Rose Petroleum shares plunge as company abandons conventional target in Utah project

31st Mar 2015 15:48

Shares in Rose Petroleum plummeted on Tuesday, after the oil and gas explorer said that attempts to tap the deeper reserves on its Mancos Shale project in Utah had been abandoned.The London-listed company said that while early results of the drill core from its State 1-34 in the Uinta Basin showed good natural fracturing and positive organic content between 2% and 4.5%, drilling into the deeper reserves was deemed not commercially viable.Rose added that the project remained its primary target and that, upon completion of core analysis, it will be will be integrated with the Halliburton and Weatherford's open hole well log data and mud log data."The unconventional Mancos shale play has always been our prime target and where the significant potential of our large acreage position lies," said group chief executive Matthew Idiens."While we hoped that the conventional target could have delivered us quick, albeit small, production, it was always seen as a bonus opportunity.Analysts at FinnCap said they had not factored in the conventional interval in their initial valuation, adding they had no reason to downgrade their 'buy' rating on the stock."This play was considered to be a "nice to have" rather than a "have to have" in terms of the resource base," said FinnCap analyst Dougie Youngson.Rose shares were down 17.45% to 1.47p at 16:20 on Tuesday.