26 Jun 2012 08:12
26 June 2012The ManagerCompany AnnouncementsAustralian Securities Exchange LimitedLevel 6, 20 Bridge StreetSydney NSW 2000By e-lodgementTRINIDAD OPERATIONS UPDATE
Range Resources Limited ("Range" or "the Company") is pleased to announce an update with respect to its Trinidad operations.
The Company continues to enjoy drilling success along its rapidly expanding Lower Forest trend in the Morne Diablo Block. Encountered at a depth of roughly 1,000 ft. below the surface, Lower Forest wells are capable of adding 100-130 Bopd of initial production per well (average initial production to date circa 60 bopd noting that daily rates have increased per well with the step outs as per the diagram below). Since acquiring its Trinidad acreage, the Company has drilled 15 wells along the trend and successfully completed all 15 positioning Range to reach 1,000 bopd in the coming weeks as well tests and perforations are completed.
It should be noted that the Lower Forest wells drilled and tested to date are showing sands congruent with the sands encountered in the QUN16 well that was drilled and tested in 1942, which is located in the east of the Morne Diablo license some 3,500 ft from the QUN127 well highlighted below (on the edge of the red proposed drill locations per the diagram below). With the similarities to the QUN 16 well having been encountered in the recently drilled wells, the Company is looking at a 60+ well program for the Lower Forest horizon, utilising the Company's shallow capacity rigs, that will look to `bridge the gap' between the existing wells drilled to date and the QUN 16 well. QUN 129,130 and 131 are currently drilling the lower forest horizon.
Along with gains in production, the current drilling program will also add reserves to the rapidly-expanding Range portfolio in Trinidad. Significant upward revisions to the Company's Trinidad P1 and P2 reserves are expected to be certified later in Q3 this year.
In addition to ongoing success with the currently drilling rigs, Range will stage in additional equipment throughout the year as it continues to add rigs with greater operating depth capabilities. With three rigs already drilling, the Company recently commissioned its Rig #8, capable of reaching depths of 9,000 to 10,000 ft. The first 6,500 ft well to spud shortly followed by two Herrera wells.
Commissioning of Rig 8
With Rig #8 in service, the Company will extend producing trends within the Upper, Middle, and Lower Cruse sections, where production rates and recoveries per well are considerably higher than the shallower producing horizons. Range will shortly commence drilling of the first of its deeper locations on the Morne Diablo Block, where offset wells have produced at initial rates of 200-400 Bopd and recovered up to 400,000 bbls. With additional development in the more prolific deeper reservoirs, production growth from the Company's Trinidad holdings is expected to accelerate over the next 12 months to more than 4,000 Bopd not taking into account any secondary recovery projects.
Range is increasingly enthusiastic about the considerable exploratory potential on its Morne Diablo and South Quarry Blocks, where high impact exploratory prospects have been identified in the Herrera Formation alone. The first of these prospects is scheduled for drilling in Q3 this year.
Herrera Prospects
The Company has undertaken significant technical work to refine its portfolio of Herrera prospects over the past 12 months, incorporating 3D seismic data, all available subsurface control, and the known regional geology of the Herrera, which produced over 300 million barrels in the nearby Barrackpore/ Penal complex alone.
After identifying sizeable unrisked exploratory potential, Range has now added 40 MMbo (recoverable) in identified Herrera Prospective Resources to its prospect portfolio. Depending on the thickness and oil saturation of the Herrera where encountered, initial rates could potentially surpass 500 Bopd per well, making an immediate impact on Range's growing production base.
Following the initial 2 planned Herrera wells, the Company fully expects the Herrera program to grow in the number of identified prospects and additional reserve potential.
Secondary Recovery
As a compliment to the ongoing exploration and development of the Morne Diablo and South Quarry Blocks, Range will move rapidly ahead with its secondary recovery projects on Morne Diablo through the expansion of the existing pilot program, as well as on the Beach Marcelle Block. Applications for environmental approval, expansion of technical and visualization infrastructure in the new San Fernando office, and utilization of in-house reservoir modelling software are all underway in support of the enhanced oil recovery ("EOR") projects.
As previously announced, the Company has certified more than 12 MMbo of ProvedReserves that remain to be produced from the Beach Marcelle Field alone withfurther Proved Reserves anticipated on following the expansion of the existingMorne Diablo pilot EOR program. An aggressive work program is expected to beginin each area once reservoir simulation work is completed and all necessaryapprovals are in hand.TRINIDAD RESERVES & RESOURCES Oil (MMbbls) (RANGE 100%) Proved (P1) 15.4 Probable (P2) 2.2 Possible (P3) 2.0 Total Reserves 19.6
Prospective Resources - Additional 18.2MMbo of previously certified Prospective Resources plus 40MMbo of new Prospective Resources with respect to the Herrera Formations.
Issue of Shares
Range Resources Limited is pleased to announce the issue of the following securities:
* 45,000,000 Ordinary Fully Paid Shares to be issued upon completion of first hydrocarbon well drilled in Puntland as per original agreement
* 19,820,000 Ordinary Fully Paid Shares to be issued upon exercise of unlisted options (£0.075p, 31 January 2017)
Application will be made for the 64,820,000 new shares to be admitted to trading on the ASX and AIM. Trading in the new shares is expected to commence on or around 3 July 2012.
Following the issue of these securities the total number of securities on issue are as follows:
2,357,627,605 Ordinary Fully Paid Shares (RRS)
855,166 Unlisted Options (£0.04, 30 June 2015)
7,058,824 Unlisted Options (£0.17p, 30 April 2016)
3,177,029 Unlisted Options (A$0.50, 30 June 2012)
5,180,000 Unlisted Options (£0.075p, 31 January 2017)
9,000,000 Unlisted Options (A$0.125p, 31 March 2015)
17,921,146 Class A Performance Shares
17,921,146 Class B Performance Shares
Old Park Lane Capital Research Note
An updated research note from Old Park Lane Capital will be made available on the Company's website.
A fully formatted version of this announcement which contains relevant diagrams and photos can also be found on the Company's website.
Yours faithfullyPeter LandauExecutive DirectorContactsRange Resources LimitedPeter LandauTel : +61 (8) 8 9488 5220Em: plandau@rangeresources.com.auPPR (Australia) Tavistock Communications (London)David Tasker Ed Portman/Paul YouensTel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7920 3150Em: david.tasker@ppr.com.au Em: eportman@tavistock.co.uk
RFC Group Limited (Nominated Advisor) Old Park Lane Capital (Joint Broker) Stuart Laing
Michael ParnesTel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188Fox-Davies Capital Limited GMP Securities Europe LLP (Joint Broker)
Daniel Fox-Davies / Oliver Stansfield Nick Morgan / Chris Beltgens Tel: +44 (0)203 463 5000
Tel: +44 (0) 207 647 2800Range Background
Range Resources Limited is a dual listed oil & gas exploration company with oil & gas interests in the frontier state of Puntland, Somalia, the Republic of Georgia, Texas, USA and Trinidad.
* In Trinidad Range recently completed the acquisition of a 100% interest in holding companies with three onshore production licenses and fully operational drilling subsidiary. Independently assessed Proved (1P) reserves in place of 15.4 MMbls with 19.6 MMbls of proved, probable and possible (3P) reserves and an additional 20 MMbls (mean) of 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) of two exploration wells 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 licences encompassing the highly prospective Dharoor and Nugaal valleys. The operator and 60% interest holder, Horn Petroleum Corp. has completed the first exploration well (Shabeel-1) to a final depth of 3,470m having encountered a 12-20m zone of significant hydrocarbon pay in the Upper Cretaceous Jesomma Formation. The second well spud in early June 2012 and targeting best estimate Prospective Resources (100% basis) across the two wells of 170-300 mmbbls. * 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.
The reserves estimates for the 3 Trinidad blocks and update reserves estimates for the North Chapman Ranch Project and East Texas Cotton Valley referred above have been formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA is an international petroleum engineering and geologic consulting firm staffed by experienced engineers and geologists. Collectively FGA staff has more than a century of worldâ€"wide experience. FGA have consented in writing to the reference to them in this announcement and to the estimates of oil and natural gas liquids provided. The definitions for oil and gas reserves are in accordance with SEC Regulation Sâ€"X an 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.
The 40MMbo prospective Herrera resource has been identified internally by the Company's technical consultant Mr Paterson - who is a suitably qualified person and has reviewed the release and consents to the inclusion of his resource estimate.
RPS Group is an International Petroleum Consulting Firm with offices worldwide, who specialise in the evaluation of resources, and have consented to the information with regards to the Company's Georgian interests in the form and context that they appear. These estimates were formulated in accordance with the guidelines of the Society of Petroleum Engineers ("SPE").
The prospective resource estimates for the two Dharoor Valley prospects are internal estimates reported by Africa Oil Corp, the operator of the joint venture, which are based on volumetric and related assessments by Gaffney, Cline & Associates.
In granting its consent to the public disclosure of this press release with respect to the Company's Trinidad operations, Petrotrin makes no representation or warranty as to the adequacy or accuracy of its contents and disclaims any liability that may arise because of reliance on it.
The Contingent Resource estimate for CBM gas at the Tkibuli project is sourced from the publically available references to a report by Advanced Resources International's ("ARI") report in 2009: CMM and CBM development in the Tkibuli-Shaori Region, Georgia. Advanced ResourcesInternational, Inc., 2009. Prepared for GIG/Saknakhshiri and U.S. Trade and Development Agency.- .globalmethane.org/documents/toolsres_coal_overview_ch13.pdf. Range's technical consultants have not yet reviewed the details of ARI's resource estimate and the reliability of this estimate and its compliance with the SPE reporting guidelines or other standard is uncertain. Range and its JV partners will be seeking to confirm this resource estimate, and seek to define reserves, through its appraisal program and review of historical data during the next 12 months.
Reserve information on the Putumayo 1 Well published by Ecopetrol 1987.
SPE Definitions for Proved, Probable, Possible Reserves and Prospective Resources
Proved Reserves are those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.
Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.
Possible Reserves are those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recoverable than Probable Reserves.
Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and 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, but which are not currently considered to be commercially recoverable.
ABN 88 002 522 009www.rangeresources.com.auLondon
Suite 1A, Prince's House, 38 Jermyn Street, London SW1 6DN t: +44 (0)207 025 7040, f: +44 207 287 8028
Australia
Ground Floor, 1 Havelock Street, West Perth WA 6005, Australia t: +61 8 9488 5220, f: +61 8 9324 2400
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