STA.L Regulatory News (STA)

4 July 2013 The ManagerCompany AnnouncementsAustralian Securities Exchange LimitedLevel 6, 20 Bridge StreetSydney NSW 2000 Range increases its FOOTPRINT in Trinidad by over 280,000 acres Highlights: - Range increases its Trinidad gross acreage footprint by circa 17x (grossincrease by +280,000 acres) through a proposed farm-in with Niko ResourcesLtd. on the Guayaguayare block in Trinidad; - Farm-in will provide Range with vast exposure to both onshore and offshorepotential and creates excellent synergy between Range's three existing blocksand the Guayaguayare block; - Range to gain exposure to both shallow and deep horizons within theGuayaguayare block, including the highly prospective Upper Cretaceousformation - believed to be the source formation for Trinidad's current andhistorical hydrocarbon discoveries; - There are four prospective onshore fields within the Guayaguayare block,each considered to have significant potential for oil, whilst the offshorestructural complex is believed to have significant potential for large gasdiscoveries with several large structures mapped; - Range to utilise its own drilling rigs and personnel for the farm-in, and inadvanced discussions with a leading International Drilling and Oil-fieldServices Provider to complement existing infrastructure and acceleratedevelopment; and - Range is in the final stages of completing and drawing down on its reservebased debt financing of staged amounts of up to US$100m (increased frompreviously announced US$35m) - having drawn down on initial £3m as aconvertible financing arrangement in the interim. Farm-in with Niko Resources Range Resources Limited ("Range" or "the Company") is pleased toannounce that it has reached an agreement in principle with a leading Canadianexploration and development company, Niko Resources Ltd. ("Niko") (TSX:NKO)regarding the Guayaguayare Block in Trinidad. As a result of the agreement,Range increases its gross acreage exposure in Trinidad by over 280,000 acres,across both the shallow and deep horizons with proven oil producing trends. 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). 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. Drilling rigs and personnel from Range's operating group inTrinidad will be used to drill the initial three wells as mentioned above. 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 agreement is subject to completion of final transactiondocuments and government and regulatory approval, as well as approval by theRange and Niko boards. As shown in the map above, the Guayaguayare Block is comprised ofover 280,000 contiguous acres covering both onshore and offshore portions ofknown, productive trends along the southern coast of Trinidad. TheGuayaguayare block is situated along trend with the most prolific oil and gasfields in Trinidad and lies in the transition area between the transpressionalSouthern basin and the extensional Columbus basin. A regional wrench fault,and extension of the Los Bajos fault, cuts through the onshore to offshoretransition zone. Traps associated with this fault produce oil in SouthwestTrinidad and off the East Coast from Upper Miocene / Pliocene Sands. 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. To date, the following work has been completed by Niko and previousoperators on the block: Onshore: - Acquired and processed 217km2 3D land survey Offshore: - Acquired and processed 277km2 3D marine survey (2011) - Two 3D marine surveys were reprocessed (ELF 1997 and Mobil 1990) - All 3 offshore 3D surveys have been merged prestack (total 836 km2) Strategic Partnership with a leading International Drilling and Oil-fieldServices Provider Range is also pleased to announce that in anticipation of theincreased activity in Trinidad, the Company is in advanced discussions with aleading International 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. Funding Facility With the intention of Range utilising its reserve based lendingfacility for its expanded activities in Trinidad and potentially in Russia(with the proposed International Petroleum merger), the Company is pleased toannounce that the previously announced US$35m reserve based debt financingthrough Meridian SEZC has been increased to staged amounts of up to US$100m.The Company is now in the final stages of completing and drawing down on itsfacility. As an interim measure, an initial £3m has been drawn down as aconvertible financing arrangement on the following key terms: - 18 month term, effective 10% interest rate; - 90% VWAP conversion on or after 30 days from drawdown; - 50% face value can be converted if repayment election by the Company ismade; and - 1 for 2 attaching option, with 3 year expiry at £0.038, upon conversion. The company will be releasing a comprehensive presentation on its progress anddevelopments in Trinidad, as well as further updates from across its projectsin the due course. Peter Landau, Executive Director, commented: "We are very enthusiastic about the opportunity to work with theNiko team on this venture. The new block gives Range vast exposure to bothonshore and offshore potential and creates excellent synergy between our threeexisting blocks and Guayaguayare. The Guayaguayare Block represents a perfectopportunity for Range to add highly prospective acreage on trend with itsexisting exploration, development and secondary recovery projects, whileleveraging its fleet of drilling and production rigs and operating experiencewithin the region. Given our ongoing production operations in South Quarry,Morne Diablo, and Beach Marcelle, Range is uniquely positioned to operatefuture discoveries, whether on or offshore, which in turn should result inappreciable synergy and lower operating costs. We are also extremely excitedabout our potential partnership with a leading International Drilling andOil-Field Services contractor, which fits well with our increased operationsin Trinidad, and complements our existing infrastructure, by providingadditional rigs, infrastructure and personnel. With the increased reservebased lending facility almost complete along with the Texas sale, we are fullyset for expansive growth in operations and expertise in a Country with immensehydrocarbon potential." Issue of Shares / Options Range Resources Limited is pleased to announce the issue of the following securities: - 20,107,629 Ordinary Fully Paid Shares issued in lieu of debtrepayments and financing costs - 146,533,850 Unlisted Options issued with respect to £0.04pplacement and approved at 19 June 2013 EGM - (£0.04, 30 April 2016) - 5,000,000 Unlisted Options issued in conjunction to £3mconvertible note (£0.038, 30 June 2016) Application will be made for the 20,107,629 new shares to be admitted to trading onthe ASX and AIM. Trading in the new shares is expected to commence on or around 9 July 2013. Following the issue of these securities the total number of securities on issue are as follows: 2,873,944,243 Ordinary Fully Paid Shares (RRS) 40,000,000 Listed Options ($A0.05, 31 January 2016) 855,166 Unlisted Options (£0.04, 30 June 2015) 7,058,824 Unlisted Options (£0.17p, 30 April 2016) 5,180,000 Unlisted Options (£0.075p, 31 January 2017) 9,000,000 Unlisted Options (£0.125p, 31 March 2015) 15,708,801 Unlisted Options (£0.0615p, 19 October 2015) 32,275,862 Unlisted Options (A$0.05075p, 30 November 2015) 5,000,000 Unlisted Options (A$0.10, 31 January 2016) 5,000,000 Unlisted Options (A$0.06, 10 February 2016) 146,533,850 Unlisted Options (£0.04p, 30 April 2016) 5,000,000 Unlisted Options (£0.038, 30 June 2016) 17,921,146 Class B Performance Shares Yours faithfully Peter LandauExecutive Director ContactsRange Resources Limited PPR (Australia)Peter Landau David TaskerT: +61 (8) 9488 5220 T: +61 (8) 9388 0944 E: plandau@rangeresources.com.au E: david.tasker@ppr.com.auGMP Securities Europe LLP RFC Ambrian Limited (Nominated Advisor)(Joint Broker) Stuart LaingRichard Greenfield / Rob Collins / T: +61 (8) 9480 2500Alexandra CarseT: +44 (0) 207 647 2800 Fox-Davies Capital Limited (Joint Old Park Lane Capital (Joint Broker)Broker) Michael ParnesDaniel Fox-Davies / Richard Hail T: +44 (0) 207 493 8188T: +44 (0) 203 463 5000 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 & gasexploration 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 with threeonshore 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 in onshoreblocks VIa and VIb, covering approx. 7,000sq.km. Range completed a 410km 2Dseismic program with independent consultants RPS Energy identifying 68potential structures containing an estimated 2 billion barrels of undiscoveredoil-in-place (on a mean 100% basis) with the first (Mukhiani-1) explorationwell having spudded in July in 2011. The Company is focussing on a reviseddevelopment strategy that will focus on low-cost, shallow appraisal drillingof the contingent resources around the Tkibuli-Shaori ("Tkibuli") coaldeposit, which straddles the central sections of the Company's two blocks. - In Puntland, Range holds a 20% working interest in two licenses encompassingthe highly prospective Dharoor and Nugaal valleys. The operator and 60%interest holder, Horn Petroleum Corp. (TSXV:HRN) has completed two explorationwells and will continue with a further seismic and well program over the next12-18 months. - Range holds a 25% interest in the initial Smith #1 well and a 20% interestin further wells on the North Chapman Ranch project, Texas. The project areaencompasses approximately 1,680 acres in one of the most prolific oil and gasproducing trends in the State of Texas. Independently assessed 3P reserves inplace (on a 100% basis) of 228 Bcf of natural gas, 18 MMbbl of oil and 17MMbbl of natural gas liquids. - Range holds a 21.75% interest in the East Texas Cotton Valley Prospect inRed River County, Texas, USA, where the prospect's project area encompassesapproximately 1,570 acres encompassing a recent oil discovery. The prospecthas independently assessed 3P reserves in place (on a 100% basis) of 3.3mmbblsof 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 Resources Limited(ASX: CTR) which holds a 70% interest in Latin American Resources (LAR). LARholds an 80-100% interest in two oil and gas development and explorationblocks in Guatemala with Canadian NI 51-101 certified proved plus probable(2P) reserves of 2.3 MMBBL (100% basis). Range also holds a 10% interest inLAR. Table of Reserves and Resources Detailed below are the estimated reserves for the Range project portfolio. 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** ** 21-24% ** 0.48-0.55** ** 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 Chapman Ranch asset,which are net of government and overriding royalties as described in theForrest Garb report. ** The reserves estimate for the Guatemalan Blocks in which LAR (and CTR) havean 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. Detailed below are the estimated resources and oil-in-place delineated acrossRange'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 relation toreserves 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 (and CTR) have aninterest in is as reported by CTR. CTR has not reported 1P and 3P estimates,but Range is seeking such information from CTR for future reporting purposes. All of the technical information, including information in relation toreserves 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 update reserves estimatesfor the North Chapman Ranch Project and East Texas Cotton Valley referredabove have been formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA isan international petroleum engineering and geologic consulting firm staffed byexperienced engineers and geologists. Collectively FGA staff has more than acentury of world‐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 S‐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. RPS Group is an International Petroleum Consulting Firm with officesworldwide, who specialise in the evaluation of resources, and have consentedto the information with regards to the Company's Georgian interests in theform 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 Valley prospects areinternal estimates reported by Africa Oil Corp, the operator of the jointventure, which are based on volumetric and related assessments by Gaffney,Cline & Associates. The TSX certified 51-101 certified reserves with respect to the Guatemalanproject are as reported by ASX listed Company Citation Resources (ASX: CTR). In granting its consent to the public disclosure of this press release withrespect 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 project is sourcedfrom the publically available references to a report by Advanced ResourcesInternational's ("ARI") report in 2009: CMM and CBM development in theTkibuli-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 Ecopetrol 1987. SPE Definitions for Proved, Probable, Possible Reserves and ProspectiveResources Proved Reserves are those quantities of petroleum, which by analysis ofgeoscience and engineering data, can be estimated with reasonable certainty tobe commercially recoverable, from a given date forward, from known reservoirsand under defined economic conditions, operating methods, and governmentregulations. Probable Reserves are those additional Reserves which analysis of geoscienceand engineering data indicate are less likely to be recovered than ProvedReserves but more certain to be recovered than Possible Reserves. Possible Reserves are those additional reserves which analysis of geoscienceand engineering data indicate are less likely to be recoverable than ProbableReserves. 1P refers to Proved Reserves, 2P refers to Proved plus Probable Reserves and3P refers to Proved plus Probable plus Possible Reserves. Prospective Resources are those quantities of petroleum estimated, as of agiven date, to be potentially recoverable from undiscovered accumulations byapplication of future development projects. Prospective Resources have both anassociated chance of discovery and a chance of development. ProspectiveResources are further subdivided in accordance with the level of certaintyassociated with recoverable estimates assuming their discovery and developmentand may be sub-classified based on project maturity. Contingent Resources are those quantities of hydrocarbons which are estimated,on a given date, to be potentially recoverable from known accumulations, butwhich are not currently considered to be commercially recoverable. Undiscovered Oil-In-Place is that quantity of oil which is estimated, on agiven date, to be contained in accumulations yet to be discovered. Theestimated potentially recoverable portion of such accumulations is classifiedas Prospective Resources, as defined above.