Highlands Natural Resources Plc (LON:HNR) told investors it has secured a natural gas sales deal for the East Denver project which is expected to see gas monetisation in the second half of this year.
It presents a further revenue opportunity and adds further upside potential for the asset, the company said.
The company highlighted that its latest production figures put it within the “top 3% of all Niobrara wells in Colorado”, and noted that it had generated US$3.8mln of net revenue in the period ended March 31.
READ: Highlands Natural Resources tops 100,000 barrels at East Denver
Additionally, it said that the new gas sales deal has paved the way for the finalisation of third-party funding to drill and complete additional wells in East Denver. Talks continue and described as being ‘advanced’.
“This natural gas purchase agreement will be highly accretive to the East Denver project, which has already demonstrated its ability to perform at a remarkable level of productivity and efficiency,” said Robert Price, Highlands chief executive.
“This, together with the superior production rates we have announced in comparison to other wells in the region, will position us to conclude a third-party financing to advance our drilling programme in the near term.”
Compelling DT Ultravert data
Separately, the company also gave a brief update on its DT Ultravert well services technology, which has proven to enhance oil production in horizontal shale wells in areas previously impacted by well bashing.
Highlands described recent production data as “compelling”, highlighting that it has demonstrated a clear economic case for the application of DT Ultravert in both horizontal and vertical wells.
Price added: “Regarding DT Ultravert, I could not be more excited to update the market on our successful deployment of the patented anti-bashing technology in horizontal wells.
“The Permian Basin is the single most active shale play in the United States today and I feel confident that these technical and commercial results will catch the attention of our peers and colleagues across the shale oil and gas industry.
“DT Ultravert has now proven its ability to protect and enhance value for shale well operators in multiple environments."