30 Jan 2009 08:16
ABN 88 002 522 009 Level 3, 1 Havelock Street West Perth, 6005 Western Australia Ph: +61 8 9488 5220 Fx: +61 8 9324 2400 admin@rangeresources.com.au30 January 2009 QUARTERLY REPORT FOR PERIOD ENDING 31 DECEMBER 2008
The Board is pleased to provide the following commentary to be read in conjunction with the Appendix 5B which is attached.
During the quarter a new management team and offshore opportunities were announced, the Company held its Annual General Meeting and recently (5 January 2009) the Company's rights issue prospectus was lodged and despatched to share and option holders and on 13 January 2009 the Company released an update regarding the elections in Puntland.
EXPLORATION UPDATE - Dharoor
The Company's joint venture partner, Africa Oil, completed its 2D seismic programme in Puntland's Dharoor Valley. A total of 782 km of good quality vibroseis data, comprising a grid of 15 lines were recorded.
Africa Oil is currently processing the new survey and combining the results with 555 km of older seismic data previously acquired. Mapping of this combined survey is scheduled to commence in early 2009 and drilling locations will be selected before the end of the first quarter 2009. A more definite timetable for rig mobilisation and drilling will be announced as drilling locations are finalised by the end of the first quarter 2009.
Range notes that the current world financial crisis combined with recent low oil prices has meant that rig availability has increased significantly while budgeted drilling costs have decreased significantly, thereby providing Africa Oil greater flexibility in finalising its programme.
The Company has commenced contributions to the expenditure programme on the Dharoor Valley (subject to finalization of cost allocation under the joint operating agreement with Africa Oil). It should be noted that Africa Oil's expenditure to date includes a rig mobilization fee and purchase and delivery of inventory (mainly well heads and casing) sufficient for 4 wells.
Offshore Programme
Work is underway to compile and review previously collected seismic data in order to design a new 2D seismic acquisition programme for Puntland's offshore oil and gas areas. Discussions regarding possible joint ventures with third parties are expected to be finalised first quarter 2009. The key point to note is that, in line with the world economic situation referred to above, the proposed costs of any proposed offshore programme have reduced significantly and, to this end, the Company is looking at alternative operators in addition to renegotiating the current offer from the Chinese geophysical group. The Company (with the input of its new management team) believes that one or more joint ventures with industry partners in offshore Puntland would allow the Company to explore while reducing exposure to exploratory risk and significant capital expenditures.
The new management team are promoting Range at the NAPE expo in Houston, Texas for the first time in February 2009. The Board remains confident that the oil and gas potential of offshore Puntland matches that of other successfully developed international offshore oil and gas areas
Political Situation
As recently announced (13 January 2009) following a democratic regional election held in Puntland, Somalia where the Company holds oil and gas assets, Dr. Abdirahman Mohamed "Farole," was appointed the fourth President of Puntland. Dr. Farole, 63, won in the third round of voting by the 66-seat Puntland Parliament, which essentially functions as the region's Electoral College.
The Company congratulates the new President on his election and looks forward to continuing with the successful development of Puntland's hydrocarbon and mineral assets.
Range believes the open and peaceful nature of the election of President Dr Farole highlights the strong wish of the Puntland people for security and democracy to be maintained and enhanced in the region.
During the official crowning ceremony in Garowe, new President Dr Farole gave special thanks to the outgoing President Hersi for the smooth transition of power and declared that former President Hersi will become the Government's special advisor on development issues. The appointment of former President Hersi will greatly assist Range as it seeks to establish a good working relationship with the new Government in dealing with offshore development and key areas of mineral interest.
Non-Renounceable Rights Issue
On 5 January 2009, the Company announced the details of a non-renounceable entitlement issue ("Rights Issue") to the Company's shareholders ("Shareholders") on the basis of 1 unlisted option ("New Option") for every 2 fully paid ordinary shares in the capital of the Company ("Shares"), together with 1 free attaching listed option ("Attaching Option") for every 4 New Options subscribed for, to raise approximately $1,569,787 before expenses. Each listed Attaching Option shall have an exercise price of 5 cents ($0.05) and is exercisable at any time on or before 31 December 2011.
The subscription price for each New Option shall be 1.5 cents ($0.015) and each New Option shall have an exercise price of 1.5 cents ($0.015) and is exercisable at any time on or before 31 May 2009. For every 4 New Options which a subscriber exercises following subscription, the subscriber shall receive (in addition to the ordinary fully paid share) 3 further Attaching Options.
The Offer closes at 5.00pm (WDST) on 6 February 2009 and closing details of the Rights Issue will be announced on or about 9 February 2009.
Mineral Exploration
During the quarter the Company significantly scaled down its expenditures regarding the Western Australian tenements as it formally moves to sell or farm out its interests. Moving forward the exercise will save the Company approximately $300,000 per quarter.
By order of the BoardPeter LandauExecutive DirectorContactsRange ResourcesPeter LandauTel: +61 8 9488 5220
Em: plandau@rangeresources.com.au
Australia London
PPR Conduit PR
David Tasker Jonathan Charles
Tel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7429 6666Em: david.tasker@ppr.com.au Em: jonathan@conduitpr.com
RFC Corporate Finance (Nominated Advisor) Fox-Davies Capital (Broker)
Stuart Laing Daniel Fox-Davies
Tel; +61 (8) 9480 2500 Tel: +44 (0) 207 936 5200
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