17 Jun 2010 07:53
ABN 88 002 522 009Level 3, 1 Havelock StreetWest Perth, WA 6005P +61 8 9488 5220F +61 8 9324 240017 June 2010Company AnnouncementsAustralian Securities ExchangeExchange Plaza2 The EsplanadePERTH WA 6000By E-lodgment
RANGE ACQUIRES INTEREST IN SECOND TEXAS OIL FIELD
Building on its success at North Chapman Ranch, Range Resources Limited ("Range " or "the Company") is pleased to announce that it has acquired a 13.56% interest in approximately 1,570 gross acres encompassing a recent oil discovery located in Red River County, Texas, for total leasehold acquisition costs of $US254,000.
Development of the shallow oil reservoir in the Cotton Valley formation is expected to begin in July with the drilling of a horizontal appraisal well in the field, where gross recoverable reserves are estimated to be between 4 and 6 million barrels of oil.
Background
The East Texas Cotton Valley oil accumulation was discovered in March of 2008 with the drilling of a vertical well to approximately 5,500 ft. The initial well encountered more than 100 ft. of gross oil pay at approximately 5,300 ft and was immediately placed into production. A horizontal appraisal well spudded in December of 2008 encountered good quality reservoir in a lateral section approximately 1,500 ft. long, but was badly damaged during completion. A second horizontal well is expected to spud in the third quarter of this year. If successful, the upcoming well will trigger further development of the Cotton Valley field that could ultimately require more than 20 additional wells, with a targeted average recovery per well of over 220,000 barrels of oil. With horizontal well costs estimated at $1.57MM, gross finding & development costs are expected to be less than $7. 15/bbl.
Reserves
The recoverable reserves estimates represents the low to high range of the volume of oil that is considered will be economically recoverable form the reservoir. Whilst this estimate has been reviewed by the Company's technical consultant and advisors, Texas Energy Advisors LLC, who have over 30 years of relevant experience in the oil and gas sector, it has not yet been signed off as being consistent with the SPE reserve and resources reporting guidelines.
In this respect, the Company has commissioned independent petroleum consultants Lonquist & Co. LLC to certify the recoverable reserves of the Cotton Valley formation located on the Range acreage. Results of the reserve report are expected shortly and will be released as soon as they are available.
Russell Bevly #1 Appraisal Well UPDATE
Range would also like to announce an update on the Russell Bevly #1 appraisal well as part of the North Chapman Ranch Joint Venture's multi-well program in Texas.
As previously announced, the well has been drilled to the intermediate casing depth of 11,400 ft. Following this, open hole logs were acquired and 9 5/8" casing set and cemented. Drilling has recommenced towards the proposed target depth of ~14,000 ft (4,268m).
Well DetailsName of well Russell Bevly #1 Spud date 9 May 2010 Current depth ~12,671 ft (3,863m) Proposed total depth ~14,000 ft (4,268m) RRS working interest 20%
Range will provide regular updates on the progress on the drilling of the Russell-Bevly well.
Placement
The Company would also like to announce that it has received commitments for a placing of A$8m from UK and Australia sophisticated and institutional investors at $0.07 and £0.04 equivalent through the Company's AIM broker Old Park Lane Capital Plc and Australian brokers and will potential accept up to A$10m (up to 143m shares).
Funds raised will be used to fund the Company's Puntland, Texan and Georgian interests and to investigate further acquisitions opportunities of which Range is in the final stages of securing an option over another oil production play with significant exploration upside in the Americas and should be in a position to announce shortly.
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. * 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.
The reserves estimate for the North Chapman Ranch Project has been formulated by Lonquist & Co LLC who 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 in writing to the reference to them in this announcement and to the estimates of oil, natural gas and natural gas liquids provided. 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 www.spe.org as well as in the full Lonquist report on the Range website.
vendor