STA.L Regulatory News (STA)

31 October 2013 Manager of Company AnnouncementsAustralian Securities ExchangeLevel 6, 20 Bridge StreetSydney NSW 2000 By E-Lodgement QUARTERLY REPORT FOR PERIOD ENDING 30 SEPTEMBER 2013 Issued Capital 3,157m* ASX Code RRS Closing price $0.03* Market Capital A$94.7m* AIM Code RRL Closing Price £0.02* *as at 30 September 2013 Gross Production for the Quarter Gas 144,710 Mcf Range Interest - 31,804 Mcf Oil 64,371 bbls Range Interest - 61,859 bbls The Board of Range Resources Limited ("Range" or "the Company")provides thefollowing commentary regarding its activities during the three months ended30 September 2013 to be read in conjunction with the Appendix 5B (QuarterlyCash Flow Report). TRINIDAD Operations Overview Subsequent to quarter end, Range provided an update where itacknowledged that it has been a difficult year thus far for all involved inthe Company, resulting largely from a delay in the timing of key events and afall in the value of the Company's share price. From the board's view, Range is now positioned to fulfil its keycorporate and operational goals moving forward, namely to lift and maintainproduction in Trinidad to 4,000 bopd by the end of 2014 and to 9,000 bopd bythe end of the 2015. A key milestone in the delivery of this goal has been thecompletion of a comprehensive field development plan ("FDP") in Trinidad,compiled by management and independent technical experts as part of theprocess of finalising a reserve-based lending facility. The FDP sets out thegeological, operational and financial parameters for the exploitation of theCompany's P1 Reserves over the next three (3) years. This represents more thanthree (3) months' work by both internal and external sources and provides aclear development framework for our initial production increase in Trinidad. It is important to note that the development plan does not takeinto account any incremental production from P2 / P3 reserves, prospectiveresources or exploration success. The Management believes it sets a veryrealistic benchmark to move from current production through to 4,000 bopd bythe end of 2014 and 9,000 bopd by the end of 2015, through conventional andunconventional (waterflooding) work programmes. As previously advised, Range identified the need to effectivelytake its drilling rigs offline and subject them to a rigorous maintenance andtesting programme to ensure that the drilling targets as part of the fielddevelopment plan can be met and previous delays and breakdowns are avoided tothe maximum extent possible, a process that has largely been completed. The timing of the ramp up in production and the drilling rigs allcoming back on line in Trinidad is extremely beneficial with regards to therecent changes to the fiscal regime in Trinidad which will see significantfinancial benefits accrued by the Company over the coming years. During the quarter, the Company continued with the optimizationwork, with the next 10 wells scheduled to be accessed by the Company'sproduction and work over rigs as well as the re-entry of the QUN16 well.Re-activation of the QUN16 well will be performed using one of the Company'sproduction rigs. This will add new reserves and production, while furtherextending the Lower Forest trend to the east of the QUN16 well andestablishing a large area for low risk infill drilling between the well andthe current Lower Forest development. The Company aims to have all six rigs operational during thisquarter, with Rig 6 having successfully completed annual certifications andinspections. Range has made a decision to use Rig 6 for heavy workovers of thewells in Morne Diablo as mentioned above, in order to swiftly ramp upproduction prior to having it converted back to a drilling rig, whilst Rig 2will be mobilised over to South Quarry to commence development work inconjunction with a production rig that is currently performing well workovers. The Company also reports that Rig 8 has been repaired and rigged upon the MD248 location and is now awaiting the requisite regulatory sign off.Following approval, the rig will immediately resume drilling the MD248 well toits target depth. Following completion of the MD248 well, and depending on theresults, the Company will look to either drill the adjacent MD61 well toestablish formation production from Lower Cruse development wells, or move toa new location to target the Herrera formation. Initial site preparation forthe Herrera location has already been completed. The current development programme is targeting all horizons,including a number of wells to be drilled to the semi-exploratory Lower Cruseand exploratory Herrera horizon, which are additional to the P1 developmentprogramme per the FDP. The Shallow Forest development programme will commencein November 2013 and comprises of a 66 well programme. In addition to the field development plan, Range is in advancedstages of securing additional rigs on "Joint Venture" terms with an oilservices provider to ensure that the Company's aggressive explorationprogramme continues with multiple Lower Cruse and Herrera targets, the NikoResources farm-in acreage and the potential of being awarded a block in theupcoming onshore bid round. Morne Diablo Waterflood Within the Shallow Forest Formation is also the shallow pilot waterflood programme over eight acres, which has produced an incremental 40,000bbls since its inception in December 2009 from depths of between 150 ft. and300 ft. Range intends to expand this eight acre pilot programme up to a totalof 80 acres with the commencement of production in the second half of 2014 totarget a production rate of up to 650 bopd. The Company has received regulatory approval on its proposed waterflood programmeand will commence field development in line with the work programme. South Quarry The Company will shortly commence further development of the SouthQuarry field consisting of 4 approved well locations, with the mobilisation ofthe drilling Rig 2 and auxiliary equipment expected this quarter. Previousdrilling campaigns have yielded higher than average rates and recoveries dueto high geopressure in the area. Given the proximity to establishedproduction, the South Quarry programme has a high probability of boostingproduction, while extending the producing trends and establishing multiplelocations for future drilling. Beach Marcelle Development opportunities in the Beach Marcelle field compriseinfill drilling opportunities and development of undrilled fault blocks, pluswater flooding to improve recovery. The figure below shows the planned areasfor future infill drilling and water flooding. With 75% (12.8 MMbbls) ofRange's 1P proved undeveloped reserves belonging to the Beach Marcellewaterflood project, the focus remains on expediting the current simulationphase in parallel with moving a rig to site to begin well integrity andworkover operations. The Company is also looking at deepening of up to 6 wellsfollowing the receipt of environmental approvals earlier in the year. Within the Beach Marcelle field, successful deepening of existingwell bores is expected to recover up to 90 Mbo per well at approximately 80bopd initial production, and at costs significantly lower than drilling andcompleting new wells. The Beach Marcelle field falls within the Guayaguayare sub-basinthat has numerous oilfields around its rim, including the Navette and Goudronfields and the offshore Galeota and Samaan fields. Range's waterfloodprogramme in the field builds upon 3 previously successful, but prematurelyhalted, waterflood programmes performed by Texaco in the 1950's. With modernreservoir and waterflood simulation software available, it is expected thatRange will sweep the remaining proven reserves a lot more efficiently than the3 original waterflood programmes. The programme will also be targetingadditional fault blocks within the Beach Marcelle license, not yet previouslywaterflooded, yet comprising a portion of the 12.8 MMbbls of 1P provedundeveloped reserves. The main producing horizons are the Upper, Middle and Lower GrosMorne formation (which are geologically equivalent to the Forest formation inMorne Diablo and South Quarry). They range in depths from 300 ft. to 5000 ft.Oil averaging 34 degrees API (but ranging from 15 to 40 degrees API) iscurrently produced from eleven wells at a rate of roughly 22 bopd. Niko Resources Farm-in During the quarter, the Company announced that it had reached anagreement in principle with a leading Canadian exploration and developmentcompany, Niko Resources Ltd. ("Niko") (TSX:NKO) regarding the GuayaguayareBlock in Trinidad. The Guayaguayare Block represents the largest addition toRange's Trinidad portfolio to date, increasing the Company's acreage positionby more than 280,000 acres. With several producing fields within the blockboundaries, including the Company's own Beach Marcelle Field, the GuayaguayareBlock combines shallow drilling targets with significant exploration potentialand an expansive area within a highly prolific petroleum system. With several high-impact prospects already identified on the block,the Niko farm-in presents Range with a perfect opportunity to add highlyprospective acreage on trend with its existing exploration, development andsecondary recovery projects, while leveraging its fleet of drilling andproduction rigs and operating experience within the region. Given theCompany's ongoing production operations in South Quarry, Morne Diablo, andBeach Marcelle, Range is uniquely positioned to operate future discoveries,both on or offshore, which in turn should result in appreciable synergy andlower operating costs. Niko currently holds shallow and deep Production Sharing Contractsfor 65% of the onshore portion and 80% of the offshore portion of the licensearea with the Guayaguayare Block comprising 280,170 shallow acres and 293,999deep acres. Trinidad's State Owned petroleum company, Petrotrin, holds theremaining balance of the interests (35% onshore and 20% offshore). The Block surrounds Range's Beach Marcelle Field, and extends southto the limits of Trinidad's territorial waters. In addition to provenTertiary-age exploration targets, the block is believed to hold significantpotential in the Cretaceous section, which has been successfully developed inthe Eastern Venezuelan basin. There are four prospective onshore fields within the GuayaguayareBlock, each considered to have significant potential for oil, whilst theoffshore structural complex is believed to have significant potential forlarge gas discoveries with several large structures mapped. According to the agreement in principle, Range will earn 50% ofNiko's existing interests in the deep and shallow rights covering both onshoreand offshore areas, with the consortium to drill two onshore wells: oneshallow onshore well to a maximum of 5,000 ft., and one deep onshore well to aminimum of 5,000 ft. In the event of a discovery from either of the twoinitial wells, the consortium with look to drill an initial appraisal well.The first well is targeted to spud in early 2014. Range will fund the two onshore wells and the potential initialappraisal well at its sole expense, and will split costs 50/50 with Niko inthe offshore well, and any other costs going forward. Under the agreement,certain payments will be made to Niko upon achievement of commercialproduction from any discoveries. The preparation of final documents for the Company's farm-in onNiko's Guayaguayare Block has been concluded with execution expected shortly. Strategic Partnership with a leading International Drilling andOil-field Services Provider Range is currently in advanced discussions with a leadingInternational Drilling and Oil-field Services Provider, with a view tomaximise the development of current acreage and potential new licenses,through bringing in additional rigs, infrastructure and manpower to Trinidad.The partnership will complement the Company's existing drilling fleet of 6rigs and over 250 employees, as the Company looks to rapidly ramp upactivities in Trinidad through expansion and organic growth. New Positive Fiscal Incentives The Company released an update with respect to newly proposedbudget incentives for oil and gas companies introduced by the Minister ofFinance and Economy of Trinidad and Tobago in the 2014 Budget Statement toParliament on 9 September 2013. These newly proposed budget incentives, whichespecially reward companies with accelerated development and explorationprogrammes, are expected to have a significant positive impact on Range'sreturns from its proposed production expansion plans. The new incentives allow for further accelerated capital deductionsthan the past, which are summarized in the table below with regards to thecapital allowances: EXPLORATION CURRENT PROPOSED (effective 1 January 2014)Tangible Assets Intangible Assets 2014 - 2017 2018 + Tangible & Tangible & Intangible Intangible Assets Assets - Initial - Initial Allowance - Allowance 100% - Allowance 50% ofAllowance 20% of 10% of cost of cost - year 1 cost - year 1cost - Annual Allowance - Allowance 30% of- Annual 20% of residual cost - year 2Allowance 20% ofcost less IA - Allowance 20% of cost - year 3 DEVELOPMENT CURRENT PROPOSEDTangible Assets Intangible Assets Tangible & Intangible Assets- Initial - Initial Allowance - Allowance 50% of cost - year 1Allowance 20% of (IA) 10% of costcost - Annual Allowance - Allowance 30% of cost - year 2- Annual 20% of residualAllowance 20% ofcost less IA - Allowance 20% of cost - year 3 WORKOVERS AND QUALIFYING SIDETRACKS CURRENT PROPOSEDTangible Assets Intangible Assets Tangible & Intangible Assets- Initial - Allowance 100% of - Allowance 100% of costs forAllowance 20% of costs both tangible and intangiblecosts assets - year 1 - AnnualAllowance 20% ofcost less IA Table 1: Summary of the New Fiscal Incentives In addition to these capital allowance proposals, the investmenttax credit (being 20% of capital expenditure) against the Special PetroleumTax is now able to be carried forward into the subsequent year, wherepreviously it was only able to be claimed in the year expenditure wasincurred. Bid Round Update The Company has evaluated the 2013 onshore bid round data packageand submitted a bid in line with the Company's strategic growth plan. TheCompany will update the market with further progress in due course. New Appointments to Management and Operational Team The Company appointed Ash Mangano as the Company's Vice Presidentin Trinidad to oversee Range's Trinidad corporate activities and workalongside current Trinidad Chief Operations Officer, Walter Cukavac, to ensureeffective management and execution of all Range Trinidad projects, whileidentifying and capitalising on additional growth opportunities for theCompany. Mr Mangano has significant experience in international oil and gas,working on a diverse range of offshore and onshore projects in North America,Oceania, and the West Indies. Range has also engaged a Senior Reservoir Engineer, with more than15 years' experience in enhanced oil recovery projects and reservoircharacterization in Trinidad, to work with the Exploration and Exploitationgroup in expediting the Beach Marcelle and Morne Diablo waterflood projects.The Engineer assists with characterising all target reservoirs to ensure themost high-impact wells are drilled with priority. In preparation for the drawdown of the reserve-based lendingfacility and in conjunction with the field development plan, Range employed anexperienced Rig Maintenance Manager to oversee the repairing and improving ofall drill rigs owned by the Company, a process that has largely beencompleted. GEORGIA Following on from the completion of the 200 km 2D seismic programmeearlier this year, the Company engaged Senior Geologist, Dr. M. Arif Yuklerand his team to perform a full review of both the conventional andunconventional (Coal Bed Methane) hydrocarbon potential on blocks VI a and VIb. Dr. Yukler has more than 38 years of experience in the international oil &gas industry, and has advised companies and government entities of all sizefrom small caps to super-majors, as well as state regulatory authorities onthe management of resources and exploration areas. Dr Yukler's review incorporated the 610 km of 2D seismic acquiredacross the two licences in 2009 and 2012/13, along with incorporating all ofthe older Soviet data that existed across the blocks including seismic, welllogs and geochemical information. Following the extensive review, which included pseudo 3Dquantitative basin modelling of the blocks, the targeted hydrocarbon in-placeand reserve calculations for blocks VI a and VI b were completed with theresults being highly encouraging as summarised below: Conventional Conventional Oil Conventional GasUndiscovered Oil / (mmbbls) (Tcf)Gas in Place (best estimate) (best estimate) Total Oil / Gas in 403 18.4Place Range Attributable 181 8.3(45%) * Low to high ranges of the in-place undiscovered oil and gasvolumes have not yet been estimated. Range is currently undertaking furthermodelling work to provide such ranges CBM Reserve Proved (1P) Proved & Proved & EstimatedEstimates Probable (2P) Probable & Total Reserve Reserve (Bcf) Possible Gas-in-Place (Bcf) (3P) (Tcf) Reserve(Bcf) Total Gas In Place 0 0 508 3.16 Range Attributable 0 0 229 1.42(45%) * The reserve estimates reflect conservatively applied recoveryfactors. It is noted that recovery factors for CBM range as high as 60% basedon feasibility work performed to date Table 2: Hydrocarbon in-place and Reserve Calculations for Blocks VI a and VI b Coal Bed Methane Work was also undertaken to review the coal bed methane ("CBM")potential that existed across the licences, over and above the previouslyreported Tkibuli prospect, with the total CBM resource calculated using theisopach maps for the Upper Bathonian coaly section. The coaly section covers368 km2 and 83 km2 in blocks VI a and VI b, respectively. A continuously thickand high quality coal area of 36 km2 was delineated by more than 300 wells inBlock VI a. All these wells encountered gas in the Upper Bathonian coallysection. The results of this extensive review clearly show that both blockshave significant gas potential and good oil potential. The compilation of allthe available data and re-evaluation of the geochemical data show the coalpresent in the blocks have similar high hydrocarbon generation capabilities asthe coals in the North Sea, Indonesia and New Zealand. With the addition ofthe amounts of hydrocarbon generation in the Upper Bathonian, the totalresource is anticipated to be higher than the amounts given above and will bedetermined at a later date. The Company has presented the CBM potential to the Georgian StateAgency and the Georgian Oil and Gas Corporation with both parties agreeing onthe significant potential that exists across the licence areas. The news ofthe highly prospective hydrocarbon play has been conveyed to the EnergyMinister and the Prime Minister, who see this potential as an opportunity toimprove the energy outlook for the Country. Proposed Work Programme The Company is currently evaluating the selection of a suitabledrill location and given the high quality of the seismic coverage and qualityon CBM, the Company is focussing on a high probability CBM drill location witha number of potential locations with good coal well coverage having beenidentified. The analysis shows that the average CBM content is more than 15 m3/tof coal. GIG Joint Venture and Farm-Out Discussions The results are pivotal in cementing the CBM joint venture with GIGas development plans are finalised. Further, Range continues with advanceddiscussions with a number of parties with respect to potential farm-outopportunities across both the conventional and unconventional prospectsidentified on the Company's licenses. GUATEMALA During the previous quarter, the Operator (Latin American ResourcesLtd) successfully drilled Atzam #4 well at the Atzam Oil Project in Guatemala(Range 32% interest) to a target depth of 4,054 ft. with the Companyannouncing that it had encountered significant initial oil and gas productionof a 610 bopd average rate over a 24 hour period from a perforated 7 footsection in the Upper C17 carbonates (2,846-2,853 ft.) in the well, withoutacid wash or reservoir stimulation with a submersible pump. Subsequently, theAtzam #4 well has been operating on continuous production throughout.Significantly, the well is still being produced on a highly restricted choke(12/64 inch), whilst maintaining a constant well head pressure in excess of300 psi and no water production to date. The Operator has completed the Project's second oil sales contractthis week, with the sale and delivery of a further 3,500 barrels of oil toPerenco Guatemala, on the same terms as the first oil sales as previouslyadvised. These sales have generated netbacks of approximately $65 per barrel,confirming the economic credentials of the Atzam Oil Project and good fiscalterms for oil producers in Guatemala. The Operator is continuing to produce the Atzam #4 well on a highlyrestricted choke, with plans to increase the choke over time to in order tomaintain the reservoir integrity during this initial production phase. TheOperator will increase the choke to establish the optimal production rate forthis producing C17 carbonate section once the associated gas being producedfrom this zone naturally depletes and the upgrade on the Atzam oil storagefacilities is completed in the next month. Independent reservoir engineersRalph Davis have recommended that the well be produced at an optimalproduction rate of 466 bopd, whilst maintaining the reservoir's structure andintegrity. The Operator estimates the producing 6 foot C17 carbonate section(2846-2852ft) would produce in excess of 1,000 bopd on an open choke based onthe flow rates recorded to date on various choke sizes up to 32/64ths,together with the downhole and well head pressures data from this zone.Importantly the ongoing production from the C17 carbonate section hascontinued from natural reservoir pressures and without assistance from asubmersible pump, which is normally used for producing these carbonatesections. Subsequent to quarter end, the Operator confirmed that productionfrom the Atzam #4 well has continued throughout October and that a new oilsales contract with the sale and delivery of a further 1,500 barrels of oil toPerenco Guatemala has been completed, on the same terms as the first oil salesas previously advised. These sales will generate netbacks of approximately $60per barrel for the project partners. Updated Atzam #4 Reserve Report Independent Reservoir Engineers, Ralph E Davis (RED) from Houston,have completed an updated Atzam #4 well independent reserve report, producingan initial proven reserve (1P) of 362,515 barrels for the producing 6 footsection of the C17 carbonate section alone. The adjacent 7 foot section in the C17 carbonates is still to bebought onto production, and this would be converted into 1P reserves once thisoccurs, taking the 1P reserve estimate in excess of 500,000 bbls for the C17section. The highly prospective C13 and C14 carbonates in the Atzam 4 well arestill to be flow tested and would also be converted from 2P to 1P reservesfollowing a successful programme. The initial Atzam #4 independent reserve report from February 2013stated a 2.3m barrel 2P reserve based on the drilling and logging data fromthe well. The updated reserve report with the conversion of an initial 1Preserve for the producing 6 foot section in the C17 carbonates. Atzam #5 Drilling Set To Commence Subsequent to quarter end, the operator has confirmed thatpreparations for the drilling of the Atzam #5 development well at the AtzamOil Project in Guatemala (CTR: 60%) are significantly advanced, with thedrilling pad and location construction now nearing completion and drillingexpected to commence in November. The scheduling for the drilling of the Atzam#5 well has been delayed from late September due to an unusually late end tothe heavy rains experienced in the wet season in Guatemala. The well locationfor Atzam #5 is approximately 1,100m to the south-east of the Atzam #4production well and the well has been designed to test the same carbonatereservoir intervals that were intersected and produced oil shows in Atzam #4. Like Atzam #4, the Atzam #5 well will be drilled to a depth ofapproximately 4,000 feet and will target the C18 and C19 carbonate reservoirsas the primary objectives in addition to the producing C17 carbonate zone. TheC18 and 19 carbonates were intersected in Atzam #4 and produced strong oilshows at surface during the drilling of the well but were unable to beeffectively production tested. Following the successful drilling of Atzam #5 and the well becomingthe second major producing well on the Atzam Oil Project, the Operator istargeting a combined production rate in excess of 600 bopd from both wells. Tortugas Salt Dome Projects The Operator has been advancing operational plans to undertake the2 well re-entries on the Tortugas Salt Dome structure in early 2014 aspreviously planned for the 2014 operating schedule. The well re-entries on twoTortugas wells, 63-4 and 63-5 are expected to produce between 200-300 bopdeach of high quality 34°API oil based on historical flow rates and production.In the 1970s, two wells flowed oil at initial rates over 1,500 bopd, howeverwere subsequently suspended. The Tortugas Salt Dome structure is a suspended oil field, withMonsanto Chemical having drilled 17 wells on the structure exploring forsulphur. One of the wells (T9B) experienced an oil blowout at approximately1,500 feet, with the majority of the other wells having oil shows in multiplezones. Increased Holding into LAR During the quarter, Range increased its holding into the OperatingCompany, LAR from 10% to 20%, giving a net attributable interest in theGuatemalan Projects of 32%. PUNTLAND Puntland Onshore During the year, Range's JV partner and operator of its PuntlandProject, Horn Petroleum Corp (TSXV: HRN), has been focused on makingpreparations for a seismic acquisition campaign in the Dharoor PSA, which willinclude a regional seismic reconnaissance grid in the previously unexploredeastern portion of the basin as well as prospect specific seismic to delineatea drilling candidate in the western portion of the basin, where an activepetroleum system was confirmed by the recent drilling at the Shabeel-1 andShabeel North-1 locations. The focus of the Dharoor seismic programme will beto delineate new structural prospects for the upcoming drilling campaign. Based on the encouragement provided by these two Shabeel wells, theJV has entered into the next exploration period in both the Nugaal and DharoorValley Production Sharing Contracts ("PSCs") which carry a commitment to drillone well on each block within an additional 3 year term. The currentoperational plan would be to contract a seismic crew to acquire additionaldata in the Dharoor Valley block and to hold discussions with the PuntlandGovernment to gain access regarding drill ready prospects in the Nugaal Valleyblock. Puntland Offshore During the June 2012 quarter, Range entered into a conditionalagreement with the Puntland Government with respect to obtaining a 100%working interest in the highly prospective Nugaal Basin Offshore Block. TheBlock is an extension of the onshore Nugaal Region which has the potential fordeltaic deposits from the Nugaal Valley drainage system and comprises over10,000km. The agreement is subject to a formal Production Sharing Agreement(PSA) being entered into and the receipt of all necessary regulatory approvalsand given the current political situation in Puntland it is unlikely to beprogressed in the coming quarter. COLOMBIA Preparations for the seismic programme will be initiated subject tofurther financing becoming available with planned mobilisation to occur lateQ4 2013. Initial G&G evaluation of the blocks shows 15 potential leads, withpotential upside to be imaged in greater detail with high resolution 3Dseismic surveys. The block's acreage lies to the north of large provenreserves across border in Ecuador, with production in excess of 30,000 bopd.The blocks are surrounded by successful producing fields (Ecopetrol, GranTierra, Suroco). Typical well productivity in the Putamayo basin ranges from1,000 to 2,000 bopd, with oil in producing wells being medium- typically 23°API on average. Farm-in interest from a number of parties has been received, andRange will be required to find suitable financing during the current quarter(i.e. completion of Texas sale) with regards to its participation in theupcoming 350km2 of 3D seismic programme. TEXAS The Company is proceeding with completion of its Texas asset salefor a total cash consideration of US$30m (US$25m initial payment plus $US5m inroyalty production payments to be received from future production) havingconcluded all key completion requirements. Subsequent to quarter end, thePurchaser has informed Range of the delays in completing the settlement whichhave largely been a result of unanticipated changes required for corporaterestructuring by the purchaser which are currently expected to be resolvedwithin the coming weeks. Range agreed to extend the settlement deadline andwill update the market when funds are received. CORPORATE During the previous quarter, the Company announced its proposal toundertake a strategic merger with International Petroleum Limited (NSX: IOP)to create a leading ASX and AIM listed oil and gas Company with a strongproduction growth profile from the on-going development of its significantreserves and resources base. During the quarter, the Company was been informed thatInternational Petroleum is in negotiations with a third party relating to thepotential sale of its Russian assets for cash consideration and subsequent toquarter end, International Petroleum informed that market that it had enteredinto two binding conditional terms sheets for the sale of its assets inKazakhstan and Russia for US$60m. Whilst the sale process for the Russian assets was known to andsupported by the Range board, the final terms of the proposed transaction, andthe sale of the Kazakhstan Assets have only now been defined. As a result ofclarity on the sale of these assets, the likely proceeds from this sale andthe associated shift in focus of International Petroleum to its Africanassets, Range will now identify and consider a range of corporate alternativesto the original merger proposal, which may or may not include a merger of thetwo companies, albeit on terms to be renegotiated. Subsequent to quarter end, Range announced that as part of theCompany's move to significant operational focus and expansion in Trinidad, aboard process has commenced with the objective of finding a suitable ManagingDirector to take the Company through to its 9,000+ bopd target. Appendix 5B Summary - Consolidated Statement of Cashflow Current Year to date Quarter (3 months) $US'000 $US'000 Cash flows related to operatingactivities Receipts from product sales and relateddebtors 6,237 6,237Payments for:(a) exploration & evaluation (790) (790)(b) development (3,224) (3,224)(c) production (3,054) (3,054)(d) administration (1,640) (1,640)Dividends received - -Interest and other items of a similarnature received 4 4Interest and other costs of financepaid (688) (688)Taxes paid (477) (477)Other (provide details if material) (1,030) (1,030) Net Operating Cash Flows (2,602) (2,602) Cash flows related to investingactivitiesPayment for purchases of:(a) prospects - -(b) equity investments - -(c) other fixed assets (37) (37)Proceeds from sale of:(a) prospects - -(b) equity investments - -(c) other fixed assets - -Loans to other entities (700) (700)Loans repaid by other entities - -Other - net cash acquired onacquisition of subsidiary - - Net investing cash flows (737) (737) Total operating and investing cash flows (3,339) (3,339) Cash flows related to financingactivities Proceeds from issues of shares,options, etc. 3,557 3,557Proceeds from sale of forfeited shares - -Proceeds from borrowings 7,671 7,671Repayment of borrowings (6,522) (6,522)Dividends paid - -Other (provide details if material) - - Net financing cash flows 4,706 4,706 Net increase (decrease) in cash held 1,367 1,367 Cash at beginning of quarter/year todate 5,205 5,205Exchange rate adjustments to item 1.20 - - CASH AT END OF QUARTER 6,572 * 6,572 * * This number includes US$3.48m performance bond for Colombia Yours faithfully Peter LandauExecutive Director Contacts Range 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 (Joint Broker) RFC Ambrian Limited (Nominated Advisor)Richard Greenfield / Rob Collins / Alexandra Carse Stuart LaingT: +44 (0) 207 647 2800 T: +61 (8) 9480 2500 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 &gas exploration 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 withthree onshore 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 inonshore blocks VIa and VIb, covering approx. 7,000sq.km. Range completed a410km 2D seismic programme with independent consultants RPS Energy identifying68 potential structures containing an estimated 2 billion barrels ofundiscovered 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 arevised development strategy that will focus on low-cost, shallow appraisaldrilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli")coal deposit, which straddles the central sections of the Company's twoblocks. - In Puntland, Range holds a 20% working interest in two licensesencompassing the highly prospective Dharoor and Nugaal valleys. The operatorand 60% interest holder, Horn Petroleum Corp. (TSXV:HRN) has completed twoexploration wells and will continue with a further seismic and well programmeover 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. Theproject area encompasses approximately 1,680 acres in one of the most prolificoil and gas producing trends in the State of Texas. Independently assessed 3Preserves in place (on a 100% basis) of 228 Bcf of natural gas, 18 MMbbl of oiland 17 MMbbl of natural gas liquids. - Range holds a 21.75% interest in the East Texas Cotton ValleyProspect in Red River County, Texas, USA, where the prospect's project areaencompasses approximately 1,570 acres encompassing a recent oil discovery. Theprospect has independently assessed 3P reserves in place (on a 100% basis) of3.3mmbbls of 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 ResourcesLimited (ASX: CTR) which holds a 70% interest in Latin American Resources(LAR). LAR holds an 80-100% interest in two oil and gas development andexploration blocks in Guatemala with Canadian NI 51-101 certified proved plusprobable (2P) reserves of 2.3 MMBBL (100% basis). Range also holds a 20%interest in LAR. Table of Reserves and Resources Detailed below are the estimated reserves for the Range projectportfolio. 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** ** 32% ** 0.74** ** 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 ChapmanRanch asset, which are net of government and overriding royalties as describedin the Forrest Garb report. ** The reserves estimate for the Guatemalan Blocks in which LAR(and CTR) have an interest in is as reported by CTR. CTR has not reported 1Pand 3P estimates, but Range is seeking such information from CTR for futurereporting purposes. Detailed below are the estimated resources and oil-in-placedelineated across Range'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 relationto reserves 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 (andCTR) have an 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. All of the technical information, including information in relationto reserves 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 updatereserves estimates for the North Chapman Ranch Project and East Texas CottonValley referred above have been formulated by Forrest A. Garb & Associates,Inc. (FGA). FGA is an international petroleum engineering and geologicconsulting firm staffed by experienced engineers and geologists. CollectivelyFGA staff has more than a century of worldâ€wide experience. FGA haveconsented in writing to the reference to them in this announcement and to theestimates of oil and natural gas liquids provided. The definitions for oil andgas reserves are in accordance with SEC Regulation Sâ€X an in accordance withthe guidelines of the Society of Petroleum Engineers ("SPE"). The SPE Reservedefinitions can be found on the SPE website at spe.org. RPS Group is an International Petroleum Consulting Firm withoffices worldwide, who specialise in the evaluation of resources, and haveconsented to the information with regards to the Company's Georgian interestsin the form 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 Valleyprospects are internal estimates reported by Africa Oil Corp, the operator ofthe joint venture, which are based on volumetric and related assessments byGaffney, Cline & Associates. The TSX certified 51-101 certified reserves with respect to theGuatemalan project are as reported by ASX listed Company Citation Resources(ASX: CTR). In granting its consent to the public disclosure of this pressrelease with respect 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 projectis sourced from the publically available references to a report by AdvancedResources International's ("ARI") report in 2009: CMM and CBM development inthe 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'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 Ecopetrol1987. SPE Definitions for Proved, Probable, Possible Reserves andProspective Resources Proved Reserves are those quantities of petroleum, which byanalysis of geoscience and engineering data, can be estimated with reasonablecertainty to be commercially recoverable, from a given date forward, fromknown reservoirs and under defined economic conditions, operating methods, andgovernment regulations. Probable Reserves are those additional Reserves which analysis ofgeoscience and engineering data indicate are less likely to be recovered thanProved Reserves but more certain to be recovered than Possible Reserves. Possible Reserves are those additional reserves which analysis ofgeoscience and engineering data indicate are less likely to be recoverablethan Probable Reserves. 1P refers to Proved Reserves, 2P refers to Proved plus ProbableReserves and 3P refers to Proved plus Probable plus Possible Reserves. Prospective Resources are those quantities of petroleum estimated,as of a given date, to be potentially recoverable from undiscoveredaccumulations by application of future development projects. ProspectiveResources have both an associated chance of discovery and a chance ofdevelopment. Prospective Resources are further subdivided in accordance withthe level of certainty associated with recoverable estimates assuming theirdiscovery and development and may be sub-classified based on project maturity. Contingent Resources are those quantities of hydrocarbons which areestimated, on a given date, to be potentially recoverable from knownaccumulations, but which are not currently considered to be commerciallyrecoverable. Undiscovered Oil-In-Place is that quantity of oil which isestimated, on a given date, to be contained in accumulations yet to bediscovered. The estimated potentially recoverable portion of suchaccumulations is classified as Prospective Resources, as defined above.