Rose Petroleum plc (AIM: ROSE), the AIM quoted natural resources business, is pleased to provide an operational update on activity within its leaseholding acreage in the Paradox Basin, Utah, U.S.A. (the “Paradox acreage”).
As previously announced in January 2018, the Company exhibited the Paradox acreage project at the NAPE Summit in Houston, U.S.A. in early February 2018. The Company was encouraged by the strong interest shown in the project and a number of parties have since followed up. The Company is now in the process of putting together a Virtual Data Room for the project which is expected to be complete by the beginning of April 2018. Subject to the signing of confidentiality agreements, access will be available to those that have expressed interest in partnering on the project. We look forward to the process and are confident of a positive outcome.
The Company also announced that it had completed the initial structural interpretation of the 3D seismic data it acquired over its Gunnison Valley Unit (“GVU”), which is part of its Paradox acreage, and that it had commenced the process to prioritise and select the first development well locations.
The Company has completed the ranking analysis and has selected the location of its first well, the RPGVU 29-1.
The Application for Permit to Drill (“APD”) process for RPGVU 29-1 is underway and the Company has recently held face-to-face meetings with the regulatory parties responsible for the permitting process at both the Federal and State levels. These meetings have been pragmatic and positive, and the Company is expecting to obtain the permit to spud the well in Q4 2018. The Notice of Staking, which is the first requirement for the APD, is expected to be lodged with the Utah Bureau of Land Management by 9 April 2018.
Matthew Idiens, CEO, commented: “The NAPE summit was a great success in terms of gauging interest and as the geological and engineering work progresses, due to the quality of the data acquired and the experience of the technical team involved, we believe we have significantly de-risked the project so that we are now confident of achieving operational success and driving the project forward. We believe that if the discussions with prospective partners continue as they have commenced, we should be able to fund the well with minimal dilution to shareholders, if any.
“The Company continues to make excellent progress in pursuit of its key objective of spudding its first Paradox well in 2018. The seismic acquisition was completed within time and under budget, the initial well location has been selected, and the permitting process is underway. Importantly, we have been very encouraged by the interest shown in the project to date.”
Background to Well Site Ranking
The Company’s interpretation of the 3D seismic data identified circa. 50 potential well locations within the GVU. All locations are defined by areas that show seismic attributes that are likely to relate to the presence of fractures within the Cane Creek reservoir and all represent potential future development well locations. The locations were further ranked against three other criteria: their structural habitat, the probability of the presence of more than one fracture orientation, and their proximity to basement faulting.
These ranking criteria are very similar to those used in the successful development of the Cane Creek Field to the south of the GVU. The ranking scheme was also calibrated in a blind test with the three wells that are located within the 3D seismic data area that were drilled prior to the 3D seismic data being acquired and that penetrate the Cane Creek reservoir. Critically, this showed the single successful productive well (Federal 28-11) to score well in the ranking, with the two unsuccessful wells scoring very poorly (due to lack of open fractures as indicated by the seismic), providing strong support to the technical hypothesis.
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