16 Mar 2015 07:00
Half-Yearly Report
Range today releases the half-yearly report for the 6 months ending 31 December 2014, with the following key points:
Corporate:
· New Board and additional management appointed;
· US$60 million equity based financing secured from Core Capital. The transaction is on track to complete on or before 30 April 2015, subject to shareholder approval at the EGM on 27 March 2015;
· US$50 million credit facility arranged for Trinidad waterflood and development programmes (subject to Range paying a security deposit of US$7.5 million);
· Range will fully exploit and develop the potential of the Trinidad assets with the US$110 million total financing package;
· In line with the Company's strategic focus on Trinidad, the Company is looking to rationalise non-core assets of the Company;
· Range agreed to sell its drilling services company in Trinidad which will continue to provide full oilfield operations services to Range. Sale completion is anticipated before the end of March 2015;
· Sale & Purchase Agreement signed for the disposal of non-core Texas assets with completion anticipated before the end of March 2015; and
· Range announced the loan financing agreement of up to US$15 million with Lind Asset Management, LLC (Lind). At present, a total of US$5.5 million under the Lind facility has been drawn down. Subsequent to period end, Range received a statutory demand from Lind demanding repayment of approximately US$7.2 million that Lind alleges is due and payable. Range submitted an application to the Supreme Court of Western Australia to set aside the statutory demand.
Operational:
· The average oil production in Trinidad has decreased by 11% to 545 bopd from 615 bopd in the same period last year. The decrease was mainly a result of lack of drilling activity and poor uptime of the rig fleet, resulting from historical underinvestment, which prevented the Company from running its drilling operations at full capacity;
· Seven development wells were spudded on the Company's Morne Diablo and South Quarry licences. At the date of this announcement, five of those wells were put into production, and two wells to be tested;
· Range continued to make significant progress on the waterflood programmes in Trinidad with LandOcean, with extended waterflooding studies successfully completed;
· Range entered into the second purchase order for the provision of technical services by LandOcean to implement waterflooding plans in Trinidad; and
· Range is finalising proposed exploration programme plans on the Guayaguayare licence, with the first shallow onshore well expected to spud in H1 2015.
Financial:
· Revenues decreased by 34% to US$7.8 million (2013: US$11.8 million), which was due to lower oil production in Trinidad and lower overall oil price. The average realised oil price for the period has decreased by 19% to US$79.2 per barrel (2013: US$97.4 per barrel);
· G&A costs decreased by 13% to US$7.5 million (2013: US$8.6 million), however the management considers these costs to be still too high and is focused on reducing them substantially;
· Range has recognised an impairment charge of US$5 million against its Georgian assets. Range continues to explore options to exit these non-core assets and given the current low oil price environment and the challenging M&A conditions, the management believes that this represents fair value that might be received on any potential disposal;
· The net loss from operations on the assets being sold (Texas and Range Resources Drilling Services Limited) was US$2.5 million; and
· Net loss for the period, therefore, was US$19.9 million (2013: US$19.1 million).
The management remains fully committed on turning the Company around, strengthening the balance sheet, and increasing production and look forward to providing more frequent operational updates to Shareholders. An update on Trinidad operations will be released to the market later this week.
A copy of the full Half-Yearly Report is available on the company's website: www.rangeresources.co.uk.
Contacts
Cantor Fitzgerald Europe(Nominated Advisor and Broker)
David Porter / Sarah Wharry(Corporate finance)
Richard Redmayne (Corporate broking)
t. +44 (0)20 7894 7000
Range Resources Limited
Australian Office
Ground Floor, BGC Centre
28 The Esplanade
Perth WA 6000
Australia
t. +618 6205 3012
UK Office
Suite 1A, Prince's House38 Jermyn StreetLondon, SW1Y 6DNUnited Kingdom
t. +44 (0)20 7025 7040
f. +44 (0)20 7287 8028
e. admin@rangeresources.co.uk
www.rangeresources.co.uk