TIDMHNR
RNS Number : 7233N
Highlands Natural Resources PLC
11 August 2017
11 August, 2017
Highlands Natural Resources plc ('Highlands' or 'the
Company')
Commencement of Drilling at East Denver Oil and Gas Project
and Admission of Ordinary Shares
Highlands, the London-listed natural resources company, is
pleased to announce that it has successfully mobilized and
assembled a horizontal drilling rig at its East Denver Niobrara
Project ("East Denver"), a shale oil and gas project in Colorado,
and commenced drilling its first well on 10 August, 2017. Based on
strong shareholder uptake in the Open Offer completed 31 July,
which was not previously included in the Company's budgets, the
Company has been able to achieve meaningful operational advantages
by spudding two wells in series. The Company will first drill and
set approximately 2,100 feet of surface casing for the Wildhorse
5-64 15-16-1BHZ ("Wildhorse"), which is designed to target the
Niobrara B horizon, then immediately shift the rig to drill and set
surface casing for the adjacent Powell 5-64-15-16-1CHZ ("Powell")
well, which targets the deeper Niobrara C formation. The Company
will then continue drilling out the remainder of the deeper Niobara
C Powell well, which will let the Company gain valuable data about
the shallower Niobrara B on the way down. The well cost of the
Powell and Wildhorse are essentially equal, and this enhanced
drilling plan will allow Highlands to drill the remainder of the
Wildhorse well in due course with the benefit of additional
geologic data obtained in the Powell well.
Drilling and casing the Wildhorse's surface casing is expected
to take several days, walking the rig to the Powell well will take
approximately one day, then drilling operations for Powell are
expected to last approximately two weeks with a targeted Total
Depth ("TD") of 18,247 ft representing the total vertical and
horizontal distance drilled in the well. The Company will update
the market of significant milestones throughout this process.
Highlands will shortly upload photographs of the drilling rig
and location under a new "Media" page on the Company's website.
Highlights:
-- Wildhorse well spud on 10 August, and will drill and set surface casing to 2,100 feet
-- Subsequently, Powell well will spud with an estimated two-week drill-time to TD
-- Company to benefit from additional geologic data obtained in
the deeper Niobrara C well before drilling the shallower Niobrara B
well
-- Drilling rig employs state of the art equipment that is
optimized for drilling the extended lateral wells designed for the
East Denver Project
-- Highlands has completed its pre-spud operational plans in
collaboration with industry-leading consultants and contractors to
minimize operational risks
o Includes interpretation of 3D seismic data, well path design
and drilling prognosis
-- East Denver Project targets the proven Niobrara shale oil and gas reservoir
o Successful horizontal wells are producing within two miles of
Powell
o Gross 1P Proved Reserves of 424,167 Barrels Of Oil Equivalent
Per Well (most conservative case from RPS CPR dated 6 January
2017)
o Gross 2P Proved plus Probable Reserves of 539,667 Barrels of
Oil Equivalent Per Well (mean statistical case from RPS CPR dated 6
January 2017)
o Wells offer potential rapid cash flow, with average
anticipated payout period of 15-17 months (RPS CPR dated 6 January
2017)
-- Highlands will release plans and updates regarding additional drilling in due course
Highlands' Chairman and CEO Robert Price said, "This is a major
milestone for Highlands. Drilling is now underway at our first East
Denver well, and I have the utmost confidence in Highlands'
technical team as well as the group of industry-leading consultants
who we have assembled around the East Denver Project. Given that
our drilling location is located within two miles of highly
productive horizontal wells in the Niobrara shale coupled with our
third-party engineers' confidence in East Denver's reserves, we are
incredibly excited to see the result of our first well in a
potential 24 well drilling programme. If successful, we look
forward to delivering our shareholders' first oil, first gas, and
first revenue."
Issue of Shares
Highlands is also pleased to announce that certain of its
professional advisers have agreed to accept new ordinary shares in
lieu of cash fees, thereby enabling the Company to devote more of
its cash resources to the East Denver Project. Pursuant to these
agreements, application has been made for 1,800,000 new ordinary
shares to be admitted to trading on the Official List of the UK
Listing Authority by way of a Standard Listing and to trading on
the London Stock Exchange's Main Market for listed securities. It
is expected that such admission will occur at 8.00 a.m. on 16
August 2017.
Following admission, the New Ordinary Shares will rank pari
passu in all respects with the existing ordinary shares of 5 pence
each in issue including the right to receive all dividends and
other distributions declared and the total number of ordinary
shares in Highlands with voting rights will be 96,705,084. This
figure may be used by Highlands shareholders as the denominator for
calculations to determine if they have a notifiable interest in
Highlands under the Disclosure and Transparency Rules, or if such
interest has changed.
THIS RELEASE CONTAINS INSIDE INFORMATION.
**ENDS**
For further information, please visit www.highlandsnr.com, or
contact:
Highlands Natural +1 (0) 303 322
Robert Price Resources plc 1066
Cenkos Securities +44 (0) 131 220
Nick Tulloch plc 9772
+44 (0) 131 220
9771 /
Cenkos Securities +44 (0) 207 397
Neil McDonald plc 1953
St Brides Partners +44 (0) 20 7236
Lottie Brocklehurst Ltd 1177
St Brides Partners +44 (0) 20 7236
Hugo de Salis Ltd 1177
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 farm-in opportunity for horizontal
oil and gas wells targeting the Niobrara shale formation in a
well-studied area of the Denver Julesburg Basin.
-- DT Ultravert: a re-fracking and parent well protection
technology with one patent granted and additional patents pending
in the United States and internationally. Highlands is advancing
commercial conversations with a range of oil and gas operators to
create revenue-sharing opportunities for DT Ultravert
applications.
-- Helios Two: a 105,000+ 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
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