LONDON (Alliance News) - Range Resources Ltd Wednesday said it plans to drill a development well on its acreage in Trinidad early next month and said it has reviewed its workover programme in the country to focus on the "most economic" wells.
Range is the operator of five blocks onshore Trinidad, where all of the company's current production comes from and is aiming to add 500 extra barrels per day to its production this year through its drilling and workover programmes.
In 2015, Range produced a total of around 205,000 barrels of oil from its acreage in the country and has a full year guidance figure for 2016 of 2,500 barrels of oil per day.
The company now plans to drill the MD 51-2 development well "early next month" after receiving regulatory approval, and that will be the second of a six well programme spanning 2016. The well will be a directional well to be drilled to a total depth of 3,900 feet to test the Middle and Upper Cruse sands, which were encountered with the MD 250 well.
The MD 250 well identified multiple hydrocarbon bearing zones, with an estimated net pay of over 140 feet. The new well will be drilled from the same drilling pad as the MD 250 well, using a 4,000 metre rig. The wellhead is located approximately 20 feet from the MD 250 well and the rig is currently being moved to the site by the drilling company.
"The company expects to spud the well in July and will provide a further update to all shareholders upon spudding. In line with safety requirements, production testing operations of the MD 250 and MD 51-2 wells will be performed only once all drilling operations on the pad area are completed," said Range.
The other four wells to be drilled this year in Trinidad comprise of two development wells in Morne Diablo, one development well in Beach Marcelle, and one exploration well in the Guayaguayare block.
Range is also conducting a workover programme on its existing wells in the country, aimed at improving the efficiency and production rates. Range said Wednesday it has reviewed that programme to focus on the "most economic wells", without providing further detail, and said it will keep the workover programme under a regular review and carry on workover operations on the most profitable wells.
"The company conservatively estimates that the five development wells from the 2016 work programme will add approximately 500 barrels of oil per day to current production levels by the end of this year. Range reiterates its previous production guidance of 2,500 barrels of oil per day by the end of 2017, with the majority of this production growth to come from waterflood projects," said Range.
In addition, LandOcean, which is providing a rolling credit for drilling services that are being used by Range, has agreed to extend the terms of the credit to a 24-month period from the original 12-month period.
The other terms remain unchanged and Range will still pay interest of 10% per year.
LandOcean has also agreed to extend the repayment date for the USD2.5 million charge for work connected with a purchase order by a further 12-month period. LandOcean agreed to provide a total of USD5.0 million to Range to cover the costs of services being provided by LandOcean, and Range has already repaid USD2.5 million after making a payment in the third quarter of 2015.
"Range is encouraged by the ongoing support from its strategic partner, particularly during lower commodity prices. These extended credit terms are extremely beneficial to Range, as it allows the company to repay LandOcean from future cashflows once the expected production levels ramp up," said the company.
Range shares were trading up 6.1% to 0.340 pence per share on Wednesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
