Rose Petroleum’s primary asset, approximately 80,000 net acres oil and gas asset located in the Paradox Basin in Utah, USA, in which it is earning into a 75% working interest.

Overview

  • Oil and gas asset located in the Paradox Basin in Utah, USA
  • Earning 75% working interest in over 80,000 net acres, including a 75% working interest in an additional 3,320 gross acres (2,490 net) acquired in April 2018
  • Targeting the Paradox Clastics Formations (multiple target levels) and Leadville Limestone
  • Completed 3D seismic shoot over 40 sq miles within the Gunnison Valley Unit in October 2017 to identify drill targets in the Paradox Formations (fracture swarms) and additional potential within the Leadville Limestone (directly below the Paradox formations)
  • A Competent Person’s Report by Gaffney Cline & Associates, published in June 2018, determined gross contingent resources (2C) of 15.61 million barrels of oil and 31.23 billion cubic feet of gas with a NPV net to Rose of US$122.4 million. That report focused solely on the area covered by a 3D seismic survey, completed in October 2017, of approximately 17,250 acres and focused solely on the single Cane Creek reservoir (Clastic 21)
  • The report shows an upgrade from Prospective to Contingent Resources for Clastic 21 within the specified area. This is due to the ability to tie the 3D seismic data into the producing well 28-11 and map the maximum extent of the producing field within this area. The initial appraisal wells are designed to test the viability of the fracture network and to potentially prove the extent and commerciality of the field
  • Further details of the CPR report are available on this website in the Investors Area, under Latest Press Releases
  • Previously, in 2014, the independent consultant Ryder Scott reported net un-risked prospective recoverable resources of over 1.1 billion barrels of oil and up to 2.2 TCF cubic feet of gas within the Paradox Formations
  • Extensive infrastructure in place including road, rail, gathering and major gas pipelines and oil refineries in close proximity
  • A farm-in process to involve potential development and financial partners continues – now supported by the CPR independently validating the geological and economic strength of the project.

Strategy

1

3D acquisition has been completed and the initial results of the interpretation have identified more than 60 well locations within the leasehold targeting the Cane Creek reservoir zone.

2

Drilling to target interception of the natural fractures (no fracking required) with strong IP rates

GEOLOGY

In May 2014, the Utah Geological Survey (‘UGS’) conducted an in-depth study of the Paradox Basin focusing on the Cane Creek clastic interval of the Paradox Formation. The aim was to gain insight into the properties of the Cane Creek and further define the characteristics of the reservoir.This study is of direct relevance to Rose given that the UGS drew substantially on Fidelity’s work in the area.

The UGS reports that the Paradox Formation is composed of up to 29 depositional cycles related to alternating periods of marine flooding and evaporation events. Clastic rocks deposited during these cycles contain fragments or clasts of pre-existing minerals and rock. These resulting interval are composed of interbedded dolomite, dolomite siltstone, anhydrite and crucially, organic rich shale. The clastic intervals are separated by thick salt deposits which provide a perfect seal that traps oil that was generated from the organic shale. The Cane Creek is historically the best producer of these clastic reservoirs and is believed to be part of cycle number 21.

The Paradox Formation is estimated to be up to 4500 feet thick in the area where Rose recently acquired it’s Gunnison Valley 3D seismic survey. Most of current production from the Cane Creek is in the central area of the basin called the Big Flat area where Fidelity’s original leases are located. The Cane Creek is deeper in the northern part of the basin where Rose’s acreage is located.

The Cane Creek productive fairway trends northwest to southeast. The clastic gross thickness averages 90 feet and can be divided into three clear intervals (A, B and C). In some areas, the gross thickness is over 120 feet thick. Of particular interest is the B interval with organic rich shale and natural open fractures bounded by anhydrite seals within the A and C intervals. Union Pacific Resources has reported that the total organic content of the B interval in its Remington 21-1H well was an average 12% over a 29 feet interval which is exceptionally high, although the logs indicated that there were no open fractures.

Production in the Cane Creek interval

CANE CREEK INTERVAL

The Utah Geological Survey (UGS) states that there are five producing fields in the Cane Creek zone (Paradox Formation) which have produced over 5.4(7.9) million barrels since the 1960s. One of the most prolific wells in the formation is the Cane Creek 12-1 well drilled by Fidelity in 2012, in the Big Flat Field. This well produced over 437,000 barrels (averaging 1,199 bopd) in 2013 alone and has accumulated 933,000 bo to date.

Other producing wells which are concentrated in the central area of the play include the old vertical well, Long Canyon-1, which has been producing since 1962 and has cumulative production in excess of 1.1 million barrels of oil. This well produced as recently as 2013.

Kane Springs Fed 10-1 on the Hell Roaring Field is a vertical well producing since 1992 and has recorded over 667,049 bbls of cumulative oil production to date. In addition, the Fidelity-drilled, Kane Springs 27-1 also has recorded cumulative production of over 527,000 bbls oil.

Fidelity produced nearly 1.0 mmbbls from the Cane Creek zone in 2013 from an aggregate 15 wells. In addition to the prolific 12-1 well, other wells including CCU 18-1, CCU 36-1 and CCU 26-3 which came on stream in 2013 demonstrated initial flow rates of 800 – 1,200 bopd. These well results illustrate the economic potential of the Cane Creek zone in this area of the Paradox Basin.

LEADVILLE LIMESTONE INTERVAL

The Leadville Limestone lies underneath the Paradox Formation and the Cane Creek Interval and is a potential additional target, as yet untested in our acreage. The Salt Wash Field currently produced from the Leadville Limestone and has cumulative production of 1.6 MMBO and 11.7 Bcf of gas. It is located just three miles SW from Rose’s acreage and our recently completed seismic shoot.

Kirkwood resources, which acquired Fidelity’s Paradox acreage, is currently drilling the CCU #8-2-26-20 well in the Cane Creek Unit and has plans to drill up to 2 more wells this year.