1 May 2009 15:53
Range Resources Ltd 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 April 2009 QUARTERLY REPORT FOR PERIOD ENDING 31 MARCH 2009
The Board is pleased to provide the following commentary to be read in conjunction with the Appendix 5B which is attached.
During the quarter the Company successfully completed a fully subscribed non renounceable rights issue, democratic elections were held in Puntland and the new management team continued to compile and review all available data in relation to the offshore programme.
EXPLORATION UPDATE - Dharoor
The Company's joint venture partner, Africa Oil, completed its 2D seismic programme in Puntland's Dharoor Valley in December 2008. 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 has commenced and drilling locations are scheduled to be selected by Africa Oil during the second quarter of 2009. A more definite timetable for rig mobilisation and drilling will be announced as drilling locations are finalised with actual drilling anticipated for the fourth quarter of 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
During the quarter, a significant volume of both onshore and offshore data was acquired from a third party and now forms the basis of a growing technical library in Range's consultant Dallas offices. This dataset includes important seismic coverage of Puntland's Outer Continental Shelf that will help to define where new offshore data needs to be acquired and interpreted. The data should allow Range to complete (during the current quarter) an integrated geological and geophysical model over the entire Puntland offshore area and work constructively with the Puntland Government on how best to exploit the offshore potential.
The Company continues to develop its plan for the exploration of Puntland's offshore areas. As referred to above, existing 2D seismic data from several older surveys is being reviewed and interpreted along with earlier drilling results in order to focus future exploration efforts on areas that are deemed to have the highest potential for commercial reserves. The Company continued its discussions with potential joint venture partners, seismic contractors and security firms operating in the region in order to determine the feasibility, cost, and timing of new 2D seismic acquisition in Puntland waters.
Political Situation
During the quarter Puntland held a democratic regional election. The successful election of new President Dr Abdirahman Mohamed "Farole" was announced by the Company and discussed in its Quarterly and Half Yearly Reports in 2009. The Company is continuing to progress with establishing a constructive relationship with the new Government and establish a mutually beneficial program of developing Puntland's mineral and offshore hydrocarbon assets.
Non-Renounceable Rights Issue and Share Issues
The Company successfully completed its fully subscribed non renounceable rights issue raising $1.5m. 104,652,472 unlisted options exercisable at 1.5 cents and 26,163,118 free attaching listed options exercisable at 5 cents on or before 31 December 2011 were issued.
The Company is in the final stages of securing an underwriter for the $1.5m option exercise process due 31 May 2009. Option holders have been sent notification with regards to the exercise of their options on or before 31 May 2009.
The Board is encouraged by the response in today's economic climate and thanks its shareholders for their support.
Some of these options have already been exercised, with the details set out in the separately released Appendix 3B. The Company also issued an additional 13,333,333 fully paid shares, 23,544,360 listed options exercisable at 5 cents on or before 31 December 2011 and 844,111 unlisted options exercisable at 1.5 cents on or before 31 May 2009 in lieu of various corporate and consulting services provided to the Company.
Mineral Exploration
The Western Australian tenements were divested to ex Director, Michael Povey in a sale agreement reached as part of settlement arrangements for the termination of his service contract. These tenements were a non-core asset that were ascribed only limited value by the Company and would have been difficult for the Company to dispose of for any cash consideration. The divestment will save the Company approximately $1,200,000 per annum in ongoing tenement related costs. Moving forward the Company will retain a 2% Royalty interest in the tenements.
Having been a director of the Company within the last 12 months, Mr Povey is classed as a related party of the Company under the rules of the AIM market. The directors of the Company consider, having consulted with RFC Corporate Finance Ltd, its nominated adviser in respect of its listing on the AIM market, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.
By order of the BoardPeter LandauExecutive DirectorContactsRange ResourcesPeter LandauTel: +61 8 9488 5220Em: plandau@rangeresources.com.auAustraliaPPRDavid TaskerTel: +61 (8) 9388 0944Em: david.tasker@ppr.com.auRFC Corporate Finance (Nominated Advisor)Stuart LaingTel: +61 (8) 9480 2500LondonConduit PRJonathan CharlesTel: + 44 (0) 20 7429 6666Em: jonathan@conduitpr.comFox-Davies Capital (Broker)Daniel Fox-DaviesTel: +44 (0) 207 936 5200
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