9 May 2012
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
Range Resources Limited ("Range" or "the Company") is pleased to announce that
following a strategic review of the current operations in Georgia, that the
Company, along with its partners, Strait Oil & Gas and Red Emperor Resources NL
(ASX:RMP/AIM:RMP), is to embark on a revised exploration and appraisal strategy
for Blocks VIa and VIb in Georgia.
Appraisal of Coal Bed Methane ("CBM") Potential
The revised strategy will focus on low-cost, shallow appraisal drilling of
historically defined Contingent Resources around the Tkibuli-Shaori ("Tkibuli")
CBM field, which straddles the central sections of the Company's two blocks.
Tkibuli has been estimated by Advanced Resources International to contain
Contingent Resources (mean) of approximately 0.4 trillion cubic feet ("tcf") of
coal-bed methane ("CBM") gas (Range's attributable 40% interest is 0.16 tcf).
Sand horizons have also been identified around the coal beds, which could add
additional, conventional hydrocarbon resources to those estimated for CBM at
By prioritising exploration around the productive coal seams, the Company has
the opportunity to make early discoveries, add proven reserves and look to
provide revenue potential from the Tkibuli CBM play within 18 months from
commencement of drilling, in conjunction with satisfying its Production Sharing
Agreement ("PSA") commitments.
Georgia Industrial Group Partnership
Range and its partners have executed a conditional agreement with the Georgian
Industrial Group ("GIG") regarding the joint development of the project and
providing a commercial offtake for 100% of the gas produced.
The Georgian Industrial Group was established in 2006 and has invested tens of
millions of (USD) dollars in the local economy and continues to support
prospective businesses. GIG operate the 200MW gas-fired power station located
at Gardabani as well as importing 25% of gas currently used in Georgia. The
power station currently does not use any gas sourced locally in Georgia.
GIG is the largest holding company within the Country and embraces a number of
subsidiary companies operating in the energy sector, acquiring and processing
of natural resources, production of building materials, logistics service and
real estate development.
GIG operations are concentrated on the acquiring and processing of the
Country's resources which, in turn, fosters the long-term development and
success of Georgian industries.
The Company will, with its technical partners NTD Energy Limited, utilise the
latest in exploration and development technology to focus on shallower plays
where the geology is relatively well understood. This strategy will not only
greatly reduce Range's drilling cost, but also significantly reduce the
Project's geological risk. Over 400 exploration and non-hydrocarbon wells have
been drilled in the Tkibuli area, many encountering hydrocarbons and one
producing gas for over 35 years. An initial pilot project will focus on
appraising targets already venting methane and so ensuring a higher chance of
New wells will target horizons at depths between 500 and 2,000 metres and can
be drilled within 45 days. Deviated drilling will maximise intersection of the
coal seams and could allow the use of a single pad for multiple wells, further
reducing preparation and mobilisation costs. The Company estimates that the
pilot programme could commence with a 3 well programme in the fourth quarter of
2012 following initial appraisal. The fast-track program is designed for gas
production and sales to begin within 18 months given the proximity of in place
infrastructure and logistics.
CBM has become an increasingly important source of energy around the world and
production is well established in the US, Australia and China. Access to market
is key to commercialisation and, although major pipelines transect the country,
Georgia remains almost entirely dependent on imports of foreign natural gas.
CBM production from Tkibuli, therefore, could immediately be fed into the local
Range's Executive Director, Peter Landau stated, "following a strategic review
on how best to maximize our technical and geological positioning in Georgia,
the CBM and unconventional opportunities identified represent a significant
boost to Range's activities across its exciting portfolio. From a cost /
benefit perspective the revised program will achieve far more in terms of near
term development potential than the proposed deeper Namakhvani-1 wellwhich
hadbeen severely hampered by weather conditions. Range looks forward to
commencing its next stage of development across its Georgian blocks with the
current seismic program and the new CBM initiatives".
The Company is also in discussion with a number of parties that have expressed
interest in the possible unconventional shale opportunities that exist across
the two Blocks.
265km Seismic Programme to Commence
As a result of this change in short term strategy, preparations for drilling
the Namakhvani-1 well, which had been severely hampered by poor weather
conditions over the past few months, have been postponed. The Company will
continue with the proposed 265km seismic programme, but will alter it to ensure
that it can further define the existing potential around Tkibuli as well as
some known shallower potential targets and unconventional shale opportunities.
The program will include a seismic cross section over the recently drilled
Mukhiani Well to assist with evaluating the potential for a side track well
based on the geological encounters to date.
Range Resources Limited
Tel : +61 (8) 8 9488 5220
PPR Tavistock Communications
David Tasker Ed Portman/Paul Youens
Tel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7920 3150
Em: firstname.lastname@example.org Em: email@example.com
RFC Ambrian Limited (Nominated Advisor) Old Park Lane Capital (Joint Broker)
Stuart Laing Michael Parnes
Tel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188
Panmure Gordon (Joint Broker)
Katherine Roe / Brett Jacobs
Tel: +44 (0) 207 459 3600
Range Resources Limited is a dual listed (ASX:RRS; AIM:RRL) 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
* 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) well drilled in Q4 2011. The Company is focusing on a revised
development strategy that will focus on low-cost, shallow appraisal
drilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli")
CBM deposit, which straddles the central sections of the Company's two
* 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. (TSXV: HRN) has spud
the first well in a two well programme in early 2012 targeting 300mmbls and
375mmbbls of best estimate Prospective Resources (100% basis). Site
construction has been completed on the second well with the setting of the
30 inch surface casing and the drilling of a 50 meter pilot hole in
readiness for spudding following the completion of the first well.
* 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 242 Bcf of natural gas, 15 mmbbls of
oil and 19 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.
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 world–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 S–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 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.
SPE Definitions for Proved, Probable, Possible Reserves and Prospective
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
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
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 88 002 522 009
Suite 1A, Prince's House, 38 Jermyn Street, London SW1 6DN
t: +44 (0)207 025 7040, f: +44 207 287 8028
Ground Floor, 1 Havelock Street, West Perth WA 6005, Australia
t: +61 8 9488 5220, f: +61 8 9324 2400