q&a17 Aug 2018 17:32
Range Resources Limited (‘Range’ or ‘the Company’)
17 August 2018
Australian Office UK Office e. admin@rangeresources.co.uk AIM: RRL c/o Edwards Mac Scovell, c/o Range Resources ASX: RRS 140 St Georges Terrace Upstream Services Limited www.rangeresources.co.uk Perth WA 6000 Australia 1 Long Lane London, SE1 4PG United Kingdom
t. +618 6205 3012 t. +44 (0)20 3865 8430
INVESTOR Q&A
The Company provides its ongoing investor Q&A setting out responses to questions received from investors. It should be noted that those queries that were already addressed in the previous Q&A forums, are not included in this Q&A. The wording of similar questions has been amalgamated to better reflect a broader spread of investor interests.
RECENT SUBSCRIPTION
1. How is the subscription in the best interest of the shareholders? How can the Board be "pleased" with it? Why was it necessary?
The Board considered at length the pros and cons of the subscription. Given the ongoing work programme, and the advantages that it could bring to the Company, it was determined that it was in the best interests of the Company and shareholders to raise funds to enable the Company to continue its production growth plans and unlock the full potential of the reserves base.
The Company has an active work programme in both Trinidad and Indonesia for the remainder of the year, which involves drilling two development wells, workovers, optimization and waterflood optimization work. Additionally, the drilling business is actively looking at other third-party business.
The majority of the new funds raised are earmarked for the Beach Marcelle field. The most recent wells drilled at the Beach Marcelle combined with the ongoing waterflood and workovers have meant that production at the field is materially higher than in previous years. The sales infrastructure at the field is generally operating at full capacity which can put constraints on the Company’s ability to maximise production and can even lead to shutting in wells on temporary basis to manage production.
To mitigate this, the Company has already completed upgrades on certain elements of the field infrastructure this year, however recently the Company has seen constraints due to limited availability of Petrotrin to monitor the sales volumes. Given the plans to undertake more development and waterflood work (mentioned above), it is crucial that Range invests into enhancing the infrastructure to enable to continue production growth. Therefore, most of the funds raised are directed towards establishing better offtake/sales arrangements to allow handling higher volumes of oil on a regular basis.
2. Why was the subscription completed at a discount to the share price?
The subscription price was determined by a number of factors, including the low liquidity and a wide bid / offer spread, therefore a discou