27th Apr 2016 11:13
LONDON (Alliance News) - Rose Petroleum PLC said Wednesday it has completed a strategic review of its assets and disposed of its Cisco Dome field, as part of its continuing bid to reduce costs and liabilities across the group to enable it to weather the current market conditions.
The US focused oil, gas and mining company said it has made a "significant reduction of group and head office operational costs", as part of the "major steps" to reduce costs and liabilities.
Rose Petroleum is also terminating its Mancos formation earn-in and disposing of the Cisco Dome field, along with the associated plug and abandonment liability on over 50 wells.
Rose Petroleum had previously entered into an earn-in agreement for a 75% working interest in around 263,000 acres in Utah, comprised of the Uinta Basin, which targets the Mancos Shale, as well as the Paradox Basin. Under the agreement, Rose Petroleum was to carry the seller, Rockies Standard Oil Co LLC for the first USD17.0 million expenditure on projects. Rockies maintained a 25% interest.
Following this, Rose Petroleum had purchased the Cisco Dome field in October 2014, adjacent to the Mancos acreage.
However, Rose Petroleum on Wednesday said it has entered into an agreement with Rockies to now terminate its earn-in rights for the Mancos acreage, moving its focus to the Paradox, "which it feels is more prospective and carries a greater chance of success".
"The reassignment of the Mancos assets will significantly reduce the future expenses Rose would have had to pay on this acreage including lease rental/minimum royalty payments associated to the Mancos leasehold," Rose Petroleum said.
Elsewhere in its operations, Rose Petroleum said it has entered into an agreement with privately held Burdett Gold LLC to conduct exploration drilling on the Ardmore copper project which consists of 18 unpatented mining claims located north of Tucson, Arizona.
Rose Petroleum said it continues to investigate various opportunities across different sectors and geographies to provide additional projects alongside its existing hydrocarbon and metals activities.
"In the current market conditions and taking into account the general outlook, the board believes this is the best course to follow. We have combined this with implementing dramatic cost cuttings throughout the group and feel we are now well positioned for both the present and for a future upturn," said Chief Executive Matthew Idiens.
"Rose has always retained a diverse portfolio of assets to enable it to adapt rapidly to changing market conditions and we continue to believe that even in these challenging markets there are opportunities to create value for our shareholders," Idiens added.
Shares in Rose Petroleum were down 21% at 0.167 pence on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Rosebank