30 Aug 2012 07:03
30 August 2012The ManagerCompany AnnouncementsAustralian Securities Exchange LimitedLevel 6, 20 Bridge StreetSydney NSW 2000By e-lodgement
TRINIDAD UPDATE - Rig 8 Spud
Highlights:
* Final inspections of Rig 8 complete - operations to spud the MD248 well will now commence * Four drill rigs, including Rig 8, now operational on the Morne Diablo Block targeting multiple horizons; the Lower Forest formation (circa 1,000 ft.), the Upper Cruse formation (circa 2,000 ft.) and the Middle & Lower Cruse formations (circa 4,000 ft. and 6,500 ft. respectively). * Once target depth is reached at the MD248 well (expected to take 6-8 weeks), Rig 8 will then be moved on to drill the first well primarily targeting the deeper Herrera formation as well as both the Forest and Cruse formations
Range Resources Limited ("Range" or "the Company") is pleased to announce that Rig 8 was inspected by the Trinidad regulatory authorities last week with a follow-up inspection having been completed on Tuesday 28 August. The Company will now commence operations to spud the MD248 well.
This is a significant achievement for the Company which now has four drilling rigs in operation including Rig 8. Rig 8 is Range's largest drilling rig, capable of drilling to approximately 11,000 ft.; a depth believed to be sufficient to test the highly prospective Herrera exploration targets.
The MD248 well will target the development of the Middle Cruse sands at 4,000 ft., as well as explore the Lower Cruse formation at 6,500 ft. This will be the first well drilled by the Company that targets both the Middle and Lower Cruse formations.
Upon completion of the MD248 well, Rig 8 is scheduled to move on to drill the first of a series of wells that primarily target the prolific Herrera formation as an exploratory target. The first well in this program is designed to test multiple objectives and will penetrate both the Forest and the Cruse formation targets as well as the primary Herrera target.
The Herrera test well will be an important step forward in Range's Trinidad drilling campaign, as it is expected to yield critical stratigraphic control at the Herrera level. This in turn will help to calibrate the broader Herrera exploration program.
The Company is in the process of finalising the application for the above-referenced location as part of the Company's Herrera exploration program. Once lodged, it is anticipated to take four to six weeks for approval. However, as has been experienced in the past, this is likely to be subject to change. In anticipation of the well's approval, construction of the location will commence in the next one to two weeks with the land having already been cleared.
Peter Landau, Executive Director commented "Our active drilling fleet in Trinidad continues to grow with the addition of Rig 8 to the line-up. With Rig 8 in service, the Company is now able to test all of the identified conventional targets on its existing acreage. We are confident that as the drilling program progresses, Rig 8 will encounter new reservoirs in both the known field plays and deeper objectives. Given the existing infrastructure, any new reserves would be expected to be translated into additional production and cash flow in a very short time."
Yours faithfullyPeter LandauExecutive DirectorContactsRange Resources LimitedPeter LandauTel : +61 (8) 9488 5220Em: plandau@rangeresources.com.auPPR (Australia) Tavistock Communications (London)David Tasker Ed PortmanTel: +61 (8) 9388 0944 Tel: + 44 (0) 207 920 3150Em: david.tasker@ppr.com.au Em: eportman@tavistock.co.uk
RFC Ambrian 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 / Richard Hail James Pope / Chris BeltgensTel: +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 licenses encompassing the highly prospective Dharoor and Nugaal valleys. The operator and 60% interest holder, Horn Petroleum Corp. 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.
All of the technical information, including information in relation to reserves and resources that is contained in this document has been reviewed internally by the Company's technical consultant, Mr Mark Patterson. Mr Patterson is a geophysicist who is a suitably qualified person with over 25 years' experience in assessing hydrocarbon reserves and has reviewed the release and consents to the inclusion of the technical information.
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.
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 Resources International, 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.
1P refers to Proved Reserves, 2P refers to Proved plus Probable Reserves 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 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.
Undiscovered Oil-In-Place is that quantity of oil which is estimated, on a given date, to be contained in accumulations yet to be discovered. The estimated potentially recoverable portion of such accumulations is classified as Prospective Resources, as defined above.
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