STA.L Regulatory News (STA)

29 July 2013 The ManagerCompany AnnouncementsAustralian Securities Exchange LimitedLevel 6, 20 Bridge StreetSydney NSW 2000 Guatemala Update Range Resources Limited ("Range" or "the Company") would like todraw attention to the announcement released by Citation Resources Limited(ASX:CTR) today with the following highlights: - Range to hold 20% Project Interest and 19.9% Company Interest (net attributable interest 32%); - Atzam #4 continues to produce between 130-140 bopd on restricted 8/64ths choke; - Nearly 5,000 barrels of oil produced by Atzam #4 to date; - Finalising operational plans for two well re-entries and 6 potential new wells on the Tortugas Salt Dome structure for late 2013/ early 2014. Re-entries expected to produce between 200-300 bopd per well; - Updated reserve report on Atzam #4 well due shortly - expected upgrade to the current Probable Reserve estimate of 2.3m bbls; - Spudding Atzam #5 development well expected in September; and - Following success of flow testing of Atzam #4 in excess of 1,000 bopd, decision to proceed with Atzam #5 triggers milestone share issues. Operational Update Atzam Oil Project The Atzam #4 well is continuing to produce good quality 38°API oilat rates between 130-140 bopd on a restricted 8/64ths choke, with theproduction rate planned to be significantly increased once the current onsitetank storage capacity and transport logistics are resolved through offtakecontracts. The project owner and Operator, Latin American Resources (LAR), isin advanced negotiations with a number of oil companies on short term and longterm offtake contracts for the Atzam #4 oil production, and the Company willadvise the market as soon as contracts are in place. Importantly this production continues from natural reservoirpressures and without assistance from a submersible pump, which is normallyused for producing these carbonate sections. The Operator estimates this producing C 17 carbonate section wouldproduce in excess of 1,000 bopd on an open choke based on the flow ratesrecorded to date on various choke sizes up to 32/64ths, together with thedownhole and well head pressures data from this zone. The optimal choke sizeand production rate will be determined by the Operator and reserve engineersto maximize the flow rate but protect the integrity of the producing reservoirsection once onsite storage capacity is resolved. Tortugas Salt Dome Project The Company is currently advanced with operations planning withLAR, Operator of Block 1-2005, to complete 2 well re-entries in conjunctionwith potentially 6 new well locations on the the Tortugas Salt Dome structure.The well re-entries on two Tortugas wells, 63-4 and 63-5 are expected toproduce between 200-300 bopd each of high quality 34°API oil based onhistorical flow rates and production. In the mid 80's, two wells flowed oil atinitial rates over 1,500 bopd, however were subsequently suspended. The Tortugas Salt Dome structure is a suspended oil field, withMonsanto having drilled 17 wells on the structure including wells for bothsulphur and oil. One of the wells (T9B) experienced an oil blowout at approx.1,500 ft., with the majority of the other wells having oil shows in multiplezones. Revised reserve report on Atzam #4 well The Company is expecting an updated independent Atzam #4 wellreserve report, resulting from the successful well flow testing program andthe recent production flow rates of the well as previously reported. Theinitial Atzam #4 independent reserve report stated a 2.3m barrel ProbableReserve based on the drilling and logging data from the well, and will beupdated based on the production flow rates together with the pressure andreservoir data from the recently completed testing program from this Upper C17production zone during June. Conversion of Range Resources Loans to Equity and Project Interest Following the decision to drill the Atzam #5 development well,Range has executed a debt conversion agreement with Citation, under whichloans and interest owed to Range will be converted into direct equity in theCompany and the transfer of a 10% working interest in LAR. Following theconversion of the loans, which will be completed in a two stage process (basedon Citation's future capital needs), Range will hold a 19.9% shareholding inCitation and a 20% shareholding in LAR funded through to the next stage ofdevelopment. Yours faithfully Peter LandauExecutive Director ContactsRange 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 GMP Securities Europe LLP RFC Ambrian Limited (Nominated Advisor)(Joint Broker) Stuart LaingRichard Greenfield / Rob Collins / T: +61 (8) 9480 2500Alexandra CarseT: +44 (0) 207 647 2800 Fox-Davies Capital Limited (Joint Broker) Old Park Lane Capital (Joint Broker)Daniel Fox-Davies / Richard Hail Michael ParnesT: +44 (0) 203 463 5000 T: +44 (0) 207 493 8188 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 MMbbl of oil and 17MMbbl 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 Caribbean 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 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.