Rose Petroleum PLC (LON:ROSE) is expected to follow its encouraging exploration breakthrough with a push to attract new partners.
The explorer unveiled a new analysis of its Paradox basin acreage in Utah, which sees the potential for some 450mln barrels to be present.
READ: Rose Petroleum investors boosted as new analysis sees 450mln barrels in Paradox basin
Specifically, the company has received the initial interpretation of new 3D seismic data for a 20-square mile area known as the Gunnison Valley Unit or GSU. The process, which is ongoing, has identified some 53 potential well locations in the Cane Creek reservoir zone at the GSU, and the resource potential of those locations has been estimated.
Negotiations are taking place
Barney Gray, research analyst for Turner Pope Investments, in a note, highlighted that negotiations with potential investors or partners are underway, and he reckons news flow will now accelerate over the first quarter.
“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,” Gray said.
“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.”
Getting 'drill ready' in the Paradox
Rose is now working to upgrade certain areas so that they are ‘drill ready’, meanwhile, it is also advancing applications for drilling permits. The first well could be drilled in the second half of this year, Rose added.
“We believe this area represents a highly attractive drilling proposition, supported by excellent quality data that exhibits multiple drilling targets analogous to the structures of previously successful wells, to the south of our acreage,” Idiens said in a statement.
He added: “Negotiations with potential investors and partners to fund the drilling programme are ongoing, and the board will prioritise options, including joint venture and farm-in arrangements, to ensure that any dilution to existing shareholders is kept to an absolute minimum, while still realising the full value of the project.
“We will keep the market fully updated on what promises to be a very exciting period ahead for the company.”
Pointing to significant further upside, the company also noted that, in addition to the GSU, it has more than 100 square miles of acreage that is deemed prospective for the Cane Creek reservoir zone - there’s another 65 square miles of the Grand Main leasehold area and 48 square miles of the Emery Main leasehold area.