(Alliance News) - Rose Petroleum PLC has been granted approval to extend its acreage in the Paradox Basin in Utah, it said on Monday.
Rose has been granted two-year lease extensions by the US Bureau of Land Management on 11,300 acres, taking the total to 19,900 acres. Most of this is covered by 3D seismic data, Rose added.
The company now has a 75% stake in the extended acreage, instead of an earn-in, the previous situation at the project. There are no acquisition costs, it noted.
"With the project joint venture agreement successfully renegotiated, the project land position now restructured and an increase in term now secured, we are in a strong position to recommence our farm-in process," said Chief Executive Colin Harrington.
"The restructured project, combined with the increased focus that partners like the US Department of Energy are bringing to the Paradox Basin, will make the project more attractive to potential funding partners."
"While the company's immediate focus is to acquire near-term production in more mature Rocky Mountain Basins, the upside that can be delivered from our Paradox project makes it a highly attractive investment opportunity and ensures the project will remain a central part of company's future focus and activity."
Elsewhere, Rose is currently in the process of buying a 10% stake in the McCoy lease on the Denver-Julesberg Basin in Colorado. In November, Rose announced the purchase from Capitva Energy Holdings II LLC of the 10% stake, and it has an option for a further 80%.
Rose said Captiva Energy has now signed a lease amendment allowing drilling of wells across the lease.
Rose is now in "substantive" discussions with third parties over securing necessary funding for drilling of the Margil drilling spacing unit.
"These are exciting times for the company as we look to complete the acquisition and move closer to our goal of becoming an oil producer in the near term," said Harrington.
We are very pleased to report on Captiva Energy's successful conclusion of lease amendment negotiations, and we welcome the opportunity to benefit from the expertise and investment that Great Western Operating Co will bring as operator of the drilling spacing unit. Captiva Energy and Great Western's progress to date demonstrates the value that strong, basin-focused partners can add."
"We are confident of robust economic returns from these two-mile lateral horizontal wells, and upon completion of the acquisition we look forward to participating in the proposed drilling programme as working interest owners alongside Captiva Energy and Great Western."
Rose Petroleum shares were 7.5% higher on Monday in London at a price of 1.10 pence each.
By George Collard; georgecollard@alliancenews.com
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