STA.L Regulatory News (STA)

3 June 2013 The ManagerCompany AnnouncementsAustralian Securities Exchange LimitedLevel 6, 20 Bridge StreetSydney NSW 2000 By e-lodgement Significant Initial Oil Production Establishes Commercial Atzam #4 Well inGuatemala Range Resources Limited ("Range" or "the Company") is pleased to announce thefollowing update with respect to its stake in Guatemalan project (in whichRange has an indirect attributable interest of 24%), released by CitationResources Limited (ASX:CTR) today: - Initial 7 foot section (2846-2853ft.) perforated in the Upper C17 carbonates has produced significant oil and gas to surface immediately post perforation; - Flow rate of 610 bopd established over 24 hour period - average of hourly flow rates using varying choke sizes with a recorded peak of + 1,000 bopd; - No acid wash or reservoir stimulation used flow rate generated by natural reservoir pressure; - Oil cut of 99% from producing zone, with strong gas flare; - Good quality 29° API oil, with calculated natural reservoir pressure of 1300 psi; - Pressure gauges will now be used to confirm the reservoir pressure reading from the producing C17 zone to establish updated resource estimates for the Atzam Project and Atzam #4 well; - Current Probable Reserve estimate of 2.3m barrels of oil in Atzam #4 well alone, to be revised on results; - Production is being stored in onsite tanks - commercial sales of production to commence; and - Net backs in Guatemala approximately 50% of the WTI market price - favourable economics; and - Highly prospective 13ft. zone in Upper C17 and the C13 and C14 carbonate sections that are the producing units in the Rubelsanto Field - remain untested due to the high pressure oil and gas production from perforated zone - will be perforated in future well production operations. The Company is pleased to announce that after perforating a 7 footsection in the reservoir in the Upper C17 carbonates from 2846-2853 ft., theAtzam #4 well immediately started to produce fluids and gas to surface withoutassistance. Following an initial well clean up with recovery of fluids, thewell produced at an average rate of 610 bopd over a 24 hour period usingvarious choke sizes. The generation of a 610 bopd average rate over thisperiod without acid wash of the section or well swabbing is considered astrong endorsement of the commercial potential of the well, and likely toincrease the recoverable resource volumetrics for the Atzam Field. The Operator, Latin American Resources Ltd. ("LAR"), has acalculated natural reservoir pressure of over 1300 psi and confirmed that theopen reservoir section in the Upper C17 carbonate is producing a good quality29° API oil. The oil produced to date is being stored to be sold and theOperator expects to have a commercial contract in place to sell futureproduction over the next few days. With the volume of oil being produced at these reservoir pressures,the Operator is unable to be immediately testing a highly prospective 13 footsection in the Upper C17 above this producing unit or the C13 and C14carbonate sections that are the producing units in the Rubelsanto Field. Thesesections can be tested and bought onto production in Atzam #4 at anappropriate time in the future depending on the well's production profile, andwill be primary targets in the next Atzam #5 well. Atzam # 4 - Initial ELAN and CMR Log Interpretation Results Zone Depth Thickness % Porosity % Oil Permeability SaturationC13 A 1748-1794 46 feet 15-45% Up to 53% Up to 559 mdC13 B 1806-1824 18 feet 20% Up to 49%C14 A 1845-1860 15 feet 28% Up to 54%C14 B 1902-1915 13 feet 13-15% Up to 74% Up to 131 mdC16 A 2464-2470 16 feet 15% Up to 58% 1,390 mdC16 B 2494-2514 20 feet 10% Up to 73% 50 mdC17 A 2772-2774 2 feet 12% Up to 90% 100C17 B 2846-2854 8 feet 6-8% Up to 50% Porosities and oil saturations not measurable because of large holediameter caused by extremely fractured and friable limestones and dolomites inthe section. The C18 N and O correlate to the producing section in the Atzam#2 well as does the top of the C19. Oil and gas shows in the zones whiledrilling and a structural gain of 270 and 240 feet respectively indicateproductive intervals. Formation tops were picked based upon drilling samples,drilling times and gamma ray logging. Permeabilities were measured in specificpoints by CMR log. Highly Prospective C13 and C14 Carbonates - Still Untested andBehind Pipe in Atzam #4 The Atzam #4 well produced impressive oil shows during the drillingof the well through the C13 and C14 carbonates, complemented by higher thanexpected permeability and porosity results from the electric logs over thesesections. This established the C13 and C14 carbonates as two of the reservoirsections in the well that display strong commercial potential, and are themain producing zones in the nearby Rubelsanto Field. The Rubelsanto Field has produced over 30 mmbbl to date from 8wells and is located only 17km to the north east of the Atzam Field, along astructural fault offset. 2.3m Barrel Probable Reserve Estimate for Atzam #4 Well Ralph E Davis and Associates (RED) were commissioned to undertakean independent reserves report based on the results of the logging and theanalytical work completed by Schlumberger on the Atzam #4 well. The reportconcluded that upon reviewing Schlumberger's detailed petrophysical work thereis up to 20 material oil shows in the Atzam #4 well, with 8 zones recommendedby RED to be tested for commerciality. The report concludes the Atzam #4 well has a Probable Reservesestimate of 2.3m bbls using a 30% recoverability factor and a 160 acredrainage area as set in the table below, which excludes several deeper zonesin the lower C-18 and C-19 which were not evaluated due to lack of detailedwell log data due to the well bore washout encountered whilst drilling: Gross Oil Volumes, Barrels RF 25% RF 30%C-13A 421,174 505,409C-13 B 202,198 242,637C-14A 79,988 95,985C-14 B 278,715 334,458C-16 157,925 189,509C-17 453,143 543,772C-18A 201,401 241,681C-18B 132,757 159,308 1,927,301 2,312,759 The report used production and well data from analogous wells inthe area to compare to the petrophysical results recorded in the Atzam #4well. Although the Lower C18 and C19 zones were not included, as these zoneswere washed out while drilling and the logging tool could not be used throughthis interval, RED believe that there should be hydrocarbons present and theLower C-18 and C-19 should be tested in the next well scheduled to be drilledon the project. The reserves estimates in the report conform to the definition ofprobable reserves approved by the SPE/WPC/AAPG/SPEE Petroleum ResourcesManagement System (SPE-PRMS) document as co-sponsored by the Society ofPetroleum Engineers, the World Petroleum Council, the American Association ofPetroleum Geologists and the Society of Petroleum Evaluation Engineers. Atzam Carbonates and Tortugas Salt Dome Projects Mapping of the Atzam structure using existing data from previousoperators (Basic, Hispanoil) and MEM, and incorporating reservoir dataacquired since production initiated in December 2007, indicate the possibilityof a structure of comparable size and orientation to that of the existingRubelsanto field in Guatemala. The Rubelsanto field has produced +30 MMBBL ofoil since its discovery in 1976. The field currently continues to produce+1,000 bopd, 36 years after its discovery. The Atzam #2 well had initial flowrates of 1,200 bopd of 34°API oil which led to new well designs for the Atzam#4 well. In addition to the Atzam structures on Block 1-2005, the TortugasSalt Dome structure is a suspended oil field. Originally 17 wells on Tortugassalt dome were drilled by Monsanto looking for sulphur. One well (T9B) had anoil blowout at approx. 1,500 ft and most others had oil shows in multiplezones. The Company is reviewing the well re-entry opportunities on theTortugas Salt Dome structure with the Operator. Short Term Working Capital Funding to Citation Due to expected cash calls of the Operator relating to the installation ofcommercial production facilities, contracting key production personnel andongoing activities, Citation Resources has agreed to a short term workingcapital facility with Range Resources (and its financiers) for up to$1,000,000. Citation Resources is required to fund the ongoing Atzamoperations through its financing obligations to earn its 70% equity interestin the project owner and Operator, Latin American Resources Ltd. The loan can be repaid by Citation or converted into ordinary shares atAUD$0.01per share (being the 10 day VWAP) at the election of the financiersubject to any regulatory approvals. Competent Person Statement The information included in this Announcement that relates toresources was prepared by Mr Allen L. Kelley, who is an executive with RalphE. Davis Associates, Inc. based in Houston, Texas. Mr Kelley has over 30 yearsof oil and gas experience and is a Certified Petroleum Geologist (CertificateNumber 6092). Mr Kelley is a member of the American Association of PetroleumGeologists, Houston Geological Society, and the Society of PetroleumEngineers. In addition Mr Kelley has been a contributing member of thePotential Gas Committee for over 20 years holding positions of Eastern RegionVice President, Chairman of the Gulf Coast and Atlantic Committees andcurrently is on the Editorial Committee and Chairman of the Alaska Committee.Estimates as to recoverable hydrocarbon volumes contained in this Announcementare based upon certain assumptions. Accordingly, actual results will differ,and may differ significantly and materially, from those presented. Yours faithfully Peter LandauExecutive Director Contacts Range Resources Limited PPR (Australia)Peter Landau David TaskerT: 61 (8) 9488 5220 T: +61 (8) 9388 0944E: plandau@rangeresources.com.au E: david.tasker@ppr.com.au RFC Ambrian Limited (Nominated Advisor) Old Park Lane Capital (Joint Broker)Stuart Laing Michael ParnesT: +61 (8) 9480 2500 T: +44 (0) 207 493 8188 Fox-Davies Capital Limited (Joint GMP Securities Europe LLP (JointBroker) Broker)Daniel Fox-Davies / Richard Hail James PopeT: +44 (0) 203 463 5000 T: +44 (0) 207 647 2800 Dahlman Rose & Company (Principal American Liaison)OTCQX International Market (U.S.)Christopher Weekes / Stephen NashT: +1 (212)-372-5766 Range Background Range Resources Limited is a dual listed (ASX:RRS; AIM:RRL) oil & gasexploration company with oil & gas interests in the frontier state ofPuntland, Somalia, the Republic of Georgia, Texas, USA, Trinidad and Colombia. - In Trinidad Range holds a 100% interest in holding companies with threeonshore production licenses and fully operational drilling subsidiary.Independently assessed Proved (P1) reserves in place of 17.5 MMBO with 25.2MMBO of proved, probable and possible (3P) reserves and an additional 81 MMBOof unrisked prospective resources. - In the Republic of Georgia, Range holds a 40% farm-in interest in onshoreblocks VIa and VIb, covering approx. 7,000sq.km. Range completed a 410km 2Dseismic program with independent consultants RPS Energy identifying 68potential structures containing an estimated 2 billion barrels of undiscoveredoil-in-place (on a mean 100% basis) with the first (Mukhiani-1) explorationwell having spudded in July in 2011. The Company is focussing on a reviseddevelopment strategy that will focus on low-cost, shallow appraisal drillingof the contingent resources around the Tkibuli-Shaori ("Tkibuli") coaldeposit, which straddles the central sections of the Company's two blocks. - In Puntland, Range holds a 20% working interest in two licenses encompassingthe highly prospective Dharoor and Nugaal valleys. The operator and 60%interest holder, Horn Petroleum Corp. (TSXV:HRN) has completed two explorationwells and will continue with a further seismic and well program over the next12-18 months. - Range holds a 25% interest in the initial Smith #1 well and a 20% interestin further wells on the North Chapman Ranch project, Texas. The project areaencompasses approximately 1,680 acres in one of the most prolific oil and gasproducing trends in the State of Texas. Independently assessed 3P reserves inplace (on a 100% basis) of 228 Bcf of natural gas, 18 mmbbls of oil and 17mmbbls of natural gas liquids. - Range holds a 21.75% interest in the East Texas Cotton Valley Prospect inRed River County, Texas, USA, where the prospect's project area encompassesapproximately 1,570 acres encompassing a recent oil discovery. The prospecthas independently assessed 3P reserves in place (on a 100% basis) of 3.3mmbblsof oil. - Range is earning a 65% (option to move to 75%) interest in highlyprospective licences in the Putumayo Basin in Southern Colombia. The Companywill undertake a 3D seismic program in the near term as part of itsexploration commitments on the Company's Colombian interests. - Range has taken a strategic stake (19.9%) in Citation Resources Limited(ASX: CTR) which holds a 70% interest in Latin American Resources (LAR). LARholds an 80-100% interest in two oil and gas development and explorationblocks in Guatemala with Canadian NI 51-101 certified proved plus probable(2P) reserves of 2.3 MMBBL (100% basis). Range also holds a 10% interest inLAR. Table of Reserves and Resources Detailed below are the estimated reserves for the Range project portfolio. All figures in Gross Oil Range's Net AttributableMMboe ReservesProject 1P 2P 3P Interest 1P 2P 3P OperatorOil & NGLTexas - NCR * 16.4 25.2 35.3 20-25% 2.2 3.4 4.8 Western GulfTexas - ETCV 1.0 1.6 3.3 22% 0.2 0.3 0.6 Crest ResourcesTrinidad 17.5 20.2 25.2 100% 17.5 20.2 25.2 RangeGuatemala ** 2.3** ** 21-24% ** 0.48-0.55** ** Latin American ResourcesTotal Oil & 34.9 47.0 63.8 19.9 21.3 28.9LiquidsGas ReservesTexas - NCR * 106.0 162.7 228 20-25% 11.7 18.1 25.4 Western GulfTotal Gas 106.0 162.7 228 11.7 18.1 25.4Reserves* Reserves attributable to Range's interest in the North Chapman Ranch asset,which are net of government and overriding royalties as described in theForrest Garb report. ** The reserves estimate for the Guatemalan Blocks in which LAR (and CTR) havean interest in is as reported by CTR. CTR has not reported 1P and 3Pestimates, but Range is seeking such information from CTR for future reportingpurposes. Detailed below are the estimated resources and oil-in-place delineated acrossRange's portfolio of project interests. All figures in MMboe Gross Oil Reserves Range's Net AttributableProject Low Best/ High Interest Low Best/ High Operator Mean MeanProspective ResourcesTrinidad 8.1 40.5 81.0 100% 8.1 40.5 81.0 RangeTotal Prospective 8.1 40.5 81.0 8.1 40.5 81.0ResourcesUndiscoveredOil-In-PlacePuntland - 16,000 - 20% - 3,200 - Horn PetroleumGeorgia - 2,045 - 40% - 818 - Strait Oil & GasColombia - 7.8 - 65-75% - 5.1-5.8 - Petro CaribbeanAll of the technical information, including information in relation toreserves and resources that is contained in this document has been reviewedinternally by the Company's technical consultant, Mr Mark Patterson. MrPatterson is a geophysicist who is a suitably qualified person with over 25years' experience in assessing hydrocarbon reserves and has reviewed therelease and consents to the inclusion of the technical information. The reserves estimate for the Guatemalan Blocks in which LAR (and CTR) have aninterest in is as reported by CTR. CTR has not reported 1P and 3P estimates,but Range is seeking such information from CTR for future reporting purposes. All of the technical information, including information in relation toreserves and resources that is contained in this document has been reviewedinternally by the Company's technical consultant, Mr Mark Patterson. MrPatterson is a geophysicist who is a suitably qualified person with over 25years' experience in assessing hydrocarbon reserves and has reviewed therelease and consents to the inclusion of the technical information. The reserves estimates for the 3 Trinidad blocks and update reserves estimatesfor the North Chapman Ranch Project and East Texas Cotton Valley referredabove have been formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA isan international petroleum engineering and geologic consulting firm staffed byexperienced engineers and geologists. Collectively FGA staff has more than acentury of worldâ€wide experience. FGA have consented in writing to thereference to them in this announcement and to the estimates of oil and naturalgas liquids provided. The definitions for oil and gas reserves are inaccordance with SEC Regulation Sâ€X an in accordance with the guidelines ofthe Society of Petroleum Engineers ("SPE"). The SPE Reserve definitions can befound on the SPE website at spe.org. RPS Group is an International Petroleum Consulting Firm with officesworldwide, who specialise in the evaluation of resources, and have consentedto the information with regards to the Company's Georgian interests in theform and context that they appear. These estimates were formulated inaccordance with the guidelines of the Society of Petroleum Engineers ("SPE"). The prospective resource estimates for the two Dharoor Valley prospects areinternal estimates reported by Africa Oil Corp, the operator of the jointventure, which are based on volumetric and related assessments by Gaffney,Cline & Associates. The TSX certified 51-101 certified reserves with respect to the Guatemalanproject are as reported by ASX listed Company Citation Resources (ASX: CTR). In granting its consent to the public disclosure of this press release withrespect to the Company's Trinidad operations, Petrotrin makes norepresentation or warranty as to the adequacy or accuracy of its contents anddisclaims any liability that may arise because of reliance on it. The Contingent Resource estimate for CBM gas at the Tkibuli project is sourcedfrom the publically available references to a report by Advanced ResourcesInternational's ("ARI") report in 2009: CMM and CBM development in theTkibuli-Shaori Region, Georgia. Advanced Resources International, Inc., 2009.Prepared for GIG/Saknakhshiri and U.S. Trade and Development Agency. -.globalmethane.org/documents/ toolsres_coal_overview_ch13.pdf. Range'stechnical consultants have not yet reviewed the details of ARI's resourceestimate and the reliability of this estimate and its compliance with the SPEreporting guidelines or other standard is uncertain. Range and its JV partnerswill be seeking to confirm this resource estimate, and seek to definereserves, through its appraisal program and review of historical data duringthe next 12 months. Reserve information on the Putumayo 1 Well published by Ecopetrol 1987. SPE Definitions for Proved, Probable, Possible Reserves and ProspectiveResources Proved Reserves are those quantities of petroleum, which by analysis ofgeoscience and engineering data, can be estimated with reasonable certainty tobe commercially recoverable, from a given date forward, from known reservoirsand under defined economic conditions, operating methods, and governmentregulations. Probable Reserves are those additional Reserves which analysis of geoscienceand engineering data indicate are less likely to be recovered than ProvedReserves but more certain to be recovered than Possible Reserves. Possible Reserves are those additional reserves which analysis of geoscienceand engineering data indicate are less likely to be recoverable than ProbableReserves. 1P refers to Proved Reserves, 2P refers to Proved plus Probable Reserves and3P refers to Proved plus Probable plus Possible Reserves. Prospective Resources are those quantities of petroleum estimated, as of agiven date, to be potentially recoverable from undiscovered accumulations byapplication of future development projects. Prospective Resources have both anassociated chance of discovery and a chance of development. ProspectiveResources are further subdivided in accordance with the level of certaintyassociated with recoverable estimates assuming their discovery and developmentand may be sub-classified based on project maturity. Contingent Resources are those quantities of hydrocarbons which are estimated,on a given date, to be potentially recoverable from known accumulations, butwhich are not currently considered to be commercially recoverable. Undiscovered Oil-In-Place is that quantity of oil which is estimated, on agiven date, to be contained in accumulations yet to be discovered. Theestimated potentially recoverable portion of such accumulations is classifiedas Prospective Resources, as defined above.