25 Apr 2016 07:49
25 April 2016
Highlands Natural Resources plc ('Highlands' or 'the Company')
Corporate Update
Highlands, the London listed oil and gas company, is pleased to provide a corporate update including the significant progress it has made with regards to the implementation and commercialisation of DT Ultravert refracking technology, of which it owns 75% of the patent filings; the acquisition of acreage which includes the shallow natural gas Gravity Prospect in North Dakota; and a natural gas and potentially significant helium play in the US; and an update on its Ticaboo Minerals Uranium Project in Utah.
Overview
· DT Ultravert Commercial Tests
o Highlands and Schlumberger are in on-going discussions with over 20 exploration and production companies in the US to commercialise DT Ultravert, a diverter technology of which Highlands owns 75% of the patent filings, which enhances well output at a fraction of the cost of drilling a new well
o Discussions relate to acquiring refrac candidate wells in the Piceance Basin, the Denver-Julesburg Basin, the Appalachian Basin, the Williston Basin and the Permian Basin
o The first commercial tests are planned for June 2016 in the Piceance Basin, Colorado
· Acquisition of the Gravity Prospect, North Dakota
o Acquired ~1,972 acres in November 2015 targeting the Niobrara and Muddy formations in Emmons county, North Dakota which includes the shallow natural gas prospect, "Gravity"
o In discussions to acquire and complete a well on the acreage from Strata-X
o The cost to complete the well will be approximately 50,000 US$
o Targeting to complete the well by mid-June 2016 following acquisition and an extended production test thereafter
· Helium Prospect, USA
o Currently evaluating a potential natural gas with associated helium play in the US from an economical and geological standpoint
o The helium concentration of the target region is similar to the US Hugoton Field
o Highlands is in discussions with parties for acquiring such natural gas and helium rights
· In Situ Solution Mining Prospect, Utah
o Currently in discussions with mining corporations for joint development of mining claims purchased in March 2016 covering ~1,219 acres in Grand County, Utah
o Oil well logs in the mining claims indicate potential high concentrations of uranium
o Highlands plans to pursue in-situ mining techniques to develop the uranium
Highlands CEO Robert Price said, "This is a truly transformational time for Highlands, demonstrated by the significant advancements we have made towards commercialising DT Ultravert as well as the potentially game-changing acquisitions we have made in the gas, helium and uranium sectors. We are incredibly excited to be commencing our first commercial tests of DT Ultravert in the Piceance Basin in June 2016 with the aim of proving that this technology, of which we own 75%, could provide a breakthrough in the industry, particularly in the current oil price environment.
"The Gravity Prospect and Helium Prospect, which have significant gas and helium potential, add another dimension to our portfolio and we are eager to determine the prospectivity of both the prospects in the near future. Coupled with our search for JV partners to unlock the potential value of our uranium asset in Utah via in-situ mining techniques, the months ahead are going to be filled with activity and we look forward to providing further updates as soon as possible."
Further Information
DT Ultravert
In 2015, Highlands acquired an interest in 75 per cent. of certain patent and know how rights associated with 'DT Ultravert', a well stimulation (fracking) diverter technology, from Diversion Technologies LLC ('Diversion'). DT Ultravert diverter technology enhances well output by directing hydraulic fracturing fluids to unstimulated portions of the formation, thus releasing previously unrecoverable hydrocarbons at a fraction of the cost of drilling a new well. In September 2015, Highlands and Schlumberger entered into an indicative terms agreement to test and evaluate the technology. London based RPS Knowledge Reservoir evaluated the technology and concluded that DT Ultravert, "has an ability to provide the industry with a revolutionary change in the way certain wells are stimulated." RPS Knowledge Reservoir estimates that DT Ultravert has an NPV (10.5%) value of US$58.3 million.
Highlands and Schlumberger are in on-going discussions with over 20 exploration and production companies to commercialise DT Ultravert in the US. These discussions are with regards to acquiring refrac candidate wells in the Piceance Basin, the Denver-Julesburg Basin, the Appalachian Basin, the Williston Basin and the Permian Basin. The first commercial tests are planned for June 2016 in the Piceance Basin and Highlands will make a further announcement when the results of those tests are made available to it.
Gravity Prospect, Emmons County, North Dakota
In November last year, the Company acquired approximately 1,972 net acres for US$19,728 on a shallow natural gas prospect targeting both the Niobrara and Muddy formations of Emmons County, North Dakota. Highlands is now in discussions to acquire and complete a well from Strata-X. Whislt there can be no certainty that these discussions will be successful, the Company expects that the cost to complete the well would be approximately 50,000 US$. Highlands is targeting completion of the well by mid-June 2016, subject to concluding the acquisition. The target formations in the well are relatively shallow beginning at 1,300 feet. The Company plans to perform an extended test on the Niobrara formation for both gas and water production to define rates and gas-to-water ratio behaviour over the test period. Highlands expects high initial water production and believes that over the test period, gas will climb to commercial rates.
Helium Prospect, USA
Consistent with the Company's strategy to evaluate potential value adding acquisitions, Highlands is currently examining a potential natural gas and helium play in the US from an economical and geological standpoint.
Numerous shows of gas have been encountered across the target region accompanied by large volumes of water. Historic gas analysis reveals that the gas is elevated in helium (0.36 percent) similar to the US Hugoton helium field. Current helium values exceed US$100 per MCF before processing cost. The Company believes that a significant volume of gas, containing helium, exists in place over the target region. This would represent a significant helium resource in North America.
Highlands is in discussions with parties for acquiring rights for the acreage in the target region. Whilst there can be no certainty over the success of either the Company evaluation or its ability to make the acquisition, Highlands will provide further updates to shareholders in due course.
In Situ Solution Mining Prospect, Grand County, Utah
As previously announced on 18 and 29 March 2016, Highlands has acquired 59 unpatented mining claims covering approximately 1,219 acres in Grand County, Utah. The Company became interested in the potential of this project while evaluating an anomalous well log in the region which indicated potential high concentrations of uranium. Gamma log readings are generally considered elevated when the American Petroleum Institute (API) units exceed 1,000 in a sandstone. Highlands' prospect reveals API units ranging from 3,000 to over 8,000 throughout several feet in the formation.
In situ solution mining is a more cost effective and environmentally acceptable technique of extracting uranium, as compared to conventional methods. Conventional methods typically excavate rock from the ground and treat it on the surface to extract the minerals. In situ solution mining allows the operator to leave the rock in the ground and extract the uranium by dissolving the minerals with a solution and pumping them to the surface where they can be processed. Highlands' Utah mining claims may contain significant quantities of uranium, which if proven, could be an ideal candidate for in situ solution mining.
The Company is currently in discussions with mining corporations for potential joint venture development of the uranium prospect. Further updates will be made as and when these discussions develop.
Shareholder meeting on 27 April 2016
At the Company's shareholder meeting on 27 April 2016, Robert Price intends to make a short presentation on the Company's progress to date, as summarised in this announced. Following the meeting, the presentation will be available on the company's website www.highlandsnr.com.
**ENDS**
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