Rose Petroleum (LON:ROSE), which is up about 500% this year on the strength of its US projects, is set for another boost, this time from its European shale assets.
Germany is reportedly prepared to lift a ban on fracking to unlock its shale gas resources and at the same time reduce its dependency on imports from Russia.
The geopolitical pressures in the wake of Russia’s annexation of Crimea highlighted the vulnerability of Europe’s energy markets.
Moreover, the extent of Europe’s gas dependency was laid bare when inherently self-defeating sanctions on Russia’s exports were considered.
A re-evaluation of domestic resources within Europe was always likely to be a consequence.
Indeed, an apparent u-turn on Germany anti-fracking stance and the British government’s enthusiastic support for shale represent potentially significant shifts in perspectives.
And broader rethink could be very significant indeed. Germany’s shale resources, estimated at about 17tln cubic feet (tcf) of gas and 700mln barrels of oil, appear paltry compared to the 137 tcf and 4.7bn barrels believed to be present within France’s borders.
For Rose Petroleum, January’s acquisition of the Konstanz and Biberach licences in south western Germany looks deftly timed if the fracking ban is lifted. The €400,000 deal for 635,000 acres in the Molasse Basin makes Rose a relative early-mover.
Konstanz covers around 370,000 acres, and historic data from two oilfields and two deep wells give insight into the prospectivity of the area. There are four main targets: two oil shale plays, one shale gas play and tight gas in sandstones.
There is less available information on Biberach, which spans 266,000 acres, but the company believes it has similar targets as those found at Konstanz.
Since the turn of the year, the AIM share has soared more than 500% to 3.3p from 0.4p. The bulk of this advance came last month following a resource estimate for the Utah acreage.
Respected consultant Ryder Scott estimates the group’s interests in the Mancos and Paradox shale plays in Utah could contain 1.45bn barrels of oil and 4.79 trillion cubic feet (tcf) of gas.
The numbers have yet to be proven up by drilling, but reflect a great deal of potential.
They also backed-up Rose’s initial enthusiasm for its newly acquired projects.
It agreed in March to pay US$2mln upfront and committed to spend US$17mln on drilling, to acquire a 75% interest in 230,000 acres split across the Cane Creek property.