COP ConocoPhillips

By Alex MacDonald

LONDON--Highlands Natural Resources PLC (HNR.LN) said Monday it will pay $500,000 to Renegade Oil & Gas Co. for rights to drill up to six horizontal wells on the Niobrara shale formation in the Arapahoe County, Colorado, U.S.

The U.K.-listed natural resources company will keep 80% of the revenue generated from these wells with the remainder going to Renegade and the State of Colorado.

In parallel, Highlands has started discussing with several industry partners the joint financing and development of the six wells.

"These discussions are now at an advanced stage such that Highlands believes that it can commence drilling by the end of 2016," the company said.

Highlands said the majority of ConocoPhillips's nearby horizontal wells produced between 50,000 to 100,000 barrels of oil in their first six months of production.

A well producing more than 50,000 barrels of oil in its first six months would rank among the top 12% of all horizontal Niobrara wells based on 2,943 wells surveyed in May, Highlands said.

-Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

July 25, 2016 03:31 ET (07:31 GMT)

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