Update & Proposed Board Changes

RNS Number : 2538U

Rose Petroleum PLC

28 March 2019

 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

28 March 2019

Rose Petroleum plc

("Rose", the "Company" or the "Group")

Operations and Strategy Update and Proposed Board Changes

Further to its Operations Update announcement on 6 December 2018, Rose Petroleum plc (AIM: ROSE), the AIM-quoted natural resources business, is pleased to provide an update on its recent activities in the U.S.A and to outline the strategic direction of the Company.

The December update outlined that the Company, subject to funding and rig availability, was at an advanced stage of readiness in respect of being able to spud the GV 22-1 well on its acreage in the Paradox Basin, Utah, U.S.A (the "Paradox" or the "Paradox acreage"). The update went on to say that it hoped that an appropriate rig would be available in Q1 2019 by which time it was hoped that funding would have been arranged to enable the commencement of spudding of the GV 22-1 well.

The Company continues to keep up its search for an available rig so that it is able to kick off drilling operations as soon as possible after the funding is secured.

The drilling permit for the GVU29-1 well within the Gunnison Valley Unit has also now been approved, the second permit granted on the Paradox acreage, providing options for a multi-well drilling programme once funding is secured. We would like to thank the Bureau of Land Management for its ongoing commitment and support to Rose and the project. Negotiations with potential partners in respect to both a farm-in and other funding options on the Paradox acreage have continued throughout this quarter, however, the Board acknowledges that obtaining a commitment on appropriate terms has taken longer than anticipated.

As a result of the delay in securing funding, and with awareness of concerns raised by shareholders, the Board has decided to bring in experienced industry directors who can assist with the execution of the Company's strategy. The Company is very pleased to announce that David Sefton and James Berwick have agreed to join the Board. It is proposed that David will join the Board as Non-executive Chairman and James will be a Non-executive Director. Between them, David and James have extensive experience within the oil and gas industry, across Europe, Russia, the Middle East, Africa and North America. David is currently Executive Chairman of Anglo African Oil & Gas Plc and James is CEO of the same company. They have worked with many of the world's leading international and national oil companies and in addition to their experience bring extensive networks in both the oil & gas industry and the financial markets. David is also Managing Partner of Linton Capital LLP, a private equity manager, Executive Chairman of Wide Cells Group Plc and a director of LRE Capital. The current Board believes that David and James have the skills and experience required to enable Rose to build a strong and sustainable company positioned for growth. Their appointment is subject to regulatory due diligence and further updates will be provided in due course.

 The Board has also agreed that in order to maintain an appropriate size, Philip Jeffcock and Kelly Scott will resign as directors upon the appointment of David and James.  Kelly will however continue in his executive role with the Company, and the Board is extremely grateful to both of them for the work during this challenging period.

Matthew Idiens, CEO, Rose Petroleum plc, said: "While we share shareholders' frustration at the length of time it is taking to secure a farm-in partner for the Paradox project, the level of interest shown does reinforce our views as to the underlying value and potential in our asset.

In this context, I am very pleased that David and James have agreed to join the Board. This is a critical time for the Company. We have an asset capable of delivering real value for shareholders and we realise that we need to add certain skills and networks to unlock that value.  David and James are the right people to help us do so. I look forward to working with them and delivering on the trust and confidence that you have given to the Company."

David Sefton, Chairman designate, said "When James and I were approached to help, our starting position was that shareholders had funded this Company in order to realise the value in the Paradox asset and that therefore any plan had to be based on realising that value.  We think that while there are clearly challenges, and James and I still have more work to do to understand all aspects of the Paradox, this is a situation where we can see several potential solutions.  We have quickly developed a good working relationship with Matt and his team and share their commitment to deliver value to Rose's shareholders.  It is too early to come to definitive conclusions as to the right plan, but we are acutely aware that time is of the essence and look forward to updating shareholders in the very near future."

Contacts:

Rose Petroleum plc Matthew Idiens (CEO) Chris Eadie (CFO)	Tel: [phone] Tel: [phone]
Allenby Capital Limited - AIM Nominated Adviser Jeremy Porter / James Reeve / Liz Kirchner Cantor Fitzgerald Europe - Financial Adviser and Joint Broker Nick Tulloch David Porter Turner Pope Investments - Joint Broker	Tel: [phone] Tel: [phone] Tel: [phone]
Andy Thacker	Tel:  [phone]

Media enquiries:

Allerton Communications	Tel: [phone]
Peter Curtain	[e-mail]

Notes to editors

Rose Petroleum plc (http://rosepetroleum.com) is a North America-focused oil and gas company whose primary asset is approximately 80,000 net acres in the prolific oil and gas producing Paradox Basin in Utah, U.S.A., where it is earning into a 75% working interest. Using high-quality data gathered in a 3D seismic survey completed in October 2017, the Company has identified drilling locations in naturally fractured areas of the Paradox Formation and has chosen the first well location and it is now permitted to drill and plans to commence the drilling programme and the first well as soon as possible, subject to rig availability, stipulations of the leases and financing.

On 22 June 2018, Rose announced a Competent Person's Report ("CPR") and Maiden Contingent Resource by Gaffney Cline & Associates ("GCA") on the Rose acreage covered by the 3D seismic, approximately 17,250 acres of the 80,000 acres held.  The CPR estimated a 2C Contingent Resource, net to Rose, of 9.25 MMBbl of oil and 18.50 Bscf of gas, and an unrisked pre-tax Net Present Value (NPV10) on the 2C Resources, net to Rose, of US$122 million. The CPR focused solely on one single reservoir - the Cane Creek reservoir (the "CCR" or "Clastic 21") - of the multiple prospective reservoirs within the Paradox Formation.

The Company's established management is supported by an expert technical team with extensive experience of the basin, where current operations nearby have proven successful, with significant initial production rates and low decline rates, offering strong economics even in the present oil price environment.

The Company's strategy is to grow both organically and through acquisition, identifying additional hydrocarbon assets, conventional or unconventional, that would benefit from the Company's fast-acting, entrepreneurial approach.

Rose Petroleum has been quoted on AIM since June 2004.

 

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