Rose Petroleum release results from MDU in the Paradox Basin
Rose Petroleum (“Rose”), (AIM Ticker: ROSE), has noted that MDU Resources Group Inc. (NYSE: MDU) yesterday reported its first quarter earnings. It is of particular interest to note the activities of its oil & gas subsidiary Fidelity Exploration and Production Company (“Fidelity”) which operates in the Paradox Basin, Utah, directly south of Rose’s acreage within the basin.
Rose’s wholly owned subsidiary, Rose Petroleum Utah LLC, has recently acquired a 75% working interest in 195,000 acres, together with a 75% interest in one shut-in well in the Paradox Basin.
Highlights from MDU’s results:
· MDU stated that the Paradox Basin is its fastest growing oil producing area with a production increase of 121% compared to the first three months of last year
· Ultimate recoveries (depending on lateral lengths) are estimated at 1.5MMBO per well
· The Cane Creek Unit 12-1 well continues to exceed expectations with the well still flowing over 1,000 BOPD gross
· Anticipated that this field will play a key role in the company’s oil growth strategy
MDU reported that it currently owns approximately 130,000 net acres of leaseholds in the Paradox Basin, Utah and expects to further expand its acreage in the basin.
The company also stated that it was seeking to increase capital expenditure. With longer lateral lengths estimated ultimate recoveries are expected to increase with the upper range now at 1.5 MMBO per well.
The Cane Creek Unit 12-1 well continues to exceed expectations with the well still flowing over 1,000 BOPD gross. It is anticipated that artificial lift facilities will be installed in the near future. Cumulative production is 690 MBO.
Fidelity’s net oil production in the Paradox Basin for first quarter was approximately 3,575BOPD, up 121% from first quarter 2013 and 22% higher than fourth quarter 2013. Current production is approximately 3,900 BOPD.
Finally, MDU added that Fidelity’s understanding of this play and the quality of the play continues to improve. It is anticipated that this field will play a key role in the company’s oil growth strategy.
Matthew Idiens, CEO said, “MDU’s update reaffirms what we firmly consider to be one of the most exciting oil exploration plays, onshore USA. We have consultants Ryder Scott Company, which has prepared Fidelity’s reserves report, preparing a CPR for Rose, which will be announced in due course.”