Georgia, Puntland and Financing Update
15 November 2012
The Manager
Company Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
By e-lodgement
GEORGIA, PUNTLAND AND FINANCING UPDATE
GEORGIA
Range Resources Limited ("Range" or "the Company") along with its joint venture
partners Red Emperor Resources ("Red Emperor") and Strait Oil & Gas ("Strait")
are pleased to announce the completion of the acquisition of a 200km seismic
program.
Following the results of the earlier 410km 2D seismic programme, priority
prospects were identified on Block VIa, whilst a number of leads were
identified on Block VIb. The majority of the recent seismic was acquired over
Block VIb to firm up these leads identified in the previous seismic programme,
along with targeting two gas wells which were drilled and suspended in Soviet
times. Two lines were also acquired over the same structure on which the
Mukhiani well was drilled last year.
Processing is under way and results of the interpretation are expected to be
completed early next year, with the Company confident that it will then have
assembled the requisite amount of seismic and geological information to enable
the Company to identify revised drillable targets and attract potential farm in
partners if desired.
GIG Joint Venture
The Company continues to develop the CBM and conventional potential around the
Tkibuli-Shaori Coal Field ("Tkibuli"). The Georgian Industrial Group ("GIG")
has made available a significant amount of information including a detailed
geological model based on 339 wells drilled in the region, many of which vented
methane. Range and its partners are looking to finalise the joint venture
agreement with GIG for the development of Tkibuli in the current quarter with
the potential for third party financing being available to fund the programme.
It is envisaged that following completion of the current technical and economic
analysis, between three and four pilot production well locations will be
identified with drilling expected to commence in Q2 2013.
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
Tkibuli alone.
The Georgian Industrial Group (GIG) is the largest holding company within the
Country and embraces a number of subsidiary companies operating in the energy
sector, acquisition and processing of natural resources, production of building
materials, logistics service and real estate development.
GIG was established in 2006 and has invested tens of millions of (US) 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 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.
PUNTLAND
The Company is pleased to provide the following update on operations as
announced by its Puntland Joint Venture partner and Operator, Horn Petroleum
Corp ("Horn") on the Company's exploration project in Puntland, Somalia. The
blocks are operated by Horn who holds a 60% working interest in the Dharoor and
Nugaal Valley Production Sharing Agreements ("PSA's") along with Range (20%)
and Red Emperor (20%).
Horn has demobilized the drilling rig and associated equipment and has
completed restoration of both drilling locations. Efforts are now focused on
making preparations for a seismic acquisition campaign in the Dharoor PSA which
will include a regional seismic reconnaissance grid in the previously
unexplored eastern portion of the basin as well as prospect specific seismic to
delineate a drilling candidate in the western portion of the basin where an
active petroleum system was confirmed by the recent drilling at the Shabeel-1
and Shabeel North-1 locations. This seismic programme is expected to commence
in the first half of 2013. The joint venture continues to pursue efforts to
drill an exploration well in the Nugaal PSA and is working with the Puntland
government authorities to move this project forward.
The joint venture is in active discussions with potential partners.
FINANCING UPDATE
$10m Funding Draw Down
Range is also pleased to announce that it has issued A$10m in secured notes
(secured at the corporate level - registered charge) to fund requisite
exploration bonds required for its Putamayo 6 and 7 blocks in Colombia and
ongoing operations. The notes were purchased by Crede Capital Group ("Crede").
Crede is an international investor with offices in Los Angeles and New York.
The Notes have a term of 12 months and carry a 10% interest rate. Crede will
also receive 25% warrant coverage (£0.05075, 30 November 2015) at a 125%
premium to the volume-weighted average price and can be paid back in cash or
equity on or before the 12 month term at the Company's election. The facility
has been drawn down to complement the recently announced conditional sale of
its Texas interests (US$40m - half cash up front, half royalty). Range is
pleased to be progressing its Colombian blocks and is in the process of
completing an independent technical review of the previously drilled Put-1 Well
(historical reserves of 7.8m bbls) and will be releasing the results of the
review shortly.
Issue of Shares
Range Resources Limited is pleased to announce the issue of the following
securities:
* 10,656,242 Ordinary Fully Paid Shares issued at A$0.054
* 22,500,000 Ordinary Fully Paid Shares issued at £0.04
* 55,973,933 Ordinary Fully Paid Shares issued in lieu of cash for financial
facilitation, introductory and corporate advisory fees
* 15,708,801 Unlisted Options (£0.0615, 19 October 2015) issued as part of
loan facilities
* 32,275,862 Unlisted Options (£0.05075, 30 November 2015) issued as part of
loan facilities
Application will be made for the 89,130,175 new shares to be admitted to
trading on the ASX and AIM. Trading in the new shares is expected to commence
on or around 21 November 2012.
Following the issue of these securities the total number of securities on issue
are as follows:
2,446,757,780 Ordinary Fully Paid Shares (RRS)
855,166 Unlisted Options (£0.04, 30 June 2015)
7,058,824 Unlisted Options (£0.17p, 30 April 2016)
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
15,708,801 Unlisted Options (A$0.125p, 31 March 2015)
32,275,862 Unlisted Options (A$0.125p, 31 March 2015)
Peter Landau
Executive Director
Contacts
Range Resources Limited
Peter Landau
Tel : +61 (8) 9488 5220
Em: plandau@rangeresources.com.au
PPR (Australia) Tavistock Communications (London)
David Tasker Ed Portman
Tel:+61 (8) 9388 0944 Tel: + 44 (0) 207 920 3150
Em: david.tasker@ppr.com.au Em: eportman@tavistock.co.uk
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
Fox-Davies Capital Limited (Joint Broker) GMP Securities Europe LLP (Joint Broker)
Daniel Fox-Davies / Richard Hail James Pope / Chris Beltgens
Tel: +44 (0) 203 463 5000 Tel: +44 (0) 207 647 2800
Range Background
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, 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 programme 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 programme 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 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 InternationalPetroleum 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 programmeand 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 Reservesare 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 Reservesare 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 Reservesare 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 Resourcesare 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 Resourcesare 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-Placeis 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.
ABN 88 002 522 009
www.rangeresources.com.au
London
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
e: admin@rangeresources.com.au