Rose Petroleum Plc (AIM:ROSE) Turner Pope research note 29/1/2018

Rose concluded its programme to acquire 40 square miles of 3D seismic data over a key area its acreage position in the Paradox Basin in Utah in late October 2017 and has now completed its initial structural interpretation over a 20 sq. mile lease position called the Gunnison Valley Unit (GVU). Initial seismic interpretation suggests that this area is highly prospective and Rose has already identified over 50 potential drilling targets.

Rose has completed its initial structural interpretation of the 3D seismic data acquired over its Gunnison Valley Unit (GVU) which comprises part of its larger lease position in the Paradox Basin. Analysis of the 3D data confirms a wide range of key geological structures and the identification of multiple drilling targets.

The interpretation is an ongoing process. However, Rose’s analysis has identified 53 potential well locations in the Cane Creek reservoir alone within the 20 sq. mile area of the GVU covered by 3D seismic. The map overleaf depicts clearly the focus of Rose’s recent 3D seismic survey within its acreage position.

Rose’s initial internal resource estimates are consistent with the Ryder Scott competent persons report (CPR), published in 2014, which covers the company’s 85 sq. mile Grand Main leasehold area (including the GVU acreage). For the 20 sq. mile area covered by the 3D seismic data, the report suggests that the gross resource potential is hydrocarbons in place of 450 mmboe and mean unrisked prospective recoverable resources of 32.5 mmboe. In the 2014 report, Ryder Scott also ascribed a chance of success of 56% for drilling in the Cane Creek reservoir zone which represents a relatively low risk prospect.

As the map overleaf also depicts, Rose possesses a further 65 sq. miles of acreage in the Grand Main leasehold area and 48 sq. miles of similar acreage in the Emery Main leasehold area which all contain the highly prospective Cane Creek reservoir zone in addition to other Paradox formation clastic intervals. Rose will now proceed with further analysis to refine the Cane Creek reservoir zone resource potential. This work will enable the company to high grade its first well locations and evaluate other areas with the Paradox Formation which consists of approximately 24 clastic zones, of which Cane Creek is the primary producing zone to date.

The company is currently progressing the Application for Permit to Drill (APD) process for the highest priority drill target locations with a view to drilling its first well in H2 2018. Rose confirms that it is fully funded for these permitting activities.

Rose is planning to exhibit the structural interpretation of its 3D seismic acquisition programme at the upcoming NAPE Summit in Houston Texas from 6-9 February 2018. The company will use this exciting opportunity to meet potential investors with a view to acquiring partners and investors to fund future drilling activities through joint venture or farm-in agreements. With negotiations of this description already underway, we expect news flow to accelerate over Q1.

Rose’s acreage within the Paradox Basin, Utah



This is a non-independent marketing communication under the rules of the Financial Conduct Authority (“FCA”). The analyst who has prepared this report is aware that Turner Pope Investments (TPI) Limited (“TPI”) has a relationship with the company covered in this report. Accordingly, the report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing by TPI or its clients ahead of the dissemination of investment research.

TPI manages its conflicts in accordance with its conflict management policy. For example, TPI may provide services (including corporate finance advice) where the flow of information is restricted by a Chinese wall. Accordingly, information may be available to TPI that is not reflected in this document. TPI may have acted upon or used research recommendations before they have been published.

Risk Warnings

Retail clients (as defined by the rules of the FCA) must not rely on this document. Any opinions expressed in this document are those of TPI’s research analyst. Any forecast or valuation given in this document is the theoretical result of a study of a range of possible outcomes and is not a forecast of a likely outcome or share price.

The value of securities, particularly those of smaller companies, can fall as well as rise and may be subject to large and sudden swings. In addition, the level of marketability of smaller company securities may result in significant trading spreads and sometimes may lead to difficulties in opening and/or closing positions. Past performance is not necessarily a guide to future performance and forecasts are not a reliable indicator of future results.

AIM is a market designed primarily for emerging or smaller companies and the rules of this market are less demanding than those of the Official List of the UK Listing Authority; consequently AIM investments may not be suitable for some investors. Liquidity may be lower and hence some investments may be harder to realise.

Specific disclaimers

TPI has been appointed to act as broker to Rose Petroleum plc (“Rose Petroleum”) which is listed on the AIM Market of the London Stock Exchange (“AIM”). TPI’s private and institutional clients may hold, subscribe for or buy or sell Rose Petroleum’s securities.

This document has been produced by TPI independently of Rose Petroleum. Opinions and estimates in this document are entirely those of TPI as part of its internal research activity. TPI has no authority whatsoever to make any representation or warranty on behalf of Rose Petroleum.

General disclaimers

This document, which presents the views of TPI’s research analyst, cannot be regarded as “investment research” in accordance with the FCA definition. The contents are based upon sources of information believed to be reliable but no warranty or representation, express or implied, is given as to their accuracy or completeness. Any opinion reflects TPI’s judgement at the date of publication and neither TPI nor any of its directors or employees accepts any responsibility in respect of the information or recommendations contained herein which, moreover, are subject to change without notice.

Any forecast or valuation given in this document is the theoretical result of a study of a range of possible outcomes and is not a forecast of a likely outcome or share price. TPI does not undertake to provide updates to any opinions or views expressed in this document. TPI accepts no liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document (except in respect of wilful default and to the extent that any such liability cannot be excluded by applicable law).

The information in this document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.

This document is approved and issued by TPI for publication only to UK persons who are authorised persons under the Financial Services and Markets Act 2000 and to professional clients, as defined by Directive 2004/39/EC as set out in the rules of the Financial Conduct Authority. This document may not be published, distributed or transmitted to persons in the United States of America, Japan, Canada or Australia. This document may not be copied or reproduced or re-distributed to any other person or organisation, in whole or in part, without TPI’s prior written consent.

Copyright © 2018 Turner Pope Investments (TPI) Limited, all rights reserved.

Linking Shareholders and Executives :Share Talk

If anyone reads this article found it useful, helpful? Then please subscribe or follow SHARE TALK on our Twitter page for future updates.

Terms of Website Use

All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned

Share via
Copy link
Malcare WordPress Security