Rose Petroleum (LON:ROSE) told investors it believes it is now well-positioned to maintain its existing assets, amid current low oil prices.
It is, however, also confident that it can take advantage of potential acquisition opportunities arising from the currently challenging environment. And it has hired Jefferies International and Wellford Capital Markets to help it evaluate and fund possible deals.
“The board continues to assess opportunities to introduce productive assets to Rose's portfolio,” it said in its interim results statement.
“The board believes the current environment provides an opportunity to acquire high quality assets with stable income which are non-core to other companies.”
Rose says it has identified the Marcellus, DJ Basin, Eagle Ford, and Permian as key target basins.
Of these North American plays, it says the DJ - Denver-Julesburg - basin is the prime focus due to the existing team’s significant operational knowledge and experience.
At the same time, in terms of its existing assets, Rose has narrowed its focus on one area initially - rather than a wider programme envisaged previously – as the company aims to “deliver value while prudently conserving cash”.
In this permit, in the Cisco Dome area, Utah, the company has been advancing planning and permitting for a horizontal well.
The company added that it has been holding active talks with a number of third parties for funding the programme, and once the permitting process is complete it expects the talks will be accelerated in order to secure funding.
Rose also owns mining operations, in Mexico, and it said that ore production had by the end of the first half reached the forecasted rate of 100 tonnes per day.
Some 10,286 tonnes were mined during the six month period, and of that 8,385 tonnes were processed - yielding 1,128 ounces of gold and 8,670 ounces of silver.
The company added, however, that the operational efforts have been overshadowed by a continued decline in metal prices.
Lower prices and low recoveries have put strain on the operation, Rose cautioned, and it added that it is keeping the performance of the mining operation under continual review.
Group revenue, generated primarily through mining, amounted to US$1.2mln for the six months period down from US$2.3mln in same period of 2014.
Rose reported a net loss of US$6.1mln, compared to a US$1.8mln loss in the first half of last year.
There was a US$2.34mln impairment related to one of the company’s American copper subsidiaries – which has been inactive, and are on ‘care and maintenance – and it also reported a non-cash charge of US$0.97mln relating to the issue of share options.
Rose told investors that the full impact of the current group reorganisation and cost reductions will be visible in 2015’s full year results.
At the end of June, Rose had US$6.1mln of cash and equivalents. And it said that current cash is US$4mln.
“Shareholder returns remain the Board's principal objective and we believe that with active stewardship, we can not only preserve our assets in the current market conditions, but also take advantage of opportunities within the sector as they arise,” Rose said.