Rose Petroleum plc

Utah Project

Rose Petroleum plc, through a farm-in agreement, holds rights to acquire 75% of certain oil, gas and hydrocarbon leases covering approximately 90,000 net acres in Grand and Emery Counties.  The agreement is under Rose Petroleum (Utah) LLC, a wholly-owned subsidiary of Rose Petroleum plc. The agreement makes Rose a major stakeholder in one of the more prolific U.S. unconventional oil resource plays in the Paradox Basin of eastern Utah.

Rose Utah is the designated operator and its 75% working interest in the Leases equates to approximately 90,000 acres net to Rose. The Project targets Cane Creek clastic sandstone which is just one of multiple different sandstones layered in a highly over-pressured salt basin.  Rose Utah’s 75% working interest is being acquired from Rockies Standard Oil Company, LLC, which retains the remaining 25% working interest.

Cane Creek Shale

Rose Utah’s Leases are located 12 miles north of Fidelity Exploration and Production Company’s Cane Creek Field, which it’s currently under development. Fidelity is a wholly owned subsidiary of MDU Resources Group, Inc. (NYSE: MDU) and recently solds its Paradox acreage to Wesco Operating out of Casper, WY when MDU decided to exit the E&P sector completely.  The Cane Creek Sandstone is a member of the Pennsylvanian age Paradox Formation. Within and adjacent to the Cane Creek Field, there are vertical Cane Creek wells that have produced over 1.0 million barrels of oil (“MMBO”) from individual vertical wells.  Some of Fidelity’s recent Cane Creek wells , with new drilling and completion techniques, came on as high as 1500 BOEPD and one well has cum over 800,000 BOE in a very short period of time.

Fidelity’s current drilling programme is regularly achieving initial production rates of over 1,000 BOPD with individual well reserve estimates as high as 1.5 MMBO per well. Fidelity’s Cane Creek 12-1 well was among the best onshore wells drilled in the U.S. in 2012. It flowed at 1,500 BOPD for nine months and was still flowing at 1,000 BOPD in late 2014 and has produced over 600 MBO to date.  In 2013, Fidelity produced nearly 1.0 MMBO for the year from the Cane Creek Field from less than 15 wells.  By 2014, Fidelity had produced 5.2 MMbo and 4.2 BCF of gas from just 20 wells.  

There are 20 individual reservoir intervals in the Paradox Formation, of which the Cane Creek is only one. To date, Fidelity has focused its development on the Cane Creek interval but it has been reported by Fidelity that it plans to initiate development of the other intervals this year having identified 10 additional intervals as prospective with anticipated reserves of 150 to 400 MBO per interval, per well.

Infrastructure

The area in which the Leases are situated has extensive infrastructure in place including refineries, natural gas pipelines, liquid products pipelines, oil pipelines, processing plants and access to two rivers for water at reasonable costs. There are also numerous oil field services, vendors and contractors in the area. The Leases are accessible year round with a major interstate highway running through the middle of the Project. The terrain is flat, dry, high plains desert with minimal vegetation and an extremely low population density.

Estimated reserve potential

Based on the already established production in the Mancos and Cane Creek, the Directors of Rose Petroleum believe the resource potential of the Leases to be quite significant and have engaged Ryder Scott Company, LP to produce an independent resource assessment report.


As of April 2014,  Ryder Scott projected a Prospective Recoverable Resource over the 90,000 acres of the Rose held project area of 1,115 MMBO and 2,187 Bcf of recoverable resource.  Though Ryder categorized the Rose acreage as a prospective resource, it considered it as a direct laydown to the Fidelity reservoir.  Ryder though modest with its calculations showed an upside case of 1,995 MMBO and 3,914 BCF of potential reserves.  These type of mean reserves bolster economics of approximately  $765 MM life of project NPV(10) and ROR of 52% with $55/Bbl for oil  and $3.00 / Mcf gas.

All production and operational information is provided from the public domain, the State of Utah or the respective operators..