TIDMHNR
RNS Number : 3916L
Highlands Natural Resources PLC
19 April 2018
19 April 2018
Highlands Natural Resources plc ('Highlands' or 'the
Company')
East Denver natural gas purchase agreement and operational
update
Highlands, the London-listed natural resources company, is
pleased to announce it has secured a natural gas purchase agreement
(the "Agreement") with a local pipeline operator for its East
Denver Project in Colorado. The monetisation of natural gas and
associated liquids from the project represents a further revenue
opportunity for Highlands, adding further upside potential to its
assets.
Highlands also updates the market on its progress at East Denver
and on the latest success of DT Ultravert to meaningfully enhance
production in horizontal shale wells.
Overview
-- Highlands to monetise natural gas at East Denver in H2 2018
following the execution of a natural gas purchase agreement
-- Latest production figures place Highlands' East Denver wells
in the top 3% of all Niobrara wells in Colorado and has generated
net revenues of US$3.8 million to 31 March 2018
-- The executed gas purchase agreement has paved the way towards
the finalisation of third-party funding to drill and complete
additional wells in East Denver. Negotiations are well advanced
-- Highlands has spud conductor casing on six new wells on the
northern Drilling and Spacing Unit ("DSU") ensuring that the
Company remains in compliance with previously announced drilling
timetables
-- DT Ultravert technology proven to enhance oil production in
horizontal shale wells in areas previously impacted by well
bashing
o Compelling production and flowback data demonstrates clear
economic case for application in horizontal and vertical wells
-- A corporate update presentation will be available on the Company's website later today
Robert Price, Highlands' Chairman and CEO, said: "This natural
gas purchase agreement will be highly accretive to the East Denver
project, which has already demonstrated its ability to perform at a
remarkable level of productivity and efficiency. This, together
with the superior production rates we have announced in comparison
to other wells in the region, will position us to conclude a
third-party financing to advance our drilling programme in the near
term.
"Regarding DT Ultravert, I could not be more excited to update
the market on our successful deployment of the patented
anti-bashing technology in horizontal wells. The Permian Basin is
the single most active shale play in the United States today and I
feel confident that these technical and commercial results will
catch the attention of our peers and colleagues across the shale
oil and gas industry. DT Ultravert has now proven its ability to
protect and enhance value for shale well operators in multiple
environments."
East Denver Gas Midstream Solution
Highlands has secured a natural gas purchase agreement (the
"Agreement") with a local pipeline operator, allowing Highlands to
monetise natural gas and associated liquids through efficient
pipeline infrastructure. The first gas deliveries under the
Agreement are expected in the second half of 2018.
The Agreement adds valuation upside to Highlands' assets by
allowing the monetisation of both oil and natural gas production
volumes on a long-term basis and therefore represents an important
step forward in the development of East Denver, as it paves the way
to finalizing Highlands' funding for drilling and completing
additional East Denver wells.
Until commencing pipeline sales, Highlands will continue to
process natural gas liquids ("NGLs") on-site at East Denver using
the Company's dedicated Mechanical Refrigeration Unit ("MRU") gas
processing system. The MRU has been an effective interim solution
for extracting valuable NGLs from produced gas.
East Denver Production Results and Operational Updates
The Wildhorse and Powell wells have produced a cumulative of
more than 190,000 barrels of oil equivalent (BOE) as of 31 March
2018. Based on five month cumulative oil production, Highlands'
wells rank in the top 3% of all Niobrara wells in Colorado.
Moreover, the wells have sustained production with minimal down
time since flowback commenced in the fourth quarter of 2017, which
is a testament to Highlands' dedicated engineering and operations
teams.
Highlands' share of net revenue from these two wells has now
reached approximately US$3.8 million after subtracting taxes,
royalties and partners' interests through 31 March 2018.
Significantly Highlands continues to achieve excellent commodity
pricing differentials, resulting in proceeds of approximately
$65/Bbl for oil and $0.70/gal for NGLs based on current commodity
prices.
In preparation for the next phase of drilling, Highlands has
spud conductor casing on six new wells on the northern DSU and will
remain in compliance with the amended drilling timelines under the
16 December 2016 Farm-In Agreement.
DT Ultravert Permian Basin Deployment
Highlands conducted a successful parent well protection
deployment of DT Ultravert in two horizontal wells in the Permian
Basin. Flow-back and production results were collected throughout
the first quarter of 2018, which Highlands and the operator have
now analysed.
DT Ultravert was deployed during the fourth quarter of 2017 in
two parent wells with a history of bashing and depletion-impaired
child wells. The data shows that the DT Ultravert-enhanced child
wells achieved an average of 15% more oil production over the first
30 days than child wells completed without DT Ultravert. Across the
dataset, Highlands observed a range of 10% to 19% production uplift
for DT Ultravert-enhanced child wells vs. non-DTU child wells.
These results establish a clear economic case for DT Ultravert use
in horizontal shale wells, as a 15% production enhancement can
amount to millions of dollars in preserved value over a well's
lifetime compared with DT Ultravert deployment costs in the
hundreds of thousands of dollars.
***ENDS***
For further information:
Highlands Natural Resources plc
Robert Price +1 (0) 918 361 7000
Cantor Fitzgerald Europe
Nick Tulloch +44 (0) 20 7894 7000
David Porter
Redleaf Communications
Elisabeth Cowell
Ian Silvera
Fiona Norman +44 (0) 20 3757 6880
Notes to Editors
Highlands (LSE: HNR.L) is a London-listed natural resources
company with a portfolio of high-potential oil, gas and helium
assets and technologies. The Company's core projects include:
-- East Denver Niobrara: a horizontal oil and gas project
targeting the Niobrara shale formation in a well-studied area of
the Denver Julesburg Basin. The project currently produces from two
wells, the Wildhorse and Powell, with additional drilling planned
in 2018.
-- DT Ultravert: a re-fracking and parent well protection
technology with four patents allowed and additional patents pending
in the United States and internationally. Highlands is advancing
commercial conversations with a range of oil and gas operators and
service providers to commercialize DT Ultravert technology.
-- Helios Two: a 220,000+ acre helium and natural gas prospect
in SE Montana with drilling and assessment operations ongoing.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFKFDKCBKDFQD
(END) Dow Jones Newswires
April 19, 2018 02:00 ET (06:00 GMT)
Chill Brands (LSE:CHLL)
Historical Stock Chart
From Apr 2024 to May 2024
Chill Brands (LSE:CHLL)
Historical Stock Chart
From May 2023 to May 2024