Rose Petroleum PLC (LON:ROSE) Chief Executive Officer Matt Idiens caught up with DirectorsTalk to discuss the highlights from their interim results, the Paradox project, opportunities in Cuba and being well-positioned for the year ahead
Q1: So Matt, interim results just out, could you talk us through the highlights of the results?
A1: The highlights really give us an opportunity to outline clearly our objectives going forward. The past 6 months, as we’ve mentioned in the results, really we were cleaning of house, making sure we were set for the future and I think we’ve done a great job in that, massive cost cuttings, and now we have a clear line of sight on the opportunities available to us and our three-fold objectives.
Q2: Would you be able to give us an update on Paradox and your mining operations there?
A2: Yes, so as we stated the Paradox basin in the US, in Utah, is our oil and gas asset and at present we are working on permitting a 61 square mile 3D shoot, we have a report from Ryder Scott showing the prospectivity of it with un-risked recoverable resources of 1.1 billion barrels of oil so there’s a significant opportunity there.
We disposed of our Mancos and Cisco Dome assets as a result of the potential liabilities that lay with them and now we’re clearly focussed on the Paradox which we believe is a far better opportunity, the Paradox is basically a salt layered basin with hydrocarbons set between the salt plastics, highly over-pressured and the basin has been exploited by Fidelity, which recently was sold to a new owner. Operations by Fidelity were usually successful, they unlocked the basin so to speak by showing that you shoot 3D, you identify natural fracturing and then you drill into those intercepting those natural fractures which gets you great IP rates, I think in 2012, one of the wells that Fidelity drilled was literally the highest IP rate in the US on-shore so you can see the scale of it.
So we are planning to get that permit sorted, we’re in the process of getting the cultural and environmental assessments completed, which I think is done and in and under review by the BLM, so progress is being made on that front.
On the mining side of the things, in Mexico we converted our mining operation to toll milling at the SDA mill last year when the gold price was quite weak and mining costs and transportation costs were just too high for the operation to sustain, we obviously, everyone knows, saw a rebound in the gold price and I think that’s probably going to go further. So our plan now is to take advantage of the multiple opportunities that are available in our area, in the Nayarit area in Mexico and we are presently looking at tying up some new joint ventures with new projects near the mill, reducing the transportation costs which was a bit of a killer for us on our Mina Charay project and hope to be able to bring out some news on that relatively shortly, that will then give us some sensible cash flow which would help to fund the rest of the group’s operations.
Q3: Now you’re planning to push further into Cuba, could you explain the opportunity there?
A3: Earlier in the year Earth Source made an investment, $1.2 million, specifically to review an opportunity in Cuba, that opportunity as we’ve announced is a gypsum project, it’s a government project obviously in Cuba, and that is to build a manufacturing facility to produce wall and ceiling panels and associated products with gypsum which is basically plaster for internal walls for the Cuban market. The tourism in Cuba is growing exponentially, embargos potentially being lifted in the future, the place is a huge growth opportunity and with 21 hotels presently proposed to be built there’s obviously a significant amount of internal walls that need to be supplied and we would be the sole supplier if we are successful in negotiating our transaction.
Q4: Do you feel that Rose Petroleum are well positioned for the year ahead?
A4: Yes well it’s been a grim couple of years with the oil price and the gold price and commodities as a whole struggling a wee bit, it’s not the best sector to be in but I think actually the future looks fairly bright now, the gold price is recovering, oil price again there could be some good news on the horizon and I think things beginning to look better. We’re certainly in a position internally now, we’re much stronger, we’ve got cost under control and we’re looking pretty healthy going forward so I think yes, on those three-fold opportunities I think our future looks bright for us really.
