What happened to the Red Emperor Resources share price?
At the time of writing, shares of Red Emperor Resources NL [ASX:RMP] are up by 5.71%, to 3.7 cents per share. Red Emperor Resources is an exploration company listed on both the Australian Securities Exchange and Alternative Investment Market [AIM:RMP]. Red Emperor has oil and gas interests on the Alaska North Slope and in South East Asia
Why did Red Emperor Resources share price do this?
The company announced earlier in the week that it, along with its consortium partners (88 Energy [ASX:88E] and Otto Energy [ASX:OEL]), has executed formal ‘Definitive Agreements’ to acquire and drill a large oil prospect on the prolific Alaska North Slope.
The project is called the ‘Western Blocks’.
What now for Red Emperor Resources?
These leases look the real deal…
The primary drill target lays immediately adjacent to, and offers similar characteristics to, the successful Horseshoe-1/1A oil well drilled in 2017. Horseshoe is part of the billion-barrel plus Nanushuk oil play fairway ― and it’s considered the largest discovery in over three decades in the US. Geologists familiar with the North Slope said the discovery could be a game-changer in Alaska, tapping a long-overlooked, relatively shallow formation.
The ‘Western Blocks’ offers significant untapped potential.
The best news: Red Emperor Resources should own a decent chunk of it:
Source: Red Emperor Resources
The first well is estimated to cost roughly US$15 million (100% dry hole cost), where Red Emperor’s share would be US$5.25 million of the total. The company held AUD$10.4 million in the bank at 30 June. In other words, it should have enough money for its share of the well and the transaction costs associated with it.
Drilling should start early next year.
And if the company taps the mother lode, the share price should explode…
Resources Analyst, Markets & Money
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