--ADDS BROKER COMMENT--
Early analysis of the drill core from its first well at Mancos, State 1-34 in the Uinta Basin, indicated good natural fracturing, positive total organic content between 2.0% and 4.5%, strong residual and moveable hydrocarbon volumes and good storage capacity.
Drilling into the deeper conventional intervals was deemed not to commercially viable but Rose emphasised that the Mancos Shale was the primary target.
When the core analysis is completed it will be integrated with the Halliburton and Weatherford's open hole well log data and mud log data for a comprehensive analysis of the Mancos.
The company’s assets are there estimated to contain 709mln barrels of oil and 4.26 trn cubic feet of gas (TCFG).
Rose wants to drill six wells on the prospect and is now preparing the appropriate permit applications for the remainder.
Matthew Idiens, chief executive, said: "The unconventional Mancos shale play has always been our prime target and where the significant potential of our large acreage position lies.
“While we hoped that the conventional target could have delivered us quick, albeit small, production, it was always seen as a bonus opportunity.
“It is important to emphasize that the outcome of the conventional well in no way takes anything away from the potential of our core focus, the Mancos shale. We look forward to keeping the market updated on our progress."
FinnCap analyst Dougie Youngson highlighted that he had not previously factored in the deeper conventional play, so there was no reason to change his ‘buy’ recommendation or 12p price target now that the test wasn’t successful.
“This play was considered to be a “nice to have” rather than a “have to have” in terms of the resource base,” he said in a note.
On AIM, Rose Petroleum shares fell 0.4p, 22%, to trade at 1.38p each.