23rd May 2014 08:16
LONDON (Alliance News) - Rose Petroleum PLC saw its shares jump by nearly two-thirds Friday after it said it had received positive economic analysis and reserve reports for its Mancos and Paradox oil and gas projects in Utah in the US.
The company, which also has oil and gas licenses in Germany and metal assets in Mexico and the US, said the reserve report produced by Ryder Scott Company showed that the unrisked prospective recoverable hydrocarbon resources on a best case basis are 1.45 billion barrels of oil and 4.79 trillion cubic feet of gas over the total Mancos shale and Paradox formation combined.
In a statement, it said the total best case in the Paradox formation is 966 million barrels of oil and 1.88 trillion cubic feet of gas, while the best case for the Mancos shale site is 486 million barrels of oil and 2.90 trillion cubic feet of gas.
"The resource is presently categorised as Prospective Resources which, as stated by the report, is based on the current lack of drilling directly on Rose's Leases. However, given that multiple wells in the surrounding area to Rose's Leases have produced oil and gas to surface from various Paradox Clastics, as have several shallow unstimulated vertical open hole wells in the Mancos shale, we believe that the project is extremely exciting and has the potential to dramatically change the outlook for Rose," Rose Petroleum Chief Executive Matthew Idiens said.
Separately, the company said an economic analysis of the same assets by Christie Ward Schultz had given Cane Creek in the Paradox basin a gross life of field net present value of USD1.47 billion and Mancos a net present value of USD941 million. The rate of return for Cane Creek is 125% and 96.31% for Mancos, the study said.
The analysis has put the net finding and development costs for Cane Creek at USD19.50 per barrel of oil equivalent, and the costs for Mancos at USD16.91 per barrel of oil equivalent.
"The highlights above show the potential size of the project and the models have been created using conservative assumptions on development role out and costs," Idiens said.
"With both basins being actively developed the infrastructure available to us is excellent with road, rail, pipeline, power, etc. are all readily available. The leases are also in an ideal location being only about an hour's drive to Grand Junction, which is the region's Oil & Gas services hub offering drill rigs, fraccing equipment, etc. Basically, we could not be better set," the CEO added.
Rose Petroleum shares were up 59.0% at 1.471 pence Friday morning, the biggest rise on AIM.
By Steve McGrath; [email protected]; @SteveMcGrath1
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