Rose Petroleum completes work on State 16-42 Paradox well

17th Dec 2014 13:18

Rose Petroleum has taken its first step towards establishing production in the US, announcing completion work on the State 16-42 Paradox well in Utah.In a project update released on Thursday, Rose said it had pressure tested the well's casing to 5,000 psi, switched the wellhead from shut-in to completion mode, and has run slick-line down the casing to confirm the top of the plugged back depth of the well and that the well is free of any obstructions.The firm anticipates that the first zone of interest will be perforated and flow tested by 20 December.John Blair, director of oil and gas at Rose, said: "The initiation of completion operations of Rose's State 16-42 Paradox well is the first major step in establishing operations on Rose's Paradox assets. Other than production, the importance of the vertical completion in the 16-42 well is to test the potential pay zones for future drilling of new wells, which will be located using our 3D seismic data."When completed, this will enable horizontal legs to be drilled and completed and therefore demonstrating the full potential of the basin."As this is being completed as a vertical well, versus a horizontal completion, Rose does not anticipate the production rates to be on the same order of magnitude as a horizontal well but will nonetheless be a significant first step in the process of developing our Paradox assets."The group's progress prompted an upgrade from City broker finnCap which repeated a 'buy' recommendation and lifted the price target from 7.5p to 12p, highlighting that Rose is now moving from exploration into the production development stage.Rose owns nearly 80,000 gross acres in the Paradox Basin and over 245,000 acres collectively between the Paradox and the adjacent Uinta Basin Mancos play.The broker estimates that the Mancos asset is worth almost $594m, and Paradox worth $934m based on an oil price of $60 per barrel.As of 13:38 on Wednesday, Rose's share price skyrocketed 28.33% to 1.73p per share.