15 Nov 2012 13:33
15 November 2012The ManagerCompany Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge StreetSydney NSW 2000By e-lodgement
GEORGIA, PUNTLAND AND FINANCING UPDATE
GEORGIA
Range Resources Limited ("Range" or "the Company") along with its joint venture partners Red Emperor Resources ("Red Emperor") and Strait Oil & Gas ("Strait") are pleased to announce the completion of the acquisition of a 200km seismic program.
Following the results of the earlier 410km 2D seismic programme, priority prospects were identified on Block VIa, whilst a number of leads were identified on Block VIb. The majority of the recent seismic was acquired over Block VIb to firm up these leads identified in the previous seismic programme, along with targeting two gas wells which were drilled and suspended in Soviet times. Two lines were also acquired over the same structure on which the Mukhiani well was drilled last year.
Processing is under way and results of the interpretation are expected to be completed early next year, with the Company confident that it will then have assembled the requisite amount of seismic and geological information to enable the Company to identify revised drillable targets and attract potential farm in partners if desired.
GIG Joint Venture
The Company continues to develop the CBM and conventional potential around the Tkibuli-Shaori Coal Field ("Tkibuli"). The Georgian Industrial Group ("GIG") has made available a significant amount of information including a detailed geological model based on 339 wells drilled in the region, many of which vented methane. Range and its partners are looking to finalise the joint venture agreement with GIG for the development of Tkibuli in the current quarter with the potential for third party financing being available to fund the programme. It is envisaged that following completion of the current technical and economic analysis, between three and four pilot production well locations will be identified with drilling expected to commence in Q2 2013.
Tkibuli has been estimated by Advanced Resources International to contain Contingent Resources (mean) of approximately 0.4 trillion cubic feet ("tcf") of coal-bed methane ("CBM") gas (Range's attributable 40% interest is 0.16 tcf). Sand horizons have also been identified around the coal beds, which could add additional, conventional hydrocarbon resources to those estimated for CBM at Tkibuli alone.
The Georgian Industrial Group (GIG) is the largest holding company within the Country and embraces a number of subsidiary companies operating in the energy sector, acquisition and processing of natural resources, production of building materials, logistics service and real estate development.
GIG was established in 2006 and has invested tens of millions of (US) dollars in the local economy and continues to support prospective businesses. GIG operate the 200MW gas-fired power station located at Gardabani as well as importing 25% of gas currently used in Georgia. The power station currently does not use any gas sourced locally in Georgia.
GIG operations are concentrated on the acquiring and processing of the Country's resources which, in turn, fosters the long-term development and success of Georgian industries.
PUNTLAND
The Company is pleased to provide the following update on operations as announced by its Puntland Joint Venture partner and Operator, Horn Petroleum Corp ("Horn") on the Company's exploration project in Puntland, Somalia. The blocks are operated by Horn who holds a 60% working interest in the Dharoor and Nugaal Valley Production Sharing Agreements ("PSA's") along with Range (20%) and Red Emperor (20%).
Horn has demobilized the drilling rig and associated equipment and has completed restoration of both drilling locations. Efforts are now focused on making preparations for a seismic acquisition campaign in the Dharoor PSA which will include a regional seismic reconnaissance grid in the previously unexplored eastern portion of the basin as well as prospect specific seismic to delineate a drilling candidate in the western portion of the basin where an active petroleum system was confirmed by the recent drilling at the Shabeel-1 and Shabeel North-1 locations. This seismic programme is expected to commence in the first half of 2013. The joint venture continues to pursue efforts to drill an exploration well in the Nugaal PSA and is working with the Puntland government authorities to move this project forward.
The joint venture is in active discussions with potential partners.
FINANCING UPDATE
$10m Funding Draw Down
Range is also pleased to announce that it has issued A$10m in secured notes (secured at the corporate level - registered charge) to fund requisite exploration bonds required for its Putamayo 6 and 7 blocks in Colombia and ongoing operations. The notes were purchased by Crede Capital Group ("Crede"). Crede is an international investor with offices in Los Angeles and New York. The Notes have a term of 12 months and carry a 10% interest rate. Crede will also receive 25% warrant coverage (£0.05075, 30 November 2015) at a 125% premium to the volume-weighted average price and can be paid back in cash or equity on or before the 12 month term at the Company's election. The facility has been drawn down to complement the recently announced conditional sale of its Texas interests (US$40m - half cash up front, half royalty). Range is pleased to be progressing its Colombian blocks and is in the process of completing an independent technical review of the previously drilled Put-1 Well (historical reserves of 7.8m bbls) and will be releasing the results of the review shortly.
Issue of Shares
Range Resources Limited is pleased to announce the issue of the following securities:
* 10,656,242 Ordinary Fully Paid Shares issued at A$0.054 * 22,500,000 Ordinary Fully Paid Shares issued at £0.04 * 55,973,933 Ordinary Fully Paid Shares issued in lieu of cash for financial facilitation, introductory and corporate advisory fees * 15,708,801 Unlisted Options (£0.0615, 19 October 2015) issued as part of loan facilities * 32,275,862 Unlisted Options (£0.05075, 30 November 2015) issued as part of loan facilities
Application will be made for the 89,130,175 new shares to be admitted to trading on the ASX and AIM. Trading in the new shares is expected to commence on or around 21 November 2012.
Following the issue of these securities the total number of securities on issue are as follows:
2,446,757,780 Ordinary Fully Paid Shares (RRS)
855,166 Unlisted Options (£0.04, 30 June 2015)
7,058,824 Unlisted Options (£0.17p, 30 April 2016)
5,180,000 Unlisted Options (£0.075p, 31 January 2017)
9,000,000 Unlisted Options (A$0.125p, 31 March 2015)
17,921,146 Class A Performance Shares
17,921,146 Class B Performance Shares
15,708,801 Unlisted Options (A$0.125p, 31 March 2015)
32,275,862 Unlisted Options (A$0.125p, 31 March 2015)
Peter LandauExecutive DirectorContactsRange Resources LimitedPeter LandauTel : +61 (8) 9488 5220Em: plandau@rangeresources.com.auPPR (Australia) Tavistock Communications (London)David Tasker Ed PortmanTel:+61 (8) 9388 0944 Tel: + 44 (0) 207 920 3150Em: david.tasker@ppr.com.au Em: eportman@tavistock.co.uk
RFC Ambrian Limited (Nominated Advisor) Old Park Lane Capital (Joint Broker) Stuart Laing
Michael ParnesTel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188
Fox-Davies Capital Limited (Joint Broker) GMP Securities Europe LLP (Joint Broker) Daniel Fox-Davies / Richard Hail
James Pope / Chris BeltgensTel: +44 (0) 203 463 5000 Tel: +44 (0) 207 647 2800Range Background
Range Resources Limited is a dual listed oil & gas exploration company with oil & gas interests in the frontier state of Puntland, Somalia, the Republic of Georgia, Texas, USA, Trinidad and Colombia.
* In Trinidad Range holds a 100% interest in holding companies with three onshore production licenses and fully operational drilling subsidiary. Independently assessed Proved (P1) reserves in place of 17.5 MMbls with 25.2 MMbls of proved, probable and possible (3P) reserves and an additional 81 MMbls of unrisked best estimate prospective resources. * In the Republic of Georgia, Range holds a 40% farm-in interest in onshore blocks VIa and VIb, covering approx. 7,000sq.km. Range completed a 410km 2D seismic programme with independent consultants RPS Energy identifying 68 potential structures containing an estimated 2 billion barrels of undiscovered oil-in-place (on a mean 100% basis) with the first (Mukhiani-1) exploration well having spudded in July in 2011. The Company is focussing on a revised development strategy that will focus on low-cost, shallow appraisal drilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli") coal deposit, which straddles the central sections of the Company's two blocks. * In Puntland, Range holds a 20% working interest in two licenses encompassing the highly prospective Dharoor and Nugaal valleys. The operator and 60% interest holder, Horn Petroleum Corp. has completed two exploration wells and will continue with a further seismic and well program over the next 12-18 months. * Range holds a 25% interest in the initial Smith #1 well and a 20% interest in further wells on the North Chapman Ranch project, Texas. The project area encompasses approximately 1,680 acres in one of the most prolific oil and gas producing trends in the State of Texas. Independently assessed 3P reserves in place (on a 100% basis) of 228 Bcf of natural gas, 18 mmbbls of oil and 17 mmbbls of natural gas liquids. * Range holds a 21.75% interest in the East Texas Cotton Valley Prospect in Red River County, Texas, USA, where the prospect's project area encompasses approximately 1,570 acres encompassing a recent oil discovery. The prospect has independently assessed 3P reserves in place (on a 100% basis) of 3.3mmbbls of oil. * Range is earning a 65% (option to move to 75%) interest in the highly prospective PUT 6 and PUT 7 licences in Putumayo Basin in Southern Colombia. The Company will undertake a 350km2 3D seismic programme across the two licences and drill one well per licence, as well as looking to re-enter a previously suspended well that had a significant historical reserve estimate.
All of the technical information, including information in relation to reserves and resources that is contained in this document has been reviewed internally by the Company's technical consultant, Mr Mark Patterson. Mr Patterson is a geophysicist who is a suitably qualified person with over 25 years' experience in assessing hydrocarbon reserves and has reviewed the release and consents to the inclusion of the technical information.
The reserves estimates for the 3 Trinidad blocks and update reserves estimates for the North Chapman Ranch Project and East Texas Cotton Valley referred above have been formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA is an international petroleum engineering and geologic consulting firm staffed by experienced engineers and geologists. Collectively FGA staff has more than a century of worldâ€"wide experience. FGA have consented in writing to the reference to them in this announcement and to the estimates of oil and natural gas liquids provided. The definitions for oil and gas reserves are in accordance with SEC Regulation Sâ€"X an in accordance with the guidelines of the Society of Petroleum Engineers ("SPE"). The SPE Reserve definitions can be found on the SPE website at spe.org.
RPS Group is an InternationalPetroleum Consulting Firm with offices worldwide, who specialise in the evaluation of resources, and have consented to the information with regards to the Company's Georgian interests in the form and context that they appear. These estimates were formulated in accordance with the guidelines of the Society of Petroleum Engineers ("SPE").
The prospective resource estimates for the two Dharoor Valley prospects are internal estimates reported by Africa Oil Corp, the operator of the joint venture, which are based on volumetric and related assessments by Gaffney, Cline & Associates.
In granting its consent to the public disclosure of this press release with respect to the Company's Trinidad operations, Petrotrin makes no representation or warranty as to the adequacy or accuracy of its contents and disclaims any liability that may arise because of reliance on it.
The Contingent Resource estimate for CBM gas at the Tkibuli project is sourced from the publically available references to a report by Advanced Resources International's ("ARI") report in 2009: CMM and CBM development in the Tkibuli-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's technical consultants have not yet reviewed the details of ARI's resource estimate and the reliability of this estimate and its compliance with the SPE reporting guidelines or other standard is uncertain. Range and its JV partners will be seeking to confirm this resource estimate, and seek to define reserves, through its appraisal programmeand review of historical data during the next 12 months.
Reserve information on the Putumayo 1 Well published by Ecopetrol 1987.
SPE Definitions for Proved, Probable, Possible Reserves and Prospective Resources
Proved Reservesare those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.
Probable Reservesare those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.
Possible Reservesare those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recoverable than Probable Reserves.
1P refers to Proved Reserves, 2P refers to Proved plus Probable Reserves and 3P refers to Proved plus Probable plus Possible Reserves.
Prospective Resourcesare those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.
Contingent Resourcesare those quantities of hydrocarbons which are estimated, on a given date, to be potentially recoverable from known accumulations, but which are not currently considered to be commercially recoverable.
Undiscovered Oil-In-Placeis that quantity of oil which is estimated, on a given date, to be contained in accumulations yet to be discovered. The estimated potentially recoverable portion of such accumulations is classified as Prospective Resources, as defined above.
ABN 88 002 522 009www.rangeresources.com.auLondon
Suite 1A, Prince's House, 38 Jermyn Street, London SW1 6DN t: +44 (0)207 025 7040, f: +44 207 287 8028
Australia
Ground Floor, 1 Havelock Street, West Perth WA 6005, Australia t: +61 8 9488 5220, f: +61 8 9324 2400 e: admin@rangeresources.com.au
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