Rose Petroleum plc

Beaufort Breakfast Today article

24-June-2014

Rose Petroleum decided to raise £6.5m (before expenses) through an oversubscribed conditional placing by Allenby Capital Limited and Pareto Securities Limited

Rose Petroleum (ROSE.L, 1.90p) - Speculative Buy
 
Rose Petroleum decided to raise £6.5m (before expenses) through an oversubscribed conditional placing by Allenby Capital Limited and Pareto Securities Limited and subscription of 433.3 million shares of 0.1p each at 1.5p per share. The company plans to utilise these funds for development of the Mancos and Paradox assets in Eastern Utah, including completion of a horizontal Mancos well and testing the vertical Paradox well in Q3 2014. Besides, some of these funds would be directed towards general working capital purposes and potential strategic acquisitions, the company informed. 

 

Our view: The raising of £6.5m is likely to help Rose Petroleum in registering initial production from the project in H1 2015 and thereby, unlocking the prospectivity of its assets in Utah. The Mancos and Paradox prospects are estimated to hold 1.45 billion barrels of oil (bbo) and 4.79 trillion cubic feet (tcf) of gas. The interest shown by third parties to partner for the development of these assets, further indicates the attractive potential. Given the availability of robust infrastructure at the location of these two prospects, close proximity to the region’s major oil & gas service provider and production visibility by the end of this year, we recommend a Speculative Buy on the stock. 

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