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Acquisition of Leases Prospective for CO2
Acquisition of Leases Prospective for CO2.
About this update from Chill Brands Group Plc
[{"type":"text","content":"\n \nRNS Number : 3182S Highlands Natural Resources PLC 25 June 2018 \n\nTHE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY HIGHLANDS TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 (\"MAR\"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE (\"RIS\"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.\n \n25 June 2018 \nHighlands Natural Resources plc ('Highlands' or 'the Company')\nAcquisition of Leases Prospective for CO2\n \nHighlands, the London-listed natural resources company, is pleased to announce that it has made application to acquire leases over 46,000 acres of land in Apache County, Arizona, which the Board believes to be prospective for commercial volumes of carbon dioxide (\"CO2\"). Grant of the leases is subject only to ratification by the State and Highlands expects this within the next two weeks.\n \nThe area sits adjacent to land which was identified as a target for future CO2 production by Kinder Morgan, one of the leading suppliers of CO2 to the Permian Basin. Plans had been developed to construct a pipeline from Apache County, Arizona to the existing pipeline network that provides CO2 for the Permian Basin. Pricing for CO2 in the Permian Basin is usually linked to the price of WTI oil and when it declined in 2015, Kinder Morgan announced that it would not pursue the build. The Company's acquisition and maintenance of the leases will be at minimal cost and therefore the Board believes that the recent sustained increase in oil prices signals the right time to acquire the C02 leases. \n \nCO2 is used in a broad range of applications, as described below, and the Board will commence discussions in due course with a range of potential end users to fund any drilling activity. Producers are often able to negotiate take or pay contracts and pricing floors to ensure recovery of their investment in CO2 supply sources. Of most immediate relevance to Highlands, CO2 is used in the oil and gas industry to extract in-place oil from pressure depleted wells. Importantly, the United States Department of Energy estimates that there are up to 83 billion barrels of technically recoverable oil in the United States Lower 48 states via CO2 enhanced oil recovery (\"EOR\").\n \nThroug...