Rose Petroleum plc (AIM: ROSE), the AIM quoted natural resources business, is pleased to announce that the Company and Rockies Standard Oil Company (“RSOC”), its joint venture partner have successfully participated in the December 2018 Bureau of Land Management Utah lease sale. This resulted in the Company acquiring a 75% working interest in an additional 1,920 gross acres (1,260 net acres) (the “New Acreage”) immediately adjoining its Gunnison Valley Unit (“GVU”) acreage in the Paradox Basin, Utah, U.S.A.
The majority of the New Acreage, 1,600 of the total 1,920 gross acres, is covered by the existing 3D seismic data that the Company acquired in late 2017. This acreage purchase completes a targeted lease acquisition programme driven by the 3D seismic interpretation that has resulted in the capture of multiple high-ranked well locations in addition to those found within the initial GVU lease position.
Utilising a similar methodology to that of the Gaffney Cline & Associates (“GCA”) Competent Person’s Report (dated 30 April 2018), Rose estimates that the New Acreage has potential 2C Contingent Resources (net to Rose) of 1.2mmboe (million barrels of oil equivalent), within Clastic 21. This is in addition to the existing Clastic 21, GVU net 2C Contingent Resources estimate of 12.33 mmboe which was valued at a pre-tax NPV10 of US$122.4m, by GCA in 2018.
The New Acreage was acquired at a cost of $35,000 and an exceptionally low acquisition cost/net boe of US$0.03/boe.
Matthew Idiens, CEO, commented: “Following on from the very encouraging independent technical studies completed by both GCA and Schlumberger, this acquisition stands to add further high quality acreage at an exceptionally low entry cost. Rose estimates an NPV10 of approximately US$12m for the New Acreage, making this an excellent value add ahead of the Company’s proposed drilling programme. I now believe that Rose has fully utilised its unique 3D dataset to build a high potential acreage position and to significantly de-risk the initial drilling locations. We are now focusing wholeheartedly on the main objective of financing the drilling programme.”