Range Resources Limited (‘Range’ or ‘the Company’)
9 May 2016 Royalty rates reduced in Trinidad
Range is pleased to announce that it has signed an agreement with the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin") to reduce the overriding royalty rates ("ORRs") on the Company's producing Morne Diablo, Beach Marcelle and South Quarry fields in Trinidad.
The revised ORRs will apply when the received oil price is below US$50 per barrel. The changes will be effective from 16 March 2016 and will apply retrospectively to sales made from 1 February 2016 onwards.
Assuming a WTI price of US$45 per barrel, this change would have minimal net revenue1 benefit to Range at current production levels. However, the impact will progressively increase at higher production levels with the net revenue benefit estimated to be approximately 7% at 2,500 bopd, assuming the same oil price.
The reduced ORRs are particularly encouraging for operators like Range who are committed to growing their production in Trinidad over the coming years and are a welcome incentive introduced by Petrotrin during this period of sustained lower commodity prices.
Range also notes the comments by the Honourable Colm Imbert, the Minister of Finance of Trinidad and Tobago, in the 2016 Mid-Year Budget Review held on 8 April, 2016 that the Government intends to review the level of Supplemental Petroleum Tax (SPT) on crude oil prices moderately higher than US$50 per barrel. This review is anticipated to be completed by September 2016.
It is very sad about the fires in Canada but just shows you have to look at the whole picture.
Just when the fundamentals look like getting the oil price down, another random act puts the mockers on it and up it goes again. Yesterday the EIA announced that inventories had built at a much higher level than expected, +2.8m barrels against the +560/- whisper. With a build also at Cushing and an unexpected rise in gasoline stocks it was a clean sweep for the bears until news came through from Fort McMurray in Canada, the home of its oil sands industry. The dreadful fires there have led to most of the population being evacuated and that included workers for Shell and Suncor amongst others. Canada produces a little under 2.5m b/d from oil sands and whilst it is unlikely to be offline for long it was all the bulls needed. Prices had risen when the news came through only to be hit by the EIA but overnight the news from Canada worsened and this morning WTI, clearly most affected, is up to $45.18 as I write with Brent tagging along up to $45.70.
Range Resources Limited 5 May 2016 The Company advises that 146,533,850 unlisted options, exercisable at £0.04 on or before 30th April 2016 and 7,058,824 unlisted options, exercisable at £0.17 on or before 30th April 2016 have expired. None of these options were exercised prior to expiration
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