Rose Petroleum plc

Mancos operations update - Uinta Basin, Utah

31-March-2015

Rose is pleased to provide an operational update on activities within its US onshore oil and gas division

Rose Petroleum plc, the AIM-listed (Ticker: ROSE) natural resources company, is pleased to provide an operational update on activities within its US onshore oil and gas division which is made up of a 75% working interest in over 250,000 gross acres in the highly prospective Uinta and Paradox Basins in Utah.
 
Summary
State 1-34 Mancos well, Uinta Basin, Utah
  • Positive results from initial core analysis on the Mancos Shale by Weatherford reiterates the strong potential of the Mancos, which benefits from a low breakeven price considering the excellent infrastructure and low entry price
  • Results from the Mancos Shale indicate good natural fracturing, positive total organic content ("TOC") between 2.0% and 4.5%, strong residual and moveable hydrocarbon volumes and good storage capacity based on the porosity of the siltstone intervals
  • When the core analysis is completed it will be integrated with the Halliburton and Weatherford's open hole well log data and mud log data for a comprehensive analysis of the Mancos
  • Significant Un-risked Prospective Recoverable Resource Estimates for Rose's Mancos assets of 709 million barrels of oil ("MMBO") and 4.26 trillion cubic feet of gas ("TCFG") based on Ryder Scott's Certified Persons Report
  • Completion attempt of the deeper conventional intervals was not deemed commercially viable - Mancos Shale remains the Company's primary target
Future Mancos drilling programme, Uinta Basin, Utah
  • Six Mancos wells are being prepared for permitting to drill with the Bureau of Land Management and the State of Utah Division of Oil, Gas and Mining
  • Well locations selected on the basis of optimum resource development and to show consistency of the shale throughout the acreage
  • Once drill permits are approved, a Mancos drilling programme is projected to commence relatively shortly thereafter once all contractors and vendors are in-place
 
Matthew Idiens, Group CEO, commented:
 
"The unconventional Mancos shale play has always been our prime target and where the significant potential of our large acreage position lies.  Initial analytical results on the Mancos shale core are encouraging and therefore we are focusing our efforts and resources on this opportunity.  Encouraged by the initial indication of the core results we are pressing ahead with permitting additional Mancos wells, locations selected specifically to optimise the resource upgrade and show the consistency of the shale across our acreage.  While we hoped that the conventional target could have delivered us quick, albeit small, production, it was always seen as a bonus opportunity. It is important to emphasize that the outcome of the conventional well in no way takes anything away from the potential of our core focus, the Mancos shale.  We look forward to keeping the market updated on our progress."
 
State 1-34 Mancos Well
Rose began completion of the deeper conventional intervals below the Mancos in the State 1-34 well earlier this month. Four intervals were perforated and flow tested and none were deemed likely to be commercial.  The well is currently shut-in pending completion of the Mancos core analysis, which was the primary objective of this well.
 
The primary purpose of the State 1-34 well is to gather data from the Mancos shale.  Based on the mud logs, open hole logs, and core analysis, the preliminary results for the Mancos shale are encouraging. Ryder Scott calculated mean gross Un-risked Prospective Recoverable Resource Estimates for Rose's Mancos assets of 709 MMBO and 4.26 TCFG.  With this level of recoverable reserve potential and the positive initial data from the State 1-34 well, the Mancos shale is the Company's initial primary focus while the Paradox 3-D seismic programme is underway.
 
The analytical work on the Mancos cores is expected to be completed in Q2 2015 and will be used to orient the direction of horizontal laterals in future Mancos wells and to optimise fracture stimulation design of the horizontal wellbores.
 
Mancos drilling programme
Following an in-depth geological assessment, Rose has now selected six primary locations and is in the process of preparing the drilling permit applications to be submitted to the Bureau of Land Management and the State of Utah Division of Oil, Gas and Mining for approval. Once the permits are approved, Rose anticipates initiating a first phase, three well drilling programme shortly thereafter, once all contractors and vendors are in-place.  Once the first three wells have been drilled and evaluated, the Company will have six months before it is obliged to drill the other three wells or allow the drilling permits to lapse and then re-permit.
 

John Blair (BSc Geology and MSc Geophysics), Director of Oil & Gas for Rose Petroleum plc, who meets the criteria of a qualified person under the AIM Rules - Note for Mining and Oil & Gas Companies, has reviewed and approved the technical information contained within this announcement.