31 Oct 2008 08:04
Range Resources Ltd ABN 88 002 522 009 16 Southport Street West Leederville, 6007 Western Australia Tel: +61 8 6389 5700 Fax: +61 8 9381 4144 admin@rangeresources.com.au 31 October 2008 QUARTERLY REPORT FOR PERIOD ENDING 30 September 2008 The Board is pleased to provide the following commentary for Range ResourcesLtd ("Range" or the "Company") to be read in conjunction with the Appendix 5Bwhich is attached. The recently announced (29 October 2008) new managementteam, rights issue and offshore opportunities are of great significance toRange and the success of the Company moving forward (see summary below).
EXPLORATION UPDATE - Dharoor
Seismic operations are continuing in the Dharoor valley by Range's jointventure partner Africa Oil. The survey is being undertaken over the prospectivepart of the basin and will hopefully identify closures at the Jurassic andCretaceous level. Acquisition of a planned 2600 km of seismic data isapproximately 30% complete. Drilling at the planned Nogal valley sites is stillon `standby" with the security situation in the area to be reassessed inconjunction with the proposed drilling program in the Dharoor valley. At thisstage, spudding of the first well by Africa Oil is scheduled for the first
quarter of 2009.Offshore acreageAs recently announced, Range has entered into a Letter of Understanding(Agreement) with a leading Chinese geophysical service provider. The Agreementis in respect of completing a regional survey of offshore Puntland comprising15,000 kilometres of 2-D seismic data on Puntland's offshore oil and gas areas.
Under the terms of the Agreement, the contractor has conditionally agreed to finance 50% of the costs associated with the Seismic programme, by way of a multi client tender programme for off shore Puntland. A seismic charter is available at this stage to commence before the end of 2008. Led by the new management team (see below), the Company is in discussions with a number of parties regarding the joint venturing of Range's current 100% interest in offshore Puntland, and the balance of the funding of the seismic programme.
Mineral Exploration
With current world markets, poor commodity prices and sentiment towards earlystage resource exploration projects, Range will look to farm out or dispose ofits Western Australian tenements (gold and nickel potential) on an immediatebasis.Management
A summary of the management changes recently announced is set out below.
Mark Patterson - Executive Technical Consultant
Mr Patterson has over 25 years experience in the oil and gas industry. He wasManaging Partner of Calypso Energy LLC, an independent exploration anddevelopment company and part of the Calypso Energy group of companies heco-founded in 2000. He has occupied various positions of responsibility withoil and gas companies including Offshore Exploration Manager, Exploration &Development Manager for North America, General Country Manager , OffshoreExploration Geophysicist and Engineering Geophysicist. Mr. Patterson and hisexploration teams are credited with the discovery of more than 85 millionbarrels of oil and 300 billion cubic feet of natural gas.
Gregory Smith - Executive Consultant
Mr Gregory Smith has been involved in the resources business for in excess of20 years. He has a wide breadth of senior management and executive experience,having been associated with natural resource companies across the globe - coalbed methane in Wyoming; onshore oil and gas in Guatemala and Colombia;underground and open pit zinc mines in Canada; and corporate finance andadvisory services throughout much of the world.
Mr Pawan Sharma - Executive Consultant
Mr Pawan Sharma has considerable legal and corporate finance experience, havingbeen a lawyer at US law firm Debevoise & Plimpton and, most recently, a partnerin the corporate department of London law firm, Stephenson Harwood. Mr Sharmahas structured, led and advised on numerous debt and equity transactions,mergers and acquisitions and other corporate transactions for both start-up andFTSE 100 companies.
Mr Fawaz Mourad - New Board Appointment
Mr Mourad has over 25 years of expertise in the oil and gas industry in Africaand the Middle East and has assisted with major seismic acquisition exercisesin the Eastern Mediterranean. In recent years, Fawaz has been heavily involvedin business development in North Africa and the Middle East. Mr Mourad is adirector of Lake Energy Services and AFIL (Al Fardouss International) which isa representative for Norway based PGS-Marine, Petroleum Geoservices, out of
Norway.Political SituationPuntland and greater Somalia have featured prominently in world news over thequarter with a significant increase in piracy and kidnapping incidents. It isdifficult to assess the ultimate impact on Range's activities in Puntland but afew general observations can be made:
* Clearly the current security situation is inadequate to protect the number
of ships travelling through the Gulf of Aden. A number of security
initiatives are being proposed by various governments, world organisations,
ship owners and insurers. The Puntland government and his excellency
President Hersi are heavily involved in discussing proposed security
options which adds, in Range's opinion, significant diplomatic credibility
and recognition to Puntland.
* A focussed effort (as proposed by the European Economic Community) on
combating piracy will hopefully provide further assistance and benefits to
Puntland through joint security initiatives which may ultimately provide
greater stability to the region in the medium term.
* There has been an increased risk of terrorist activity with the al shebab
movement being identified as having a greater operating presence in both
Puntland and Somaliland. The situation is being monitored with the Puntland
Government looking at a number of efforts to address the problem with the
main issue being lack of resources and funding to implement the strategies
that the Government has developed.
Government Release - 20 August 2008
In response to reports that the Transitional Federal Government ("TFG") of Somalia had, during the quarter, signed an agreement with two foreign firms said to be paving the way for a joint venture company that would explore Somalia's natural resources, the Puntland Government stated:
"The Puntland Government remains fully committed to its existing agreement withAfrica Oil Company and Range Resources, covering concessions in the Dharoor andNogal Valley of Puntland, the concessions agreements covering those areasremain in effect and are supported by the full force of the laws of Puntland.Although the legality of the reported agreement is far from certain, thisprompt statement by the Puntland Government is intended to dispeluncertainty-surrounding control of natural resources in Puntland. The PuntlandGovernment will fiercely protect its rights in order to preserve ownership ofits natural resources for the people of Puntland" 20 August 2008.As clearly defined in a Puntland Government Policy Statement (puntlandgovt.com)of 19 March, 2008, "Until such time an all inclusive federal constitution iseffected and state governments, convinced with the sharing power and resources,are instituted, Puntland's support of the TFG should not be interpreted in anymanner that Puntland is part of the TFG - Puntland shall remain independent forits laws, policies and interests."
Rights Issue
Summary details of the Company's proposed rights issue were announced on 29 October 2008. Full details will be provided shortly.
Contacts:Australia UK Range Resources Ltd. Range Resources Ltd. Robert Hyndes Peter Landau +61 8 6389 5700 +44 207 389 8191 admin@rangeresources.com.au p.landau@rangeresources.com.au RFC Corporate Finance Fox-Davies Capital (Nominated Advisor) (Broker)Stuart Laing Daniel Fox-Davies +61 8 9 480 2500 +44 207 936 5200 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 quarter") 88 002 522 009 30 SEPTEMBER 2008
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to dateactivities $A'000 (3 months) $A'000 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (536) (536) (b) development - (c) production - (d) administration (786) (786) 1.3 Dividends received - 1.4 Interest and other items of a 39 39 similar nature received 1.5 Interest and other costs of - - finance paid 1.6 Income taxes paid - - 1.7 Other (provide details if - - material) Net Operating Cash Flows (1,283) (1,283) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets (149) (149) 1.9 Proceeds from sale of: (a) prospects - - (b) equity investments - - (c) other fixed assets - - 1.10 Loans to other entities - -
1.11 Loans repaid by other entities -
-
1.12 Other (provide details if -
- material) Net investing cash flows (149)
(149)
1.13 Total operating and investing cash (1,432)
(1,432)
flows (carried forward) 1.13 Total operating and investing cash (1,432) (1,432) flows (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, 1 1 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 - - shares Net financing cash flows 1 1 Net increase (decrease) in cash (1,431)
(1,431) held 1.20 Cash at beginning of quarter/year 4,138 4,138 to date
1.21 Exchange rate adjustments to item 3
3 1.20 1.22 Cash at end of quarter 2,710 2,710
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.23 Aggregate amount of payments to the parties 243 included in item 1.2 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 $141k
Reimbursement of Directors Travel and business related expenses $102k
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 available
Add 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 500 4.2 Development Total 500Reconciliation of cash
Reconciliation of cash at the end of the Current quarter Previous quarter quarter (as shown in the consolidated
statement of cash flows) to the related $A'000
$A'000
items in the accounts is as follows. 5.1 Cash on hand and at bank 2,710 4,138 5.2 Deposits at call - - 5.3 Bank overdraft - - 5.4 Other (provide details) - - Total: cash at end of quarter 2,710
4,138 (item 1.22)
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest reference at at end of beginning quarter of quarter 6.1 Interests in mining M77/748* 100%, (held through 100% Nil tenements Clara Resources Pty relinquished, Ltd) reduced or lapsed P77/276* 100% (held through 100% Nil Clara Resources Pty Ltd) 6.2 Interests in mining P77/3598* 100% (held through Nil 100% tenements acquired Clara Resources Pty or increased Ltd)
* Note M77/748 and P77/2766 lapsed on 12/8/2008 but revision application P77/ 3598 was granted on 13/8/08.
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 Issue price Amount paid number quoted per security up per security ( 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 194,304,944 194,304,944 securities 7.4 Changes during quarter (a) Increases 920 920 $1.00 $1.00 through issues (b) Decreases Nil Nil through returns of capital, buy-backs 7.5 +Convertible debt Nil securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options Exercise price Expiry date (description and conversion factor) 63,723,901 - $1.00 1 October 2008 60,401,186 60,401,186 $1.00 1 October 2010 2,952,029 - $0.50 30 June 2012 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) Partly Paid 4,925,000* Nil 60 cents 30 cents
* The Board will shortly convene a meeting of shareholders to obtain the
necessary resolutions for a selective reduction and cancellation of these
Partly Paid shares. 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.
Sign here: Date: 31 October 2008
([DEL:Director:DEL]/Company secretary)
Print name: Susan HunterNotes
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 ofinterests in mining tenements acquired, exercised or lapsed during thereporting period. If the entity is involved in a joint venture agreement andthere are conditions precedent which will change its percentage interest in amining tenement, it should disclose the change of percentage interest andconditions 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 InternationalAccounting Standards for foreign entities. If the standards used do not addressa topic, the Australian standard on that topic (if any) must be complied with
vendor