STA.L Regulatory News (STA)

RANGE RESOURCES LTD - Strategic Stake in Citation Resources

PR Newswire

London, January 25

STRATEGIC STAKE IN CITATION RESOURCES

Highlights

- Range increases its Latin American footprint by acquiring a strategic

stake of 19.9% in Citation Resources Limited (ASX:CTR), with

interest in two highly prospective oil and gas blocks in Guatemala;

- The strategic stake allows Range to obtain non-operating exposure to

known reserves with significant upside potential with a similar owner /

operator project to Range's Trinidad operations;

- The Guatemalan Blocks have proved plus probable reserve estimates (2P) of

2.3 MMBBL (on a gross 100% basis), with significant exploration upside

potential;

- The blocks have had significant previous exploration with the two well

appraisal drilling program currently underway with one well already

successfully completed and flow testing currently ongoing; and

- The second well will spud in February upon completion of current

flow testing program on the first well.

Range Resources Limited ("Range" or "the Company") is pleased toannounce that as part of the Board's on-going review of opportunities andstrategic options, Range has secured a strategic stake (19.9%) in CitationResources Limited ("Citation") (ASX:CTR). Citation holds a farm in right toacquire a 70% interest in Latin American Resources Ltd ("LAR"), which holds an80-100% interest in two oil and gas development and exploration blocks inGuatemala ("Projects"). LAR is the operator of the blocks. Additionally, Rangehas acquired a direct 10% equity stake in LAR.

The Projects consist of Block 1-2005 and Block 6-93 in the SouthPeten Basin in Guatemala ("Guatemalan Blocks"). The Guatemalan Blocks haveCanadian NI 51-101 certified proved plus probable (2P) reserves of 2.3 MMBBL(with approximately 0.45 - 0.6 MMBBls attributable to Range's combined equityinterest in Citation and 10% direct interest in LAR), with significantexploration upside potential. In addition, the blocks have had significantprevious exploration with the two well appraisal drilling program currentlyunderway with the Atzam #4 well having already been successfully completed andflow testing currently underway. The Projects and drilling/operationalinfrastructure are owned by LAR together with its minority joint venturepartners in a similar set up to Range's Trinidad operations.

The strategic stake in Citation and LAR provides Range withnon-operating exposure to a project with known reserves and significant shortterm upside potential, as well as creating the potential spin off vehicle forthe company's Puntland assets.

Given the current share price and the development potential ofTrinidad, the Company's operational and financial focus remains on Trinidad.With that view, Range believes the stake in Citation to be a cost effectivegrowth opportunity with minimal further funding required in the near term.

Transaction Details

Range will acquire its 19.9% strategic interest in Citation, byconversion of existing debt funding provided by Range to Citation intoordinary Citation shares (subject to any necessary Citation shareholderapprovals) at $0.02 with a 1 for 2 free attaching listed Citation option($0.04, June 2015), which is approximately $2m for the 19.9% interest. Inaddition, Range will pay $2m for the 10% interest in LAR, which is financecarried through the first US$25m spent on the Project.

Concurrently, Range has completed a placement of 40m new shares toCitation nominees at A$0.05 per share (being a premium to the current shareprice) to raise gross proceeds of $2m, along with the issue of 40,000,000unlisted options ($0.05, 31 January 2016) in facilitation, introduction andcorporate advisory fees.

Executive Director Peter Landau commented:

"The acquisition of the interest in Guatemala through the strategicstake in Citation Resources and at project level further strengthens ourportfolio of assets in the region that has yielded significant discoveries,yet remains relatively underexplored. This acquisition is consistent withRange's strategy of acquiring low cost barrels in areas of strategicadvantage. It provides Range with a unique opportunity to participate in nearterm appraisal and development along with potential high impact explorationopportunities at minimal costs. We now look forward to the flow test resultsfrom the first well, and subsequent spudding of the second well."

Guatemala Projects Summary - Atzam and Tortugas Formations

The Projects consist of Block 1-2005 and Block 6-93 in the SouthPeten Basin in Guatemala ("Guatemalan Blocks"). As reported by Citation, theGuatemalan Blocks have Canadian NI 51-101 certified proved plus probable (2P)reserves of 2.3 MMBBL, with significant exploration upside potential. Inaddition the blocks have had significant previous exploration with the twowell appraisal drilling program currently underway with the Atzam #4 wellhaving already been successfully completed and flow testing currentlyunderway. The projects and drilling / operational infrastructure are owned byLAR together with its minority joint venture partners in a similar set up toRange's Trinidad operations.

The first appraisal well Atzam #4, which successfully drilled toits target depth of 4,500 ft., is currently undergoing flow testingoperations. The intention is for the second well, Atzam #5, to spud followingcompletion of the flow testing program on the Atzam #4 well. The Atzam #4 wellis being drilled on the same structure that the Atzam #2 well tested at aninitial flow rate of up to 1,200 BOPD of 34°API oil at a depth of 3,850 ft.

Recent mapping of the Atzam structure using existing data fromprevious operators (Basic, Hispanoil) and MEM, and incorporating reservoirdata acquired since production initiated in December 2007, indicate thepossibility of a structure of comparable size and orientation to that of theexisting Rubelsanto field in Guatemala. To date, the Rubelsanto field hasproduced more than 30 MMBBL of oil since its discovery in 1976. The fieldcurrently continues to produce more than 1,000 BOPD, 36 years after itsdiscovery.

In addition to the Atzam structures on Block 1-2005, the Tortugasstructure is a suspended oil field. Originally 17 wells on Tortugas salt domewere drilled by Monsanto looking for sulphur. One well (T9B) had an oilblowout at approx 2,200 ft and most others had oil shows in multiples zones.

The Atzam and Tortugas Fields have had significant previousexploration and development with 2D seismic and previous production wells. In2012/13 the planned exit production is approximately 1,000 bbl/d based onsuccessful production from the two new appraisal wells based on the previousflow rates of wells drilled on the same structure.

For more information, please refer to citation.net.au

Guatemala Overview

Guatemala is a politically stable country with a developingeconomy. Guatemala has enjoyed political stability since 1983 when the firstfree election for National Assembly (Congress) took place and a newconstitution, currently in force was approved. In 1985 the first civilpresident was elected. Since that date, there have been six civilianpresidents elected in free and democratic elections. Guatemala has enjoyedmore than 30 years of stability, in the social, economic, and politicalsectors

Underpinning development in Guatemala are excellent fiscal termswith net backs per barrel of approximately US$45 (assuming US$80 oil price)after all costs (including taxes and royalties).

Current production in Guatemala is approximately 14,000 bopd withsimilar hydrocarbon geology to Mexico. The trends of major Mexican discoveries(such as the Nazareth Field) have been found to extend into Guatemala. Themajor producing basins, North Peten and South Peten, account for 90% ofdomestic production.

Further Information

Range Resources Limited is pleased to announce the issue of thefollowing securities:

- 40,000,000 Ordinary Fully Paid Shares issued at A$0.05

- 8,613,780 Ordinary Fully Paid Shares issued in lieu of cash loan

repayments at £0.0313 (YA Global)

- 10,000,000 Ordinary Fully Paid Shares issued in lieu of cash for

consultancy and corporate advisory fees

- 40,000,000 unlisted options ($0.05, 31 January 2016) in

facilitation, introduction and corporate advisory fees.

Application will be made for the 58,613,780 new shares to beadmitted to trading on the ASX and AIM. Trading in the new shares is expectedto commence on or around 31 January 2013.

Following the issue of these securities, the total number ofsecurities on issue are as follows:

RFC Ambrian Limited (Nominated Advisor) Old Park Lane Capital (Joint Broker)Stuart Laing

Range Resources Limited is a dual listed (ASX:RRS; AIM:RRL) oil &gas exploration 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 three

onshore production licenses and fully operational drilling subsidiary.

Independently assessed Proved (P1) reserves in place of 17.5 MMbls with 25.2

MMbls of proved, probable and possible (3P) reserves and an additional 81

MMbls of unrisked best estimate prospective resources.

- In the Republic of Georgia, Range holds a 40% farm-in interest in onshore

blocks VIa and VIb, covering approx. 7,000sq.km. Range completed a

410km 2D seismic program with independent consultants RPS Energy identifying

68 potential structures containing an estimated 2 billion barrels of

undiscovered oil-in-place (on a mean 100% basis) with the first (Mukhiani-1)

exploration well having spudded in July in 2011. The Company is focussing on a

revised development strategy that will focus on low-cost, shallow appraisal

drilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli")

coal deposit, which straddles the central sections of the Company's two blocks.

- In Puntland, Range holds a 20% working interest in two licenses encompassing

the highly prospective Dharoor and Nugaal valleys. The operator and 60%

interest holder, Horn Petroleum Corp. (TSXV:HRN) has completed two

exploration wells and will continue with a further seismic and well program

over the next 12-18 months.

- Range holds a 25% interest in the initial Smith #1 well and a 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. Independently assessed 3P reserves

in place (on a 100% basis) of 228 Bcf of natural gas, 18 mmbbls of oil and

17 mmbbls of natural gas liquids.

- Range holds a 21.75% interest in the East Texas Cotton Valley Prospect in

Red River County, Texas, USA, where the prospect's project area encompasses

approximately 1,570 acres encompassing a recent oil discovery. The prospect

has independently assessed 3P reserves in place (on a 100% basis) of 3.3mmbbls

of oil.

- Range is earning a 65% (option to move to 75%) interest in the highly

prospective PUT 6 and PUT 7 licences in Putumayo Basin in Southern

Colombia. The Company will undertake a 350km2 3D seismic program across the

two licences and drill one well per licence, as well as looking to re-enter a

previously suspended well that had a significant historical reserve estimate.

Table of Reserves and Resources

* Reserves attributable to Range's interest in the North ChapmanRanch asset, which are net of government and overriding royalties as describedin the Forrest Garb report.

Detailed below are the estimated resources and oil-in-placedelineated across Range's portfolio of project interests.

All of the technical information, including information in relationto reserves 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 updatereserves estimates for the North Chapman Ranch Project and East Texas CottonValley referred above have been formulated by Forrest A. Garb & Associates,Inc. (FGA). FGA is an international petroleum engineering and geologicconsulting firm staffed by experienced engineers and geologists. CollectivelyFGA staff has more than a century of worldâ€wide experience. FGA haveconsented in writing to the reference to them in this announcement and to theestimates of oil and natural gas liquids provided. The definitions for oil andgas reserves are in accordance with SEC Regulation Sâ€X an in accordance withthe guidelines of the Society of Petroleum Engineers ("SPE"). The SPE Reservedefinitions can be found on the SPE website at spe.org.

RPS Group is an International Petroleum Consulting Firm withoffices worldwide, who specialise in the evaluation of resources, and haveconsented to the information with regards to the Company's Georgian interestsin the form 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 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.

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 Contingent Resource estimate for CBM gas at the Tkibuli projectis sourced from the publically available references to a report by AdvancedResources International's ("ARI") report in 2009: CMM and CBM development inthe Tkibuli-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 Ecopetrol1987.

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.