Half Yearly Accounts

The Manager Company Announcements Australian Securities Exchange Limited Level 6, 20 Bridge Street Sydney NSW 2000 By e-lodgement HALF YEAR REPORT FOR THE PERIOD ENDING 31 DECMBER 2011 Please find attached extracts from the Company's Half Year Report for the period ended 31 December 2011, being the: - Statement of Comprehensive Income; - Statement of Financial Position; and - Statement of Cashflow. - Extract of notes A copy of the full Half Year Report is available on the company's website: www.rangeresources.com.au Yours faithfully Peter Landau Executive Director Contacts Range Resources Limited Peter Landau Tel : +61 (8) 8 9488 5220 Em: plandau@rangeresources.com.au Australia London PPR Tavistock Communications David Tasker Ed Portman/Paul Youens Tel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7920 3150 Em: david.tasker@ppr.com.au Em: eportman@tavistock.co.uk RFC Corporate Finance (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 ABN 88 002 522 009 DIRECTORS' REPORT Your directors submit the consolidated financial report of Range Resources Limited for the half-year ended 31 December 2011. 1. Directors The names of the Directors who held office during or since the end of the half-year: Sir Samuel Jonah Non-Executive Chairman Peter Landau Executive Director Anthony Eastman Executive Director Marcus Edwards-Jones Non-Executive Director 2. Results The Consolidated entity incurred an operating loss after income tax of $2,218,790 (December 2010: $2,213,841) for the half-year ended 31 December 2011. 3. Review of Operations Reserves and Valuation Upgrades - Trinidad and Texas Shortly before period end the Company announced the results of the independent Reserves and Valuation Report as prepared by the Company's Reserves Auditors, Forest A. Garb and Associates, ("Forest Garb"), which was an analysis of the estimated reserves, prospective resources and future net revenue attributable to the Company's portfolio of producing and development assets onshore Trinidad and Texas. The report included the 490% Proved (1P) Reserve increase in Trinidad following the completion of engineering work on the secondary recovery potential of the Company's Beach Marcelle block, however did not include the positive results from the Company's development drilling program at North Chapman Ranch in Texas, recent extensions to the Morne Diablo field in Trinidad where Range had drilled five successful development wells to period end, nor the significant exploration potential associated with the Herrera formation, which underlies the existing Trinidad blocks. Set out below is Range's attributable interest in the net recoverable reserves combined across the Texas and Trinidad assets which is net of government and overriding royalties and represents Range's economic interests in its development and production assets as classified in the report from Forest Garb. Category Oil Natural Gas Natural Gas (MMbbls) (Bcf) Liquids (MMBbls) Proved (P1) 16.1 10.8 0.7 Probable (P2) 2.8 5.5 0.5 Possible (P3) 3.7 14.6 1.3 Total Reserves 22.6 30.9 2.5 Prospective Resource Best 1.7 - - High 18.2 - - Total Reserves / Resources 42.5 30.9 2.5 Set out below is the total estimate Gross Reserves and Resources split between Trinidad and Texas. Category Oil Natural Gas Natural Gas (MMbbls) (Bcf) Liquids (MMBbls) Trinidad Texas Trinidad Texas Trinidad Texas Proved (P1) 16.2 6.0 3.2 64.3 - 5.0 Probable (P2) 3.0 4.4 - 48.6 - 3.8 Possible (P3) 2.9 11.6 - 129.6 - 10.1 Total Reserves 22.1 22.0 3.2 242.5 - 18.9 Prospective Resource High 2.4 - - - - - Best 25.0 - - - - - Total Reserves / Resources 27.4 22.0 3.2 242.5 - 18.9 Set out below is Range's attributable interest in the net recoverable reserves split between the Company's Texas and Trinidad assets which is net of government and overriding royalties and represents Range's economic interests in its development and production assets as classified in the report from Forest Garb. Category Oil Natural Gas Natural Gas (MMbbls) (Bcf) Liquids (MMBbls) Trinidad Texas Trinidad Texas Trinidad Texas Proved (P1) 15.4 0.7 3.2 7.6 - 0.7 Probable (P2) 2.2 0.6 - 5.5 - 0.5 Possible (P3) 2.0 1.7 - 14.6 - 1.3 Total Reserves 19.6 3.0 3.2 27.7 - 2.5 Prospective Resource High 1.7 - - - - - Best 18.2 - - - - - Total Reserves / 39.5 3.0 3.2 27.7 - 2.5 Resources Based on the reserve numbers cited above, Forrest Garb's estimated net undiscounted cash flow value to Range for Proved (P1), Probable (P2) and Possible (P3), along with discounted cash flow (at a 10% discount rate) valuation based on two pricing scenarios: - Flat US$85 / bbl oil and US$4.69 / Mcf gas - Nymex forward strip prices reported on 1 October 2011 following reductions for royalties, opex, capex, production taxes etc are as follows: Flat Nymex Forward Strip $85/bbl & $4.69/Mcf Price at 1 October 2011 Category Undiscounted PV10 Undiscounted PV10 US$'m US$'m US$'m US$'m Proved (P1) 787 452 885 495 Probable (P2) 211 115 243 129 Possible (P3) 335 134 420 162 Total Reserves 1,334 701 1,549 786 Trinidad Following the acquisition of the Trinidad assets, the Company commenced its initial 21 development well program on the Morne Diablo license area utilising the Company owned rigs. Five wells were completed during the period with two of the Company owned rigs, which included two sidetrack wells, with production for the period from Trinidad of circa 90k barrels of oil. Of the five successfully completed wells, the initial two wells were shallow `infill' wells, whilst the last three were step out wells which saw a significant increase in initial production per well, which has continued with the wells successfully completed subsequent to period end. Also during the period, an additional 70+ employees were added to the Trinidad operations resulting in operations now running on a 24 hour basis. Progress was made on a number of the rigs to get them drill ready, with the Company anticipating having four drilling rigs fully operational late March / early April, with all six drilling rigs being fully operational by mid-year. Advance site construction was completed on a number of well locations that allows for each rig to immediately move to the next location and continue with the development well program. Georgia During the period, the Company, along with its joint venture partners, successfully spudded the first exploration well - Mukhiani 1, on the Vani 3 Prospect on Block VIa with a planned target depth of circa 3,500m. The Mukhiani Well reached a total depth of circa 1,550m, and following the analysis of the re-interpretation of the seismic supported by the Mukhiani-1 Vertical Seismic Profiling ("VSP"), results indicated that the well encountered previously unrecognised faults that led to possible basement being encountered far earlier than predicted. New fault trap and stratigraphic trapping potential were also identified in the vicinity of the well and based on these findings; Range and its joint venture partners have the option to side-track and test these targets. However, the Company and its partners decided that, based on its exploration schedule and the availability of the drilling rig that it would continue onto the next proposed Kursebi well with site construction on the Kursebi 6 prospect continuing post period-end. Severe weather that has been experienced at the Kursebi 6 site over recent weeks has delayed the anticipated spudding date into April 2012. Also during the period, the Company engaged new independent technical consultants, NTD Energy, to provide overall technical support with respect to the Georgian operations which include: - Providing a fresh review of all of the seismic and geological data across the top 3 Kursebi prospects previously identified, as well as across the whole license areas; - Assisting in the management and supervision of the Company's drilling program for the Namakhavani well on the Kursebi 6 prospect; and - Assisting in the promotion and development of the unconventional (shale / CBM) plays that may exist across the two license areas. Texas North Chapman Ranch During the period the Company spudded the third well on North Chapman Ranch - the Smith #2 well. The Smith #2 well was an offset well to the existing Smith #1 well and was categorised as a proved undeveloped location. Drilling was completed in December 2012 followed by completion operations and the successful fracture stimulation of the well occurring post period end. The Smith #2 well is expected to come on-line into production shortly. The Smith #2 well was followed closely by the Albrecht #1 well which spudded shortly before period end. The Albrecht #1 well is an appraisal well that, if successful, is anticipated to prove up the reserves in the south-east portion of the North Chapman Ranch license area, and support the re-classification of the current Possible (P3) reserves into the Probable (P2) and Proved (P1) categories. East Texas Cotton Valley Prospect During the period, testing continued on the Ross 3H horizontal well as individual zones are perforated and swabbed to check fluid content prior to hydraulic fracturing. The Ross 3H was drilled to a total depth measured depth of 8,500 ft and showed good evidence of reservoir quality rock and oil saturation. Puntland During the period the operator of the Puntland onshore licenses, Horn Petroleum Corp. ("Horn") completed all of the sourcing of drilling related materials with the majority of materials arriving on site. Site preparation, including the drill site, air strip, ingress route construction and water wells were completed in readiness for the spudding of the historic first exploration (of two planned) well, Shabeel-1. The Sakson 501 rig will be used to drill both exploration wells which are expected to take approximately 90 days each for drilling and evaluation and are the first oil exploration well in the region to be drilled in over 20 years. Corporate Strategic Investment During the period, the Company completed a strategic investment in Tangiers Petroleum Limited ("Tangiers", ASX:TPT). Tangiers is an ASX listed exploration company which has a portfolio of two potentially world class oil and gas projects located in Morocco and Australia. The investment saw Range subscribe for 5m Tangiers shares at a price of $0.40 ($2m investment). Tangiers successful listed on the UK Alternative Investment Market ("AIM") subsequent to period end. Capital Raisings During the period the company completed a US$15m placement of shares and options to Socius CG II, an established and highly successful United States based investment group and wholly-owned subsidiary of Socius Group ("Socius"), with the share placement price being at a 10% premium to the Company's share price at the time of the placement. The Company also raised circa $4m through the exercise of options with the balance of cash physically received from the exercise of all outstanding options expiring 31 December 2011 occurring post period end. Also during the period the Company increased its existing credit facility with First Columbus by £30m and drew down £3m of this facility subsequent to period end. 4. Events Subsequent to Reporting Date Puntland Subsequent to period end the Company, along with its joint venture partners, successfully spudded the historic Shabeel-1 well on the Dharoor Block in Puntland, Somalia which has a total planned maximum depth of 3,800 meters. Drilling operations also commenced on the Shabeel North-1 well with the setting of the 30 inch surface casing and the drilling of a 50 meter pilot hole. The Sakson 501 rig is being used to drill both wells which are expected to take approximately 90 days each for drilling and evaluation. These two wells represent the first exploration wells to be drilled in the country in over 20 years and will satisfy the first exploration period drilling commitments as required under the Production Sharing Contracts for both the Dharoor and Nugaal Blocks. In order to provide sufficient time to evaluate drilling results, the Puntland Government has granted an extension of the first exploration period expiry date to 17 October 2012. Trinidad Subsequent to period end, the Company has successful drilled another three wells which has resulted in production increasing to circa 750 barrels of oil per day. The initial drilling program continues and it is anticipated that these number of rigs operating on the Company's onshore licenses will double during March/April, with another two rigs joining operations. It is then anticipated that the remaining two Company rigs will join operations towards the end of Q2, 2012 resulting in a significant ramp up in drilling activity, and subsequent accelerated increase in production. Work is nearing completion on the Company's extensive reprocessing of its 3D seismic database in Trinidad. State-of-the-art seismic reprocessing is expected to improve Range's ability to identify and image deeper drilling targets across its Morne Diablo and South Quarry acreage, including the prolific Herrera Formation. The Company believes that improved imaging of its 3D dataset will help define existing targets and lead to additional prospects, which should in turn result in lower dry hole costs and continued growth in reserves and production, respectively. Once data reprocessing is completed, the Company's technical team will begin by confirming its existing portfolio of deeper drilling targets, with the expectation of drilling its first deep test well in Q3 2012. Texas North Chapman Ranch Subsequent to period end, the Albrecht #1 appraisal well was logged and casing having been run. Completion operations have commenced in readiness for the well to be fracture stimulated and subsequently tied into production. Work is currently underway to revise the reserve estimates at North Chapman Ranch, and is expected to be finalised once the Albrecht #1 comes on line. 5. Auditors Independence Declaration The Lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 7 for the half-year ended 31 December 2011. This report is made in accordance with a resolution of the Board of Directors. 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. RANGE RESOURCES LIMITED ABN 88 002 522 009 STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2011 Consolidated 31 December 31 December 2011 2010 Notes $ $ Revenue from continuing operations Revenue from sale of goods 12,772,317 1,096,923 Interest revenue 150,299 140,031 Other income 1,823,494 8,530 Expenses from continuing operations Operating costs (8,277,128) (640,401) Depreciation (2,525) (11,467) Technical, Consultancy and Administration 2 (8,687,258) (2,719,040) expenses Realised loss on available for sale financial - (55,413) assets Foreign exchange gain/ (loss) 2,011 (8,737) Loss before income tax expense from 2 (2,218,790) (2,189,634) continuing operations Income tax expense - (24,207) Loss after tax from continuing operations (2,218,790) (2,213,841) Net loss for the half-year attributable to equity holders of Range Resources Ltd (2,218,790) (2,213,841) Other comprehensive income Changes in the value of available-for-sale 929,220 160,841 investments Exchange differences on translation of 1,357,218 - foreign operatives Other comprehensive income for the half-year, 2,286,438 160,841 net of tax Total comprehensive income / (loss) 67,648 (2,053,000) attributable to equity holders of Range Resources Ltd Continuing Operations Basic loss per share (cents per share) (0.13) (0.19) Diluted loss per share (cents per share) N/A N/A The Company's potential ordinary shares were not considered dilutive as the Company is in a loss position. The accompanying notes form part of these financial statements. RANGE RESOURCES LIMITED ABN 88 002 522 009 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011 Consolidated 31 December 30 June 2011 2011 Notes $ $ Current Assets Cash and cash equivalents 4,723,147 17,359,870 Trade and other receivables 7,519,457 3,002,395 Other current assets 3,444,964 309,013 Inventory 269,390 - Total Current Assets 15,956,958 20,671,278 Non-Current Assets Property, plant & equipment 189,501 19,883 Financial assets available for sale 3,941,562 912,342 Exploration & evaluation expenditure 6 95,710,495 87,809,879 Development assets 7 175,353,299 6,140,208 Deposits for investments 8 - 54,426,730 Investments in associates 9 5,891,595 5,891,595 Non-current receivable 10 18,279,546 12,122,177 Total Non-Current Assets 299,365,998 167,322,814 Total Assets 315,322,956 187,994,092 Current Liabilities Trade and other payables 11 10,782,651 1,419,646 Derivative financial instrument 4,193,777 - Provision 328,176 11,645 Total Current Liabilities 15,304,604 1,431,291 Non-Current Liabilities Borrowings 45,372 - Deferred tax 12 86,726,423 - Total Non-Current Liabilities 86,771,795 - Total Liabilities 102,076,399 1,431,291 Net Assets 213,246,557 186,562,801 Equity Issued capital 13 252,047,090 227,671,125 Reserves 23,234,968 18,708,387 Accumulated losses (62,035,501) (59,816,711) Total Equity 213,246,557 186,562,801 The accompanying notes form part of these financial statements. RANGE RESOURCES LIMITED ABN 88 002 522 009 STATEMENT OF CASHFLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011 Consolidated Notes 31 December 31 December 2011 2010 $ $ Cash Flows From Operating Activities Receipts from customers 10,844,981 811,833 Payments to suppliers and employees (12,342,084) (2,173,379) Interest received 150,299 140,031 Interest paid and borrowing costs (13,825) (222,063) Net cash provided by/(used In) Operating (1,360,629) (1,443,578) Activities Cash Flows From Investing Activities Payments for plant and equipment (172,143) - Payments for development expenditure (4,991,394) - Payments for exploration and evaluation expenditure (8,718,597) (2,246,351) Deposits to acquire investments - (5,780,624) Payments for investment in shares (2,100,000) - Loans to other entities (3,108,009) - Loans to associate (6,157,369) - Payment for acquisition of subsidiary, net 14 of cash acquired (4,613,945) - Net cash provided by/(used In) Investing (29,861,457) (8,026,975) Activities Cash Flows From Financing Activities Proceeds from issues of shares 19,350,982 10,001,657 Payment of share issue costs (765,619) (406,846) Loan funds received - - Net cash provided by/(used in) Financing 18,585,363 9,594,811 Activities Net Increase/(Decrease) In Cash and Cash (12,636,723) 124,257 Equivalents Held Cash and cash equivalents at beginning of 17,359,870 7,398,470 period Cash and cash equivalents at end of period 4,723,147 7,522,727 The accompanying notes form part of these financial statements. NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011 Note 1: Basis of Preparation The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 134: Interim Financial Reporting. The half year financial statements do not include all the notes of the type normally included in an annual financial report. Accordingly, it is recommended that these financial statements be read in conjunction with the annual financial report for the year ended 30 June 2011 and any public announcements made by Range Resources Limited and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001. Impact of standards issued but not yet applied by the entity The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. Reporting Basis and Conventions The half-year financial statements have been prepared on an accruals basis and are based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. Subsidiaries A controlled entity is any entity over which Range Resources Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered. As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. Where controlled entities have entered (left) the consolidated Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased). Inventories Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less any anticipated costs to be incurred prior to its sale. Oil and gas production activities Cost is allocated on an average basis and includes direct material, labour, related transportation costs to the point of sale and other fixed and variable overhead costs directly related to oil and gas production activities. Derivatives Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. Where a derivative financial instrument does not quality for hedge accounting, changes in fair value are recognised immediately in profit or loss within finance costs. Deferred Taxes At 31 December 2011, the Group has provisionally accounted for the business acquisition of SOCA Petroleum. In accordance with the requirements of Australian Accounting Standard AASB 112 Income Taxes, at the date of acquisition, a deferred tax liability of $72m has been recognised in relation to the difference between the carrying amount of the deferred exploration and development costs for accounting purposes and the cost base of the asset for tax purposes. The Group does not have a tax payable in relation to the deferred tax liability at 31 December 2011 and it is anticipated that the deferred taxation liability will be reduced in the future as the deferred exploration and development costs are amortised in future periods.

Companies

Star Phoenix Group Ltd NPV (DI) (STA)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today