(MENAFN - ProactiveInvestors - N.America) Rose Petroleum PLC (LON:ROSE) has moved to 'substantially de-risk' the business following a strategic review of its portfolio of assets in Utah that caps costs and decommissioning liabilities.
In a stock exchange statement the company said it was terminating its earn-in agreement governing ownership of its Mancos acreage.
It has also agreed with Rockies Standard Oil Company to hand back the Cisco Dome field wells pipelines gas tap gas plant and all the equipment.
Rose will cover the plug and abandonment costs of four wells put at US$320000 and leave operator bonds in place with the State of Utah and the Bureau of Land Management.
It means the company is now not responsible for decommissioning a further historic 50 wells in the vicinity.
The company will now focus on its Paradox acreage where the earn-in threshold falls by US$2mln to US$5.5mln.
Remember the Paradox asset is counts for around 1.1bn of the 1.8bn un-risked recoverable prospective resources ascribed to Rose in Utah.
Chief executive Matthew Idiens said: "The amendment to the earn-in agreement has given us the opportunity to substantially de-risk the oil and gas portfolio and we can now focus on the Paradox acreage with in excess of one billion barrels of oil and which we believe has a greater chance of success than the Mancos.
'The amendment also means we have eliminated the group's plug and abandonment liability which became an increasing issue as market conditions declined and gives us the opportunity to further reduce the underlying operational cost base.
'In the current market conditions and taking into account the general outlook the board believes this is the best course to follow.
"We have combined this with implementing dramatic cost cuttings throughout the Group and feel we are now well positioned for both the present and for a future upturn.
'Rose has always retained a diverse portfolio of assets to enable it to adapt rapidly to changing market conditions and we continue to believe that even in these challenging markets there are opportunities to create value for our shareholders."
Separately Rose said it had found a partner for the Ardmore copper project made up of 18 mining claims north of Tucson Arizona.
Privately-owned Burdett Gold has made a modest cash payment while the AIM-listed exploration group will retain a 15% net profits interest on the claims.