Rose, on Monday, revealed new analysis of its Paradox basin acreage, in Utah, seeing the potential for some 450mln barrels to be present.
Specifically, the company has received the initial interpretation of new 3D seismic data for a 20 square mile area known as the Gunnison Valley Unit or GSU.
Chief executive Matthew Idiens described the initial seismic results as “a watershed moment” for Rose.
The process, which is ongoing, has identified some 53 potential well locations in the Cane Creek reservoir zone at the GSU, and the resource potential of those locations has been estimated.
Some 450mln barrels oil equivalent of mean unrisked and undiscovered original-hydrocarbon-in-place are estimated, with the prospective recoverable resource figure estimated at 32.5mln barrels oil equivalent.
Rose highlighted that the new estimates are consistent with prior assessments by independent consultants Ryder Scott back in 2014 (that report covered a larger 80 square mile area).
Ryder Scott at that time estimated the chance of success at 56% for the Cane Creek reservoir zone, describing the play as a ‘low risk prospect’.
Getting 'drill ready' in the Paradox
Rose is now working to upgrade certain areas so that they are ‘drill ready’, and, given that it set out to identify five initial well locations, the company ought to now have many options.
At the same time, the company is advancing applications for drilling permits and Rose said the first well could be drilled in the second half of this year.
“We believe this area represents a highly attractive drilling proposition, supported by excellent quality data that exhibits multiple drilling targets analogous to the structures of previously successful wells, to the south of our acreage,” Idiens said in a statement.
He added: “Negotiations with potential investors and partners to fund the drilling programme are ongoing, and the board will prioritise options, including joint venture and farm-in arrangements, to ensure that any dilution to existing shareholders is kept to an absolute minimum, while still realising the full value of the project.
“We will keep the market fully updated on what promises to be a very exciting period ahead for the company.”
Pointing to significant further upside, the company also noted that, in addition to the GSU, it has more than 100 square miles of acreage that is deemed prospective for the Cane Creek reservoir zone - there’s another 65 square miles of the Grand Main leasehold area and 48 square miles of the Emery Main leasehold area.
Long awaited gold disposal complete
The exciting progress in Utah comes as the company focusses more on oil and gas business, following the completion of a long worked on disposal of the group’s legacy Mexican gold operations in December.
The gold producing operation was sold to Magellan Gold Corporation (OTCQB:MAGE) in a deal worth a total of US$1.5mln, comprising US$1mln of cash and US$500,000 of shares (representing 15% of Magellan).
Idiens, at that time, said: "I am delighted that we have now completed the disposal of the SDA Mill.
"We now look forward to focusing our operational and strategic efforts on our oil and gas assets in the Paradox Basin, USA."