Further to its Operations Update announcement on 6 December 2018, Rose Petroleum plc (AIM: ROSE), the AIM-quoted natural resources business, is pleased to provide an update on its recent activities in the U.S.A and to outline the strategic direction of the Company.
The December update outlined that the Company, subject to funding and rig availability, was at an advanced stage of readiness in respect of being able to spud the GV 22-1 well on its acreage in the Paradox Basin, Utah, U.S.A (the “Paradox” or the “Paradox acreage”). The update went on to say that it hoped that an appropriate rig would be available in Q1 2019 by which time it was hoped that funding would have been arranged to enable the commencement of spudding of the GV 22-1 well.
The Company continues to keep up its search for an available rig so that it is able to kick off drilling operations as soon as possible after the funding is secured.
The drilling permit for the GVU29-1 well within the Gunnison Valley Unit has also now been approved, the second permit granted on the Paradox acreage, providing options for a multi-well drilling programme once funding is secured. We would like to thank the Bureau of Land Management for its ongoing commitment and support to Rose and the project. Negotiations with potential partners in respect to both a farm-in and other funding options on the Paradox acreage have continued throughout this quarter, however, the Board acknowledges that obtaining a commitment on appropriate terms has taken longer than anticipated.
As a result of the delay in securing funding, and with awareness of concerns raised by shareholders, the Board has decided to bring in experienced industry directors who can assist with the execution of the Company’s strategy. The Company is very pleased to announce that David Sefton and James Berwick have agreed to join the Board. It is proposed that David will join the Board as Non-executive Chairman and James will be a Non-executive Director. Between them, David and James have extensive experience within the oil and gas industry, across Europe, Russia, the Middle East, Africa and North America. David is currently Executive Chairman of Anglo African Oil & Gas Plc and James is CEO of the same company. They have worked with many of the world’s leading international and national oil companies and in addition to their experience bring extensive networks in both the oil & gas industry and the financial markets. David is also Managing Partner of Linton Capital LLP, a private equity manager, Executive Chairman of Wide Cells Group Plc and a director of LRE Capital. The current Board believes that David and James have the skills and experience required to enable Rose to build a strong and sustainable company positioned for growth. Their appointment is subject to regulatory due diligence and further updates will be provided in due course.
The Board has also agreed that in order to maintain an appropriate size, Philip Jeffcock and Kelly Scott will resign as directors upon the appointment of David and James. Kelly will however continue in his executive role with the Company, and the Board is extremely grateful to both of them for the work during this challenging period.
Matthew Idiens, CEO, Rose Petroleum plc, said: “While we share shareholders’ frustration at the length of time it is taking to secure a farm-in partner for the Paradox project, the level of interest shown does reinforce our views as to the underlying value and potential in our asset.
In this context, I am very pleased that David and James have agreed to join the Board. This is a critical time for the Company. We have an asset capable of delivering real value for shareholders and we realise that we need to add certain skills and networks to unlock that value. David and James are the right people to help us do so. I look forward to working with them and delivering on the trust and confidence that you have given to the Company.”
David Sefton, Chairman designate, said “When James and I were approached to help, our starting position was that shareholders had funded this Company in order to realise the value in the Paradox asset and that therefore any plan had to be based on realising that value. We think that while there are clearly challenges, and James and I still have more work to do to understand all aspects of the Paradox, this is a situation where we can see several potential solutions. We have quickly developed a good working relationship with Matt and his team and share their commitment to deliver value to Rose’s shareholders. It is too early to come to definitive conclusions as to the right plan, but we are acutely aware that time is of the essence and look forward to updating shareholders in the very near future.”