(Alliance News) - Range Resources Ltd on Wednesday announced the sale of four drilling rigs and related equipment for USD3.6 million in cash to Wilson Energy Services Inc in a bid to cut costs and improve liquidity.
Shares in Range jumped 42% to 0.046 pence in London in morning trade.
Range, which has oil and gas projects and oilfield services businesses located in Indonesia and Trinidad, said its Range Resources Drilling Services Ltd subsidiary will sell rigs 16, 17, 18, and 19 to private Canadian firm Wilson Energy.
The total cash consideration for the deal is USD3.6 million, with the full amount payable once the deal is complete.
The sale conditions, which must be either satisfied or waived, are the final inspections of both the rigs and the equipment to Wilson Energy's satisfaction and delivery of documentation in relation to the rigs. The long-stop date on the deal is November 8.
Wilson Energy can buy the rigs in its own name or that of a nominee. Such a nominee would "be an affiliate or subsidiary of the buyer to be incorporated in Trinidad and Tobago prior to completion of the transaction".
As at June 30, the asset value of the four rigs stood at USD17.4 million and the approximate pretax loss attributable to the rigs for the financial year ended June 30 was USD2.2 million.
Range Chair Kerry Gu said: "Given challenges experienced by [Range Resources Drilling Services] at winning new service contracts, as well as our proposed sale of Trinidad upstream assets (RRTL sale) announced in September, we have been actively looking at options to further reduce costs of our operations, selectively streamline our assets and increase our liquidity. I am, therefore, pleased with signing of the agreement for the sale of the drilling rigs and look forward to working with our colleagues and partners on bringing these important transactions to completion."
By Anna Farley; annafarley@alliancenews.com
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