#ROSE quick update
Sorry for grammatical mistakes, my fingers are frozen, but I want to get this out.
Today’s RNS has been woefully misunderstand by the market,
so I thought I would put up a quick Blog on the subject.
Bad news re Paradox but not totally unexpected. It would
have been great to have utilised the paradox hole and this was always the plan
for the company to meet its aim of production in H1. That the hole is not sufficiently
usable is a pain.
The copper project, is a none issue in my opinion. ROSE is
not a commodity explorer or miner and all of these assets should be offloaded
over the coming 24 months.
Now on to the all important Mancos drill. This was a less
than 50% COS and to be honest I want very hopefully that it would hit enough
oil reserve to be economical vertically. For me it was all about the lateral
drilling and I just wanted to see sufficient vertical pay zone to allow for
that. There was always the chance (20% or so) that it would be economical
vertically as a few holes are in that region.
I spent a great deal of time studying the Mancos and Paradox
geology and existing drills over the summer. If we compare the findings from
the hole to the existing high calibre/high producing drills in that area we get
a similar arrange and size of pay zones to the Rose drill.
The BOD have clearly stated that they will be producing in
H1 (I am hearing May), initial thoughts as mentioned above, are that this would
be from Paradox, however given that Paradox is no, it must mean they know they
will see production from Mancos. There isn’t time to drill a second hole, so
this must be from the existing Mancos drill. There is no doubt that the hole
has flowed.
So what are we looking at ? This is only my opinion but my
estimate is that this hole is around 2000 bopd when laterally drilled and
250-300 bopd from the vertical.
I might be proven wrong, but this is the figure I get from
similar Mancos drills. So will ROSE be producing 2000 bopd by end of H1 ? very
possibly. With further drills likely an MCAP of £150-200m would be supported,
given current oil prices.
Rose has suffered from the fall in oil price and rightly so,
it could have been a total bust if the Mancos drill wasn’t so successful and
could have fallen to .5 to .8p. It hasn’t and with the stabilisation of the oil
price now is the time to buy into ROSE.
excellent piece. happy to top up. for mcap around 150-200m, whats the sp we are looking at?
ReplyDeleteMcap of 200m would give a share price of around 0.13p.
ReplyDeleteBroker targets have varied from .12p to £1.08p - all depends how many producing wells we have. With the huge Manos acreage I would expect 100's of wells.
Completely agree 150 to 200 mln market cap is spot on I think and very smart money will be buying in here, 2000 bopd.....welcome to the big boy league Rose, awesome news and oilers who know they stuff know where this is going....6p soon here, I will be buying in big tmrw market open, want to pick as many up sub 4.25p here (52 week high), traded there before this amazing news so makes sense to me. Wow, great times ahead here. Well done holders.
ReplyDelete12p broker target looks vunerable
ReplyDeletewas it not the fincap target of 12p is "risked" target (ie without discovery of oil), if so, with the oil discovery, the target would be lots higher (Fincapp may revive up their price target once ROSE provides more details in the future/next month? another broker saying should we proven oil there, the target would be around £1 plus.
ReplyDelete