3rd Feb 2015 08:47
LONDON (Alliance News) - Rose Petroleum PLC saw its shares rise Tuesday after it said mud logs from a recently drilled well at its Uinta Basin site in Utah indicated the presence of oil and gas throughout the shale and in a deeper conventional reservoir, while it is also set to start earning revenue at its Mina Charay gold mine in Mexico from March.
In an operational update, the resources company said it had successfully drilled the State 1-34 Mancos well in the Uinta Basin to 3,200 total depth and the mud logs indicated oil and gas throughout the Mancos shale. It also thinks there's 84 feet of potential net oil play in the conventional reservoirs below the Mancos across a 600ft total interval.
It said two whole cores were cut in the Mancos which it is currently analysing, while an additional 50 rotary sidewall cores were also taken.
It now plans to complete the conventional reservoirs in March, keeping it on track for initial oil production in the first half of this year, while it waits for the core analysis, and then to prepare to drill a horizontal lateral well in the Mancos.
"Importantly we are operating in a low cost environment which we anticipate will translate into an economic oil reserve development even in the current oil and gas pricing environment," Rose Petroleum Chief Executive Matthew Idiens said in a statement.
The news wasn't so good at the State 16-42 Paradox well in the Paradox Basin in Utah, after the company deemed the casing cementing programme conducted by the well's previous operator inadequate to successfully complete the testing programme on this well. It will therefore make a 3D seismic survey its priority prior to selecting a new well location.
"At this time, and with the apparent success of the State 1-34 well, we believe it is prudent to cease operations on the State 16-42 Paradox well considering the complications with the wellbore's cement. As this was only ever intended to be a vertical completion to gather reservoir data for future horizontal wells, our funds will be better utilised in the Mancos area until we have the 3D seismic data available to select our first horizontal well location in the Paradox Basin," Idiens said.
In its mining operations, Rose said it had made "encouraging" discoveries averaging 79.3% gold and 61.7% silver from a pilot run of develoment ore through the SDA mill at the Mina Charay mine in Mexico. It said it is on track to reach full forecast production of 100 tonnes a day this month, and expects to start making cash from March.
However, it has decided to terminate the drill programme at the TC Copper project in New Mexico in the US after it didn't encounter any porphyry-style alteration of mineralisation. Still, all the costs and overheads at the operation were borne by joint venture partner Lowell Copper.
"The TC copper project has been a free carry for Rose and the termination of the drill programme allows us to focus our mineral exploration efforts on our Tango copper and molybdenum concessions located northeast of the town of El Rosario in southern Sinaloa, Mexico, which we plan to drill as soon as possible," Idiens said.
Rose Petroleum shares were up 5.8% at 1.61 pence early Tuesday.
By Steve McGrath; [email protected]; @stevemcgrath1
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