STA.L Regulatory News (STA)

30 April 2014 By E-Lodgement ASX Code:RRS and AIM Code: RRL THIRD QUARTER REPORT FOR PERIOD ENDING 31 MARCH 2014 The Board of Range Resources Limited ("Range" or "the Company")provides the following update regarding its activities during the three monthsended 31 March 2014 to be read in conjunction with the Appendix 5B (QuarterlyCash Flow Report), and Appendix 3B (Issue of Shares) which follow theannouncement. TRINIDAD Production Overview Total gross oil production for the quarter was 47,565 bbls (averageof 529 barrels of oil per day "bopd") compared to an average of 594 bopd inthe previous quarter. The decrease in production was primarily due to: - Production and drilling staff undergoing annual plannedre-certification as part of standard Petrotrin requirements. - One of the production rigs requiring maintenance work. Operations Overview - Operations continued without any safety or environmentalincidents and have been LTI-free since September 2013. - Three of the fleet of six drilling rigs are fully operational anddrilling ahead, with four wells successfully drilled and completed during thequarter. The fourth drilling rig (rig 1) has now undergone preliminaryregulatory inspections prior to becoming operational. - The maintenance programme for the remaining heavy drilling rigs 6 & 7continues. - Three of the fleet of six production rigs are online, andcontinue production work. - Subsequent to quarter end, the Company reports that despitenumerous attempts to rescue the MD248 well following continued difficulties,including with the attempted sidetrack, the decision has been taken to suspendthe well, in order to better utilise the drilling rig. MD248 has been aproblematic well from a drilling point of view but the prospect remains anattractive target. Rig 8 is now being de-mobilised from the well site inpreparation for redeployment. - The Company has received Petrotrin approval for its BeachMarcelle waterflood programme and is currently awaiting further regulatoryapprovals. - Engineering, design and study work continues on the Morne Diablowaterflood project, while the Company waits on final regulatory approvals(having already received Petrotrin approvals) to proceed with facilities andinfrastructure installation. Farm-in agreement with Niko Resources As announced on 17 December 2013, Range formally executed thefarm-in agreement with Niko Resources Ltd. ("Niko"), regarding theGuayaguayare Block in Trinidad, subject to final regulatory approval. Underthe terms of the farm-in agreement, Range will earn a 50% share of Niko'sexisting interests in the Guayaguayare Block in return for drilling twoonshore exploration wells. Range will also drill one offshore well and oneonshore appraisal well contingent on exploration success, sharing costs withNiko on a 50/50 basis. The Company and the operator, Niko, are finalisingproposed plans and drill locations for the first onshore well, which is nowexpected to spud in Q2 2014, in accordance with the farm-in agreements. St Mary's Block Award During the quarter, the Company announced that it has beensuccessful with its bid for the St. Mary's block in Trinidad following thesubmission in the Trinidad Onshore Bid Round 2013. The successful bid wasformally announced by the Ministry of Energy of Trinidad at the Trinidad andTobago Energy Conference in February 2014. The St. Mary's block comprises44,731 acres spread over 4 sub-blocks contiguous to Range's existing MorneDiablo license and the Guayaguayare license. The formal agreements are subjectto continued negotiation with the Ministry of Energy of Trinidad and Tobagoand the Company will make a further announcement on the future plans for theSt Mary's license in due course. GUATEMALA Subsequent to quarter end, Latin American Resources (the"Operator"), has drilled the Atzam #5 well at the Atzam Oil Project inGuatemala to its planned total depth of 4,025 feet. Following completion ofthe drilling operations of the well, the Operator is currently preparing thefull suite of electric logs to be run from the last casing point at 3,600 feetdown to the well's total depth of 4,025 feet. This electric logging run willcomplete the detailed well data across the primary and secondary carbonatereservoir target sections intersected by the well, and determine the scope ofoperations for the initial flow testing programme. The flow testing programme will commence on the primary reservoirsections immediately following independent evaluation and analysis of the fullsuite of the Atzam #5 electric logs by Schlumberger, and other externalconsultants as required. The evaluation of the electric logging data willdetermine the optimal flow testing programme for the well on the prioritycarbonate reservoir sections. PUNTLAND During the quarter Range's Joint Venture partner and operator, HornPetroleum Corporation ("Horn Petroleum" TSXV: HRN) re-commenced somepreliminary groundwork in Puntland. This preliminary work included fieldresearch and reconnaissance across both sites as well as a review of theoperating environment, the results of which are encouraging in terms of localgrass-roots support for operations and the ability to get work done. At thesame time it gave the operator a chance to meet the new President. MarkDingley the COO of Horn Petroleum said: "The transition of PresidentAbdiwelli's government has been smooth and as such meetings with him have beenpositive. The leadership of the PPMA has remained unchanged allowing forcontinuity in the management of the PSA's." The political situation still remains complex, however,characterised at the highest level by continued discussions regarding theapplication of the Somali federal system. The issue of the contested territoryof Nugaal continues to be a significant challenge for Somaliland and Puntlandand has a direct impact on the joint venture's ability to access the NugaalBlock. Efforts are focused on making preparations for a seismic acquisitioncampaign in the Dharoor Valley area which will include a regional seismicreconnaissance grid in the previously unexplored eastern portion of the basinas well as prospect specific seismic to delineate a drilling candidate in thewestern portion of the basin where an active petroleum system was confirmed bythe drilling of the Shabeel-1 and Shabeel North-1 wells. GEORGIA During the quarter, Strait Oil & Gas UK ("Strait") continued toadvance discussions with potential farm-in and buy-out parties in order toadvance exploration and development programmes or, alternatively, to partiallyor fully divest the licences. Agreement has been reached with the State Agency of Georgia todefer the commitment for a well to be drilled in Block VI (b) to the secondhalf of 2014, and the licence terms have been amended accordingly. COLOMBIA Range is working with the operator and the State to progresstowards a decision on the previously announced portfolio of work in Colombia,which will be the subject of a future announcement. TEXAS The Company acknowledges the failure of the purchaser to completethe sale of its Texas assets within the agreed timeframe. The Company is,therefore, also running a process to re-market the assets in order to divestthis non-core development project. CORPORATE Changes to the Board and Management team During the quarter, Range announced the appointment of Mr. RoryScott Russell as the Company's new Chief Executive Officer and the appointmentof two new Non-Executive Directors, Mr. Graham Lyon and Dr. ChristianBukovics. The Board of Range also announced the appointment of Dr. DouglasField as Vice President of Production and Mr. William Duncan as Vice Presidentof Exploration, both to be based in London. In Trinidad, the Company announcedthe appointment of Mr. Terry Motley, as in-country Operations Manager.Together these appointments bring a wealth of technical, operational andfinancial experience, to fully support the Company's future growth anddevelopment. Range also announced that Mr. Peter Landau changed from his role asan Executive Director, to a Non-Executive Director. LandOcean Strategic Alliance Subsequent to quarter end, the Company announced the completion ofa memorandum of understanding with LandOcean Energy Services Co Ltd("LandOcean") (SHE:300157), whereby the two companies intend to form astrategic alliance for the development of international oil and gas projects(the "understanding"). The understanding significantly increases Range'stechnical capabilities while also providing additional options for the fundingof future projects. The understanding between Range and LandOcean is set outin a non-binding term sheet, which is subject to final, legally bindingdocumentation. The Company is making significant progress towards enteringinto final documentation with LandOcean and will provide further details ofthe terms of the proposed strategic alliance in due course. Financing Update The new Range management team is reviewing a number of financingopportunities for its development projects in Trinidad. In addition theCompany is working to refinance all its existing debt. The Company isencouraged by the continuing discussions with a number of financing partiesand will provide updates when they have concluded. The company confirms that its current total debt position as at thedate of this report to be USD 10.5m, a reduction of USD 2.2m since 31 December2013 (as reported in the Half Yearly Report). As announced in the Company's Half Yearly Report, the Companyentered into a total of USD 6.5m loan agreements with Platinum Partners for aterm of six months dated 15 October 2013. 100 million Range shares were issuedas collateral against part of the loan. Platinum Partners agreed to extendtheir loan up to 30 April 2014, and Range continues to work with Platinum torepay the outstanding amounts. The Company can also confirm that the equity swap arrangementsentered into with Yorkville in May 2013 concluded during the quarter to 31March 2014. The remaining Yorkville swap amounts will come to a close duringthe current June quarter. The current outstanding balance on the SEDA backedloans is USD 1.8m. During the quarter, the Company drew an additional GBP 500k(approximately USD 844k) from Hudson Bay, on the same terms as the originalconvertible notes, being for an 18 month period at a coupon rate of 10%,convertible at a 90% VWAP conversion price. At the date of this report, atotal of USD 900k is still outstanding in respect of all these convertiblenotes. International Petroleum As previously announced, the proposed merger with InternationalPetroleum Ltd will not be proceeding. Constructive negotiations are continuing with regards to Range's$8m loan to International Petroleum. Commenting on today's announcement, Rory Scott Russell, CEO, said: "A great deal has been achieved during the period. Management hasbeen strengthened and all bring a wealth of technical, operational andfinancial expertise to the Board. Whilst we face many challenges, goingforward our focus is on developing and managing our assets, which I amconfident will result in an increase in production, and in strengthening ofour financial position." Investor Update Conference Call Details The Company will be holding a live conference call for analysts andinvestors on Wednesday 14 May at 09.00 GMT, which will also be broadcast liveover the internet. To participate in this conference call, and access full features,such as presentation slides, please log on to:http://www.meetingzone.com/presenter/?partCEC=2789681. A copy of the presentation will also be available from theCompany's website at www.rangeresources.com.au following the call. Alternatively, you can dial in via telephone. Please dial 0808 1090700 UK toll free, 1800 681 584 Australia toll free, or +44 (0) 20 3003 2666if you are calling from outside of the UK. The telephone operator will ask youto provide a password, which is "Range Resources". If you are unable to listen to the live web cast, it will bearchived for up to 7 days on the Company's website. Range's CEO, Rory Scott Russell, will be hosting the call and willprovide corporate and operational updates on the Company. Investors are reminded that they are welcome to submit questionsvia email ahead of the conference call to the Company's Financial PR, Buchanan- rangeqanda@buchanan.uk.com. Please send any questions by 09.00 GMT onFriday, 9 May. Issue of shares The Company announces the issue of 159,538,724 Ordinary Fully PaidShares pursuant to the conversion of debt, 7,500,000 Unlisted Options issuedfor debt conversion as per agreement (£0.005, 30 April 2017). Application will be made for the 159,538,724 new shares to beadmitted to trading on the ASX and AIM. Trading in the new shares is expectedto commence on AIM on or around 7 May 2014. Following the issue of these securities the total number ofsecurities on issue is as follows: 3,850,401,976 Ordinary Fully Paid Shares80,508,341 Options ($0.05, 31 January 2016)855,166 Unlisted Options (£0.04, 30 June 2015)7,058,824 Unlisted Options (£0.17, 30 April 2016)17,921,146 Class B Performance Shares5,180,000 Unlisted Options (£0.075, 31 January 2017)9,000,000 Unlisted Options (£0.125, 31 March 2015)15,708,801 Unlisted Options (£0.0615, 19 October 2015)32,275,862 Unlisted Options (£0.05075, 30 November 2015)5,000,000 Unlisted Options ($0.10, 31 January 2016)5,000,000 Unlisted Options ($0.06, 10 February 2016)146,533,850 Unlisted Options (£0.04, 30 April 2016)5,000,000 Unlisted Options (£0.037, 11 July 2016)476,190 Unlisted Options (£0.021, 25 July 2016)952,381 Unlisted Options (£0.021, 29 July 2016)6,714,284 Unlisted Options (£0.021, 31 August 2016)9,000,000 Unlisted Options (£0.02, 31 August 2016)3,947,369 Unlisted Options (£0.19, 30 September 2016)8,666,670 Unlisted Options (£0.18, 30 September 2016)694,445 Unlisted Options (£0.018, 31 October 2016)2,205,885 Unlisted Options (£0.017, 31 October 2016)1,250,000 Unlisted Options (£0.016, 31 October 2016)17,333,336 Unlisted Options (£0.015, 31 October 2016)3,000,000 Unlisted Options (£0.015, 30 November 2016)1,428,571 Unlisted Options (£0.014, 30 November 2016)3,923,077 Unlisted Options (£0.013, 30 November 2016)2,000,000 Unlisted Options ($0.0321, 11 December 2016)4,083,334 Unlisted Options (£0.012, 31 December 2016)20,545,457 Unlisted Options (£0.011, 31 December 2016)21,136,365 Unlisted Options (£0.011, 31 January 2017)6,250,000 Unlisted Options (£0.006, 31 March 2017)14,583,334 Unlisted Options (£0.006, 30 April 2017)7,500,000 Unlisted Options (£0.005, 30 April 2017) Appendix 5B Summary - Consolidated Statement of Cashflow Current quarter Year to dateCash flows related to operating activities (6 months) $US'000 $US'000 1.1 Receipts from product sales and 6,386 18,379 related debtors1.2 Payments for (a) exploration & evaluation (1,736) (3,573) (b) development (2,455) (9,157) (c) production (2,655) (8,709) (d) administration (1,681) (5,005)1.3 Dividends received - -1.4 Interest and other items of a similar nature received 3 81.5 Interest and other costs of finance - (873) paid1.6 Taxes paid/refunded (524) 6151.7 Other (provide details if material) - 2,513 Net Operating Cash Flows (2,662) (5,802) Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets (261) (495)1.9 Proceeds from sale of: (a) prospects - - (b) equity investments - - (c) other fixed assets - -1.10 Loans to other entities - (700)1.11 Loans repaid by other entities - -1.12 Other - net cash acquired on acquisition of subsidiary - - Net investing cash flows (261) (1,195)1.13 Total operating and investing cash flows (carried forward) (2,923) (6,997)1.13 Total operating and investing cash flows (brought forward) (2,923) (6,997) Cash flows related to financing activities1.14 Proceeds from issues of shares, - 3,557 options, etc.1.15 Proceeds from sale of forfeited - - shares1.16 Proceeds from borrowings 1,723 14,1081.17 Repayment of borrowings - (9,193)1.18 Dividends paid - -1.19 Other (provide details if material) - - Net financing cash flows 1,723 8,472 Net increase (decrease) in cash held (1,200) 1,4751.20 Cash at beginning of quarter/year to 7,880 5,205 date1.21 Exchange rate adjustments to item - - 1.201.22 Cash at end of quarter 6,680* 6,680* \* This number includes US$3.48m performance bond for Colombia Yours faithfullyRory Scott RussellChief Executive Officer Contacts Range Resources Limited Buchanan (Financial PR - UK)Rory Scott Russell Tim Thompson / Helen Chan T: +44 (0) 20 7466 5000 E: rangeresources@buchanan.uk.com GMP Securities Europe LLP (Broker) RFC Ambrian Limited (Nominated Advisor)Rob Collins / Liz Williamson Samantha Harrison / Trinity McIntyreT: +44 (0) 207 647 2800 T: +44 (0) 20 3440 6800 / +61 (8) 9480 2500 PPR (Financial PR - Australia) Dahlman Rose & Company (Principal American Liaison)David Tasker OTCQX International Market (U.S.)T: +61 (8) 9388 0944 Christopher Weekes / Stephen NashE: david.tasker@ppr.com.au T: +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 Trinidad; Puntland,Somalia; the Republic of Georgia; Guatemala; Texas, USA, and Colombia. - In Trinidad Range holds a 100% interest in holding companies withthree onshore production licenses and a 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. Range also has a farm in with NikoResources giving it exposure to circa 280,000 acres of prospective onshore andoffshore acreage. - In the Republic of Georgia, Range holds a 45% farm-in interest inonshore blocks VIa and VIb, covering approx. 7,000sq.km. The Company isfocussing on a revised development strategy that will focus on low-cost,shallow appraisal drilling of the contingent resources around theTkibuli-Shaori ("Tkibuli") coal deposit, which straddles the central sectionsof the Company's two blocks, along with attracting potential farm-in partnersacross the license areas given the recent review performed across thelicenses. - 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 programme. - Range is earning a 65% (option to move to 75%) interest in highlyprospective licences in the Putumayo Basin in Southern Colombia. Farmâ€ininterest from a number of parties has been received and preparations for theseismic programme will be initiated subject to further financing becomingavailable. - Range has taken a strategic stake in Citation Resources Limited(ASX: CTR) and Latin American Resources (LAR) which hold interest in two oiland gas development and exploration blocks in Guatemala with Canadian NI51-101 certified proved plus probable (2P) reserves of 2.3 MMBBL (100% basis).Range has a direct and indirect 32% interest in the Guatemalan Project. Table of Reserves Detailed below are the estimated reserves for the Range projectportfolio. Gross Oil Reserves Range's Net AttributableProject 1P 2P 3P Interest 1P 2P 3P OperatorOil & NGL -mmbblsTrinidad 17.5 20.2 25.2 100% 17.5 20.2 25.2 RangeGuatemala 0.4 2.3 - 32% 0.1 0.7 - Latin American ResourcesTotal Oil & 17.9 22.5 25.2 17.6 20.9 25.2LiquidsGas Reserves -TcfGeorgia - CBM - - 0.6 45% - - 0.2 Strait Oil & GasTotal Gas - - 0.6 - - 0.2Reserves With the exception of Guatemala, all of the technical information,including information in relation to reserves and resources that is containedin this document has been reviewed internally by the Company's technicaladvisor, Mr Mark Patterson. Mr Patterson is a petroleum geologist andgeophysicist who is a suitably qualified person with over 30 years' experiencein assessing hydrocarbon reserves and has reviewed the release and consents tothe inclusion of the technical information. The reserves estimates for the three Trinidad blocks have beenformulated by Forrest A. Garb & Associates, Inc. (FGA). FGA is aninternational 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. 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 TSX certified 51-101 certified reserves with respect to theGuatemalan project are as reported by ASX listed Company Citation Resources(ASX: CTR). 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 technical information included in this announcement withrespect to Georgia was prepared by Dr. M. Arif Yukler, COO of SOG Georgia. DrYukler is a geologist who is a suitably qualified person with more than 38years of experience in the international oil & gas industry, and in assessinghydrocarbon reserves. Dr Yukler has advised companies and government entitiesof all size from small caps to super-majors, as well as state regulatoryauthorities on the management of resources and exploration areas. Dr. Yuklerhas reviewed the release and consents to the inclusion of the technicalinformation with respect to Georgia. 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.