Rose Petroleum plc (AIM: ROSE), the North America-focused oil and gas company, is pleased to announce that the U.S. Bureau of Land Management (“BLM”) has approved the Application for Permit to Drill (“APD”) for the proposed GV 22-1 well within the Company’s Paradox acreage (“Paradox acreage”) in Utah. The APD will be valid for an initial period of two years.
The GV 22-1 well location is within the new leases acquired in March 2018, within the area covered by the Company’s 3D seismic acquisition that was completed in December 2017, and adjoining the existing leases already within the Gunnison Valley Unit.
The Company now plans to drill its first unit obligation well at the GV 22-1 location as soon as possible, however, the Company has agreed with the BLM to extend the boundary of the Gunnison Valley Unit to include the new leases in that unit. The unit boundary changes, which will allow the GV 22-1 to be the next obligation well, involve an amount of administrative detail and are expected to take approximately 45 days, assuming no unforeseen delays.
Once the boundary changes have been completed all permits required from both the BLM and State of Utah will be in place for operations to commence, subject to the operational stipulations of the APD. Discussions regarding financing of the drilling programme are ongoing and will be accelerated once these GVU boundary amendments are finalised by the BLM.
The GV 22-1 will be a horizontal well which Rose’s management consider has a potential Estimated Ultimate Recovery (“EUR”) of 894,000 barrels of oil equivalent (“BOE”), consistent with the Gaffney Cline Competent Person’s report. The potential of the GV 22-1 well is supported by its close analogy to highly productive structures (>1mmboe EUR) within the nearby Cane Creek Field (12 miles south) and locally by its close proximity to the producing 28-11 well (approx. 1 mile). This well produces from the porous and permeable fracture network within Clastic 21 and can be tied to the proposed 22-1 location within the 3D seismic data set. The 28-11 is a vertical well that was drilled by Delta Petroleum in 2006 without the benefit of 3D seismic. It has produced 141,000 barrels of oil equivalent (“BOE”), and represents a key piece of evidence for the presence of hydrocarbons and of a greater fracture network across the area covered by the 3D seismic. These factors give the Board a high degree of confidence in the potential of the GV 22-1 well, and it was for these reasons that the Company decided to prioritise the GV 22-1 location as Rose’s first well.
Further updates will be provided as soon as appropriate on both the inclusion of the additional leases within the GVU and on the proposed timing for the spudding of the Company’s first Paradox well.
Matthew Idiens, CEO, commented: “We are delighted to have received this final permit for the GV 22-1 well. Having acquired a significant footprint in the Basin, permitted and shot the 3D seismic, processed and interpreted the data with fantastic results, we are now finally close to delivering on our key corporate objective of spudding our first Paradox well.”