16 May 2014 07:00
Rose Petroleum plc
("Rose Petroleum" or the "Company")
Additional 35,000 acres in Paradox Basin, Emery County, Utah
Rose Petroleum plc (AIM: ROSE) is pleased to announce that it is adding an additional 35,000 acres in the western Paradox Block in Emery County to the 195,000 acres announced on the 17th of March.
The additional acreage is part of the farm-in agreement under which the Company's wholly-owned subsidiary Rose Petroleum (Utah) LLC ("Rose Utah") can acquire 75% of certain oil, gas and hydrocarbon leases in Grand and Emery Counties, Utah. This now brings the total acreage covered by the farm-in agreement to 230,000 acres. The additional leases are 10-year Federal leases being issued by the U.S. Bureau of Land Management (BLM) in the Paradox Basin. The leases were held by the same seller as the original 195,000 acres, but were withheld from the agreement as a result of an apparent accounting error by the BLM. This is now being rectified and the additional acreage will be added to the farm-in agreement.
The Agreement
Rose Utah is the designated operator and its 75% working interest in the oil, gas and hydrocarbon leases equates to approximately 172,500 acres net to Rose Utah, together with a 75% interest in one shut-in well (the "Project"). The Project targets two prolific unconventional shale resource plays, being the Mancos Shale in the Uinta Basin and Paradox Clastics in the Paradox Basin. There are multiple intervals within both formations with the potential for oil and gas.
Matthew Idiens, CEO, said, "With the total acreage now at 230,000 acres, covering both the Mancos and Paradox formations, Rose has the opportunity to become a significant player in the U.S. Oil & Gas Industry. The Resource evaluation report being compiled by Ryder Scott Company is being completed over the total 230,000 acres and we anticipate being in a position to announce this shortly."
Uinta Basin - Mancos Shale
The Cretaceous age Mancos Formation (the "Mancos" or the "Mancos Shale") is stratigraphically equivalent to the Niobrara Formation in northeast Colorado, as well as, the Eagle Ford Formation in south Texas, both of which are two of the largest unconventional shale resources plays in the world.
Immediately north of Rose's acreage, Anadarko Petroleum (NYSE: APC) owns 100,000 acres where it is also targeting the Mancos. The Mancos is also being developed south of the Rose's acreage in the San Juan Basin where EnCana Corporation (NYSE: ECA) and WPX Energy (NYSE: WPX), amongst others, have drilled over 60 Mancos wells and are producing over 20,000 BOPD (barrels of oil per day). EnCana and WPX both estimate individual well reserves in the Mancos at 500 to 550 MBO (thousand barrels of oil).
The immediate surrounding area to the Rose Utah's leases has numerous existing producing wells, several of which have been completed in the Mancos Formation as vertical wells with individual well cumulative production up to 120 MBO per well. The Rose leases afford the Company the opportunity to drill direct offsets to existing Mancos producing wells.
Paradox Basin - Cane Creek Shale
Rose Utah's leases are located 12 miles north of Fidelity Exploration and Production Company's ("Fidelity") Cane Creek Field, which Fidelity is currently developing. Fidelity is a wholly-owned subsidiary of MDU Resources Group, Inc. (NYSE: MDU). The Cane Creek Shale is a member of the Pennsylvanian age Paradox Formation. Within and adjacent to Fidelity's Cane Creek Field there are vertical Cane Creek wells that have produced over 1.0 MMBO (million barrels of oil) from individual vertical wells.
Fidelity's current drilling programme is regularly achieving initial production rates of over 1,000 BOPD with individual well reserve estimates as high as 1.5 MMBO per well. Fidelity's Cane Creek 12-1 well was among the best onshore wells drilled in the U.S. in 2012. It flowed at 1,500 BOPD for nine months and is still flowing at approximately 1,000 BOPD and has produced over 600 MBO to date. In 2013, Fidelity produced nearly 1.0 MMBO for the year from the Cane Creek Field.
There are 30 individual reservoir intervals in the Paradox Formation, of which the Cane Creek is only one. To date, Fidelity has focused its development on the Cane Creek interval, but it has been reported by Fidelity that it plans to initiate development of the other intervals this year having identified 10 additional intervals as prospective with anticipated reserves of 150 to 400 MBO per interval, per well.
All production and operational information in this announcement is provided from the public domain, the State of Utah or the respective operators.
For further information, please see the Company's website, www.rosepetroleum.com, or contact:
Rose Petroleum Plc +44 (0) 20 7225 4595
Matthew Idiens
CEO
Allenby Capital (Nominated Adviser & Broker) +44 (0) 20 3328 5656 Jeremy Porter / Alex Price
Lionsgate Communications (Public Relations) +44 (0) 20 3697 1209 Jonathan Charles / Lynn Carratt
John Blair (BSc Geology and MSc Geophysics), Head of New Ventures for Rose Petroleum plc, who meets the criteria of a qualified person under the AIM Rules - Note for Mining and Oil & Gas Companies, has reviewed and approved the technical information contained within this announcement.
About Rose Petroleum
Rose Petroleum plc (AIM Ticker: ROSE) is focusing on developing its oil and gas portfolio, whilst seeking to create value from its existing mining portfolio. In late 2013, Rose Petroleum raised additional capital and appointed John Blair as Head of New Ventures, and brought in an in-house technical team including geological and drilling expertise to pursue significant new oil and gas assets.
In January 2014, the Company announced that it had completed the acquisition of three licences in Germany, two licences in Baden-Württemberg covering approximately 635,000 acres (2,560 square kilometres) with each licence area represented to have at least four target pay zones, and the third licence covering 657,000 acres (2,640 square kilometres) located in the Weiden Basin (northeast Bavaria).
In March 2014, Rose signed a farm-in agreement under which its newly formed subsidiary, Rose Petroleum (Utah) LLC ("Rose Utah"), can earn 75% of certain oil, gas and hydrocarbon leases covering approximately 230,000 acres in Grand and Emery Counties, Utah, USA, within the Paradox and Uinta basins. Management intends to build on these projects to establish a balanced international asset portfolio.
For further information please consult the Company's website: www.rosepetroleum.com