity with the East Denver project and our successful history together was an important factor in Highlands' decision to partner with True for the long-term development of the East Denver asset," Price added.
Shares in Highlands closed Friday up 1.1% at 22.88 pence each.