Rose Petroleum (ROSE) released two updates on Monday regarding its Paradox Basin project in Utah and its acquisition of the McCoy lease in Colorado.
The Rocky Mountain-focused oil and gas firm was granted regulatory approval by the U.S. Bureau of Land Management for two-year lease extensions on its project in the Paradox Basin.
Rose also said it has gained a 75% working interest of the extended acreage, now containing 19,900 acres with extended lease terms, instead of the previous earn-in structure, at no cost to the firm.
The project is estimated to have net 2C Contingent Recoverable Resources of about 9 million barrels of oil equivalent within the Cane Creek reservoir alone, according to the company.
Colin Harrington, CEO of Rose Petroleum said: "With the project JV agreement successfully renegotiated, the project land position now restructured and an increase in term now secured, we are in a strong position to recommence our farm-in process.”
He continued: "The restructured project, combined with the increased focus that partners like the U.S. Department of Energy are bringing to the Paradox Basin, will make the project more attractive to potential funding partners.”
Shares in Rose were trading 7.32% higher at 1.1p on Monday
The AIM-listed oil and gas firm also said it reached some key milestones in its acquisition of the McCoy lease, namely, the signing of a lease amendment to drill extended two-mile lateral horizontal wells across the lease.
Rose also revealed that Captiva Energy Holdings, the company it is acquiring the lease from, has decided to support Great Western Operating Company’s application for a 1280-acre drilling spacing unit, which extends across the McCoy lease.
Great Western is one of the basin’s most active upstream operators, with plans to drill up to 26 wells across the area, including within the McCoy lease.
CEO Colin Harrington said: "These are exciting times for the Company as we look to complete the Acquisition and move closer to our goal of becoming an oil producer in the near term.”
“We are confident of robust economic returns from these two-mile lateral horizontal wells, and upon completion of the Acquisition we look forward to participating in the proposed drilling programme as working interest owners alongside CEH and Great Western.”
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