Rose Petroleum negotiates new agreement with partner at Paradox Basin in Utah
The firm stated that a restructuring of the project, which is based in Utah, United States, makes it, in the board’s view, “better positioned for development”.
The agreement, which supersedes all previous arrangements with Rockies Standard Oil Corporation SOC, enables Rose to gain an immediate 75% working interest ownership and operatorship of key acreage.
Chief Executive, Colin Harrington, explained that the project maintains both scale and value with the group’s natural core focus set on reaching the highest potential acreage.
“Most importantly, the Company will also gain immediate ownership of core acreage and will become Operator across the project,” Mr Harrington explained.
As a result of the agreement, Rose could receive a potentially highly economic core acreage of around 12,920 acres.
The space holds 21 high-priority drilling targets with an estimated 2C contingent recoverable resources of 8.3 million barrels of oil equivalent valued at $59 million net to Rose, a notable premium to the firm’s current market capitalisation.
At the same time, the firm has reduced its overall running costs of the project and extended its project term by a two year lease extension on the balance.
“I believe this restructuring will make the project more attractive to potential investors as we continue with our farm-in process,” Mr Harrington revealed.
Overall, the firm’s revised strategy aims to work on a balanced portfolio of assets, Mr Harrington further explained:
"In the Board's view, the high-grading of the project will create a long-term future for the project, one which meets the Board's selection criteria and which will positively complement the Company's future balanced asset portfolio."
Additionally, the company explained that it is continuing to work with the U.S. Department of Energy and the University of Utah on a study related to improving production and raising the profile of oil drilling in the Northern Paradox Basin.
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