Highlands Natural Resources shares rise on farm-in agreement

Shares in Highlands Natural Resources jumped on Monday after saying it has entered into a farm-in agreement with Renegade Oil & Gas Company in Arapahoe, Colorado.

The deal will allow Highlands to drill up to six horizontal wells in acreage prospective for the Niobrara shale formation. Highlands is paying $500,000 to Renegande, including an initial payment of $250,000 for the right to drill the first two wells and a second payment of $250,000 for the following four.

Highlands will retain a 100% working interest, which means full responsibility for drilling and operating costs, and will receive 80% of revenue generated by the wells.

The company also said it in advanced talks with several industry partners regarding the joint financing and development of the farm-in acreage.

Shares rose 9.55% to 29.99p at 1445 BST.