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Rose Petroleum defers close of Colorado acquisition to year end

"Rose is now positioned as a clean, low-overhead, unlevered and value-focused vehicle from which to build,” said chief executive Colin Harrington

Rose Petroleum PLC - Rose Petroleum defers close of Colorado acquisition to year end

Rose Petroleum PLC (LON:ROSE) told investors it has agreed to defer completion of the acquisition of an interest in the McCoy lease in Colorado.

The company now has until December 31, 2020, to asses market conditions before making an investment decision. The group said the extension was agreed without any additional financial costs.

Rose also announced that it has implemented a further cost cutting programme in order to maintain financial flexibility during the coronavirus pandemic which includes significant reductions in the cash compensation for directors and the executive management team.

READ: Rose Petroleum agrees deal to acquire Denver shale asset

"During these challenging times, I'd first like to reiterate that our primary concern is the safety of all the company's stakeholders and employees,” Colin Harrington, Rose chief executive said in a statement.

He said the group's “focus has been to protect the company and its existing assets by implementing further cost reductions, which will enable the company to continue trading effectively for the foreseeable future while retaining its operational focus and capability."

“This objective has now been achieved, and the work undertaken in the last 12 months to restructure the group - and in particular the land position and cost structure of the Paradox project - has proved to be absolutely critical as we position the company for the future. 

“With no debt, very low fixed costs and no near-term capital commitments, Rose is well-positioned to weather the fallout occurring across all sectors of the economy, and particularly ours,” Harrington added.

Looking to growth and its pending reboot the Rose boss noted that its planned name change, to Zephyr Energy, reflects wholesale changes made in the last 12 months.

Harrington also noted that there are challenges and disarray in the US oil and gas industry, but said he believes attractive, value-additive acquisition opportunities exist for the company.

"Rose is now positioned as a clean, low-overhead, unlevered and value-focused vehicle from which to build,” he said.

Quick facts: Zephyr Energy PLC

Price: 0.625 GBX

Market: LSE
Market Cap: £1.79 m

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