30 Apr 2008 10:51
Range Resources Limited ABN 88 002 522 009 34 Parliament Place West Perth WA 6005 PO Box 684 West Perth WA 6872 P: +61 8 9488 5200 F: +61 8 9321 6699 admin@rangeresources.com.au30 April 2008 QUARTERLY REPORT FOR PERIOD ENDING 31 MARCH 2008
The Board of Range Resources Ltd ("Range" or the "Company") is pleased to provide the following commentary to be read in conjunction with the Appendix 5B.
HIGHLIGHTS:
* Contract signed for Drilling Rig * Mobilisation of equipment commences * Seismic Program to commence in May 2008 on Dharoor Block in Puntland * Puntland Government passes new legislation and launches new website (www.puntlandgov.net) with key policy initiatives and clarity on TFG relationship * TFG Collaboration ExplorationDrilling Programme
The following includes extracts from the announcement made by the Company's joint venture partner Africa Oil Corp. ("Africa Oil" on 28 April 2008.
As announced during the quarter a contract was signed by Africa Oil with Energi Tata Persada Pte Ltd (ETP), a Singaporean registered company. ETP is a wholly owned subsidiary of Catur Khita Persada, an Indonesian oil and gas service company who perform extensive turn key drilling projects in Indonesia.
The ETP rig No 3 is a brand new package currently being constructed in the Shengli fabrication plant in Dongying, China and is a 1,500 horsepower (HP) unit, equipped with the latest drilling technology, including a top drive and three 1,600 HP pumps.
The ETP rig was scheduled for delivery in mid May, 2008 and was planned to immediately mobilize to Jebel Ali, Dubai via chartered vessel. Preparations were well advanced to spud the first well during July and the drilling contractors and Africa Oil's drilling manager had visited the proposed well sites in Puntland. Twelve containers of casing and camp construction equipment are scheduled to arrive at Bosasso port from Jebal Ali (UAE) via Djibouti in the first week of May. However, the recent upsurge in civil unrest in southern Somalia and piracy around Somalia's coast have given rise to significant logistical difficulties in shipping further large amounts of heavy equipment and supplies to the drilling location. After close consultation with the Puntland Government, it has been decided that the prudent course of action is to delay the drilling programme temporarily. Both Range and Africa Oil are working with the Puntland Government to ensure all contractors and operators concerns can be met in order to get the drilling program reactivated in the shortest possible time frame. Once a revised timetable has been agreed, shareholders will be updated immediately.
Seismic Programme
During the quarter, Africa Oil finalised a contract with IMC-Tesla for the completion of approximately 2,600km of 2D seismic in the northern Dharoor Block and in March the seismic contractors visited the Dharoor valley and completed an initial reconnaissance of the area. The mobilization of the seismic crew and equipment is progressing smoothly and it is expected that work will commence in the first half of May 2008.
Puntland Visit and Government Initiative
During the quarter the Company organized a visit to Puntland for several foreign journalists and oil analysts in order for them to familiarize themselves with the situation in Puntland and meet and question the Puntland President, His Excellency, Mohamed Musse Hersi and his senior cabinet ministers.
The Puntland Government met the journalists and Company representatives in Garowe and the President undertook several individual question and answer sessions with the journalists, (some extracts from media articles will be made available on Range's website). In addition, the Puntland Government announced two major initiatives and formally launched a new website www.puntlandgov.net in order to help better communicate the Government's actions and policies. The launch was undertaken with the Company as part of the Company's push to not only increase exposure leading into the seismic and drilling programmes but to help nullify continuous negative comments from unofficial, overseas based websites that purport to represent Puntland opinion. The Puntland Government also presented to the Company and its guests the Puntland Five Year Development Plan, a comprehensive document which sets out the Puntland Strategic Vision and the Policy Guidelines.
TFG and Puntland
The Puntland Government finished recent discussions with the TFG culminating in further support from the TFG President, His Excellency Abdullah Yusuf Ahmed. The respective governments agreed that a key initiative in ensuring the success of the current exploration activities was the formation of a successful collaboration between both governments. The legitimacy of existing agreements in Puntland was endorsed and agreement was reached regarding the establishment of representative committees to discuss revenue sharing arrangements in the event of a Federal Somalia being established.
Mineral Exploration
Previously a number of exploration targets have been identified in Puntland, however, remote site access and drill availability have been long standing issues which have prevented further work. The increase in resource activity in recent years has resulted in a shortage of drilling equipment and manpower with lead times on exploration drills and drilling contracts typically around two years at this moment in time. The need to drill in Northern Somalia further compounded the difficulties of securing drill rigs and contractors.
The Company has therefore been working at securing its own exploration drill rig and has now been successful in purchasing a versatile drill rig suitable for rugged and remote conditions. The machine will be delivered in the coming quarter and will be used first on tenements the Company holds in the Forrestania region of Western Australia. These tenements, which were held prior to the Company's acquisition of its interests in Puntland, have the potential for gold and nickel mineralization and have been reviewed and rationalized over the last year. The drilling will serve a dual purpose of evaluating the potential of these tenements and testing the new Western Australian made drilling rig. The Puntland targets and logistics will be further reviewed and after testing, the rig will be available to be moved to Puntland.
Offshore acreage
Range is in the final stages of negotiations with regards to the completion of a 10,000-15,000km 2D line seismic programme funded by proposed joint venture partners. Recent incidents in offshore Puntland have delayed finalization but the Company is confident that agreements can be concluded, particularly with the recent offer of assistance from the Puntland Government regarding the utilization of Patrol boats.
Contacts:Australia UKManaging Director: Michael Povey Executive Director: Peter Landaum.povey@rangeresources.com.au p.landau@rangeresources.com.au+61 8 9488 5277 +44 207 389 8191Media Contacts:Australia LondonPPR Conduit PRDavid Tasker Jonathan Charlesdtasker@pprwa.com.au jonathan@conduitpr.com+61 8 9388 0944 +44 207 429 6611Nomad: Broker:Australia UKRFC Corporate Finance Ltd Fox-Davies CapitalStuart Laing +44 207 936 5240+61 8 9480 2506
Forward-looking statements: This report contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as political risk, general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans. Actual results may differ materially from those projected by management.
Appendix 5B Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity RANGE RESOURCES LIMITED ABN Quarter ended ("current 88 002 522 009 quarter") 31 March 2008
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to dateactivities $A'000 $A'000 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (902) (2,561) (b) development (c) production (d) administration (1,083) (2,667) 1.3 Dividends received 1.4 Interest and other items of a 93 404 similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other 0 5 Net Operating Cash Flows (1,892) (4,819) Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments - (1,500) (c) other fixed assets (9) (58) 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 1.10 Loans to other entities (1,127) (1,142) 1.11 Loans repaid by other entities 6 12 1.12 Other (provide details if (1,963) (18,662) material) Puntland Mineral & Hydrocarbon Rights Net investing cash flows (3,093) (21,350) 1.13 Total operating and investing cash (4,985) (26,169) flows (carried forward) 1.13 Total operating and investing cash (4,985) (26,169) flows (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, 720 9,144 options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Costs associated with issue of (83) (431) shares (refer to note) Net financing cash flows 637 8,713 Net increase (decrease) in cash (4,348) (17,456) held 1.20 Cash at beginning of quarter/year 9,788 22,896 to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter 5,440 5,440Payments to directors of the entity and associates of the directorsPayments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.23 Aggregate amount of payments to the parties 494 included in item 1.2 and 1.7 1.24 Aggregate amount of loans to the parties included Nil in item 1.10 1.25 Explanation necessary for an understanding of the transactions Payments of Directors Fees $210k Payments for Financial/Company Secretarial/Office Support Services $284k
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest N/A Financing facilities availableAdd notes as necessary for an understanding of the position. Amount available Amount used $A'000 $A'000 3.1 Loan facilities - - 3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A'000 4.1 Exploration and evaluation 1,200 4.2 Development - Total 1,200Reconciliation of cash
Reconciliation of cash at the end Current quarter Previous quarter of the quarter (as shown in the
consolidated statement of cash $A'000 $A'000flows) to the related items in the accounts is as follows. 5.1 Cash on hand and at bank 1,396 2,042 5.2 Deposits at call 4,044 7,746 5.3 Bank overdraft - - 5.4 Other - Term Deposit - - Total: cash at end of quarter 5,440 9,788 (item 1.22)
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest at reference at end of (note (2)) beginning quarter of quarter 6.1 Interests in mining E70/2500 Indirect 60% Nil tenements relinquished, reduced or lapsed 6.2 Interests in mining Nil tenements acquired or increased
Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number Issue price Amount paid up quoted per security per security (see note 3) (see note 3) (cents) (cents) 7.1 Preference + Nil securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions 7.3 +Ordinary 194,304,024 194,304,024 securities 7.4 Changes during quarter (a) Increases Nil Nil through issues (b) Decreases Nil Nil through returns of capital, buy-backs 7.5 +Convertible Nil debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options Exercise Price Expiry Date 63,723,930 - $1.00 1 October 2008 60,402,077 60,402,077 * $1.00 1 October 2010 2,952,029 - $0.50 30 June 2012 7.8 Issued during 3,375 3,375 $1.00 1 October 2010 quarter 8,868,058 $1.00 1 October 2008 7.9 Exercised - - during quarter 7.10 Expired Nil Nil during quarter 7.11 Debentures Nil (totals only) 7.12 Unsecured Nil notes(totals only)
7.13 Partly Paid 1,250,000 Nil 60 cents 30 cents
Shares**
Note: * During the quarter, 50,823,048 unlisted options were converted to listed options.
** Application was made to the ASX to have 3,750,000 Partly Paid Shares quoted on 27 December 2007. As at 31 March 2008 the shares had not been allotted by the Company's share registry. $1.125m is being held in escrow pending shareholder ratification regarding directors' exercise of partly paids.
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
____________________Peter LandauExecutive Director30 April 2008Notes
1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
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