29 Jun 2010 07:00
ABN 88 002 522 009Level 3, 1 Havelock StreetWest Perth, WA 6005P +61 8 9488 5220F +61 8 9324 240029 June 2010Company AnnouncementsAustralian Securities ExchangeExchange Plaza2 The EsplanadePERTH WA 6000By E-lodgement
Independent valuation of Range's Interest in East Texas Cotton Valley Prospect,
Texas, USA, at US$18M
Highlights:
Independent Petroleum Engineers, Lonquist & Co LLC, have completed an independent reserves and valuation report on East Texas Cotton Valley Prospect in Red River County, Texas, USA
* Reserves report estimates total gross commercially recoverable Reserves ( 1P, 2P and 3P) of the East Texas Cotton Valley Prospect as 5.4 mmbbl of oil (attributable to Range - 0.7 mmbbls) * The planned multi-well program is anticipated to move Possible (P3) R eserves into the Probable (P2) and Proved (P1) Reserve categories * Independent PW10 DCF valuation of Range's net interest of US$18m
International oil and gas company Range Resources Limited ("Range" or "the Company") is pleased to announce the results of independent certification by Independent Petroleum Engineers, Lonquist & Co LLC ("Lonquist ") of the Company's interest in the East Texas Cotton Valley Prospect in Red River County, Texas, USA.
Range holds a 13.56% interest in East Texas Cotton Valley Prospect, with Crest Resources Inc. as operator (refer ASX Announcement dated 17 June 2010), with the prospect's project area covering approximately 1,570 acres, encompassing a recent oil discovery.
Development of the shallow oil reservoir (which is a combination trap type) in the Cotton Valley formation is expected to begin in 3Q 2010, with the drilling of a horizontal appraisal well in the field.
Range, through its technical consultants Texas Energy Advisors LLC, engaged Lonquist to compile geological, geophysical and engineering data and provide an Independent Reserves Report and Valuation for the prospect.
Lonquist's independent reserves report has estimated the following gross commercially recoverable reserves from the East Texas Cotton Valley Prospect:
Category Oil (mmbbls) Proved (P1) 1.5 Probable (P2) 1.2 Possible (P3) 2.7 Total Reserves 5.4
Set out below is Range's attributable interest in the gross recoverable reserves on 13.56% of the East Texas Cotton Valley Prospect:
Category Oil (mmbbls) Proved (P1) 0.20 Probable (P2) 0.16 Possible (P3) 0.36 Total Reserves 0.72
The planned multi-well program is anticipated to move Possible (P3) Reserves into the Probable (P2) and Proved (P1) Reserve categories, with the drilling of a horizontal appraisal well in the field scheduled for Q3 2010.
Based on the reserve numbers cited above, Lonquist's estimated net undiscountedcash flow value to Range, along with PW10 discounted cash flow (at a 10%discount rate) based on Nymex forward strip prices reported on 31 December2009, following reductions for royalties, opex, capex, production taxes etc areas follows:Reserve Undiscounted PW10 US$ US$ Category Proved (P1) 8.5m 5.4m Probable (P2) 7.0m 4.4m Possible (P3) 14.7m 8.1m
Estimated Future Cashflow (Range's net interest) 30.2m 17.9m
A copy of Lonquist's East Texas Cotton Valley Prospect - Estimated Future Reserves and Revenues for Range is on the company's website and contains further details on the assumptions on which these valuation estimates are based.
Range Executive Director, Mr Peter Landau, commented, "Range is pleased that from an initial investment of US$256k for leasehold acquisition costs, plus an estimated US$220k (Range's net share) to drill and develop the first well scheduled for 3Q 2010, we have been able to achieve a significant uplift in shareholder value, based on independently assessed reserves and valuations reported on the East Texas Cotton Valley Prospect."
"We feel that the upcoming appraisal activities will add additional value to Range and complement the Company's existing Texan interests, as we continue to add reserves, production and cash flow to create a balanced portfolio of lower-risk development and production projects in the US with high potential exploratory prospects in Puntland and Georgia," Mr Landau added.
The Company will continue to provide further updates on the progress of its portfolio of assets.
For and on behalf of the Board
RegardsPeter LandauExecutive DirectorContactsRange ResourcesPeter LandauTel : +61 (8) 8 9488 5220Em: plandau@rangeresources.com.auAustralia LondonPPR Conduit PRDavid Tasker Jonathan CharlesTel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7429 6611Em: david.tasker@ppr.com.au Em: jonathan@conduitpr.comRFC Corporate Finance (Nominated Advisor) Old Park Lane Capital (Broker)Stuart Laing Michael ParnesTel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188Range Background
Range Resources is a dual listed oil & gas exploration company with oil & gas interests in the frontier state of Puntland, Somalia, the Republic of Georgia and Texas, USA.
* Range holds a 25% interest in the initial Smith #1 well and 20% interest in further wells on the North Chapman Ranch project, Texas. The project area encompasses approximately 1,680 acres in one of the most prolific oil and gas producing trends in the State of Texas. Drilling of the first well has resulted in a commercial discovery with independently assessed gross recoverable reserves in place of 215 Bcf of natural gas, 16 mmbbls of oil and 15 mmbbls of natural gas liquids. * Range holds a 13.56% interest in the East Texas Cotton Valley Prospect in Red River County, Texas, USA, with the prospect's project area encompasses approximately 1,570 acres encompassing a recent oil discovery. Independently assessed gross recoverable reserves in place of 5.4 mmbbls of oil. * In Puntland, Range holds a 20% working interest in two licences encompassing the highly prospective Dharoor and Nugaal valleys with plans to drill two wells - 65% Operator, in 2010. * In the Republic of Georgia, Range holds a 50% farm-in interest in onshore blocks VIa and VIb, covering approx. 7,000sq.km. Currently, Range has recently completed a 410km 2D seismic program.
Lonquist & Co LLC are Petroleum Consultants based in the United States with offices in Houston and Austin. Lonquist provides specific engineering services to the oil and gas exploration and production industry, and consults on all aspects of petroleum geology and engineering for both domestic and international projects and companies. Lonquist & Co LLC have consented to the reference to them in this announcement and to the estimates of oil, natural gas and natural gas liquids and valuations provided herein. These estimates were formulated in accordance with the guidelines of the Society of Petroleum Engineers ("SPE"). The SPE Reserve definitions can be found on the SPE website at spe.org as well as in the Lonquist report as attached and on the Range website.
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