Rose Petroleum (LSE:ROSE) advanced 12.4pc to 1.6p on Thursday after revealing a boardroom shift and placing to support the development of its North America-focused oil and gas portfolio. The business will appoint Robert Bensh to its board as executive chairman, while Tom Reynolds will also join as a non-executive director.
Bensh is an international energy executive with more than 20 years of senior management and board level experience. He has previously headed up and financed Oklahoma-based Condor Exploration, which Rose says he transformed into a 1,000boepd oil and gas operation within two and a half years. Rose said he will use his international capital markets experience to assist the organisation in developing its existing asset and looking at complementary opportunities. Meanwhile, Reynolds is a chartered engineer who has previously held a range of technical and commercial roles with BP, Total SA, and British Nuclear Fuels.
The pair’s addition to Rose’s board follows the news that David Sefton and James Berwick are no longer seeking to join the firm. Sefton and Berwick, well known to AIM investors for their involvement with Anglo African Oil & Gas, were named as Rose’s latest board members at the end of last month after being proposed by a group of shareholders.
Rose’s chief executive Matthew Idiens said: ‘I am delighted to welcome Rob Bensh as Executive Chairman and believe that his outstanding regional and operational expertise will be of great value to Rose as we look to optimise our portfolio and unlock additional opportunities in the upcoming months. Tom has been working with Rose on a consulting basis for the past six months and I am pleased he has agreed to join the Board to extend the capacity in which he can assist. I would also like to take this opportunity to thank Philip and Kelly for their service to Rose and wish each well for future endeavours.’
Elsewhere on Thursday, Rose said Bensh had subscribed for 25m of its shares at 1.1p each, raising £275,000. This gives the new chairman a 14.8pc stake in the firm. The cash injection will be put towards general corporate purposes, including the appraisal of identified investment opportunities with Rose’s current portfolio of business development projects.
Rose is earning into a 75pc working interest in c.80,000 net acres in the prolific oil and gas producing Paradox Basin in Utah. A CPR completed last year gave the Rose acreage covered by 3D seismic a 2C contingent resource, net to Rose, of 9.25MMbbl oil and 18.5Bscf of gas. This equates to an unrisked pre-tax net present value of $122m. The form has identified drilling locations in naturally fractured areas of the Paradox Formation and has chosen its first well location. It is now fully permitted and plans to begin its drilling programme as soon as possible, subject to rig availability and financing.
Rose’s strategy is to grow both organically and through acquisition. In Thursday’s update, it said it has identified a potential new opportunity in Texas, which could offer rapid production. The project involves drilling a sidetrack well off an existing vertical well with relatively low drilling costs. Rose has engaged an independent petroleum engineer to assess the project and the associated risks and believes it could produce at an initial rate of 350bopd. This would imply payback within approximately six months.
‘The company has developed an excellent working arrangement with the owner/operator who has access to a number of other similar projects which have the potential to act as a pipeline of projects for the company to build production in the near-term. For the avoidance of doubt the company does not currently have a binding agreement over this project,’ it added.