Half-yearly Report
16 March 2011
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 2010
Please find attached extracts from the Company's Half Year Report for the
period ended 31 December 2010, being the:
* Statement of Comprehensive Income;
* Statement of Financial Position; and
* Statement of Cashflow.
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
Peter Landau
Tel : +61 (8) 8 9488 5220
Em: plandau@rangeresources.com.au
Australia London
PPR Tavistock Communications
David Tasker Jonathan Charles
Tel: +61 (8) 9388 0944 Tel: +44 (0) 20 7920 3150
Em: david.tasker@ppr.com.au Em: jcharles@tavistock.co.uk
RFC Corporate Finance (Nominated Advisor) Old Park Lane Capital (Broker)
Stuart Laing Michael Parnes
Tel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188
DIRECTORS' REPORT
Your directors submit the consolidated financial report of Range Resources
Limited for the half-year ended 31 December 2010.
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
$2,213,841 (December 2009: $1,764,380) for the half-year ended 31 December
2010.
3. Review of Operations
Georgia
During the period, the Company received the results from the report entitled
Seismic Interpretation, Field Mapping and Evaluation of Prospective Hydrocarbon
Volumes across the Company's two Georgian blocks (Block VIa and Block VIb)
completed by leading International Oil and Gas Seismic Consultancy firm RPS
Energy ("RPS").
RPS identified a total of 68 structural culminations across the two blocks each
of which potentially contains stacked reservoirs. Total combined best estimate
of gross unrisked oil-in-place across these 68 indentified structural
culminations amounts to 2,045 million barrels. Recovery factors for oil in
place can be conservatively estimated at 30%.
Of the 68 identified prospective targets across the two blocks, 6 structures
have been prioritised as being ready for drilling. Of these 6 structures, total
gross unrisked oil-in-place has been estimated at 728 million barrels.
Commencement of Geochemical Activities
Range engaged international geochemical company, Actual Geology International
Limited ("AGI") to carry out a "helium" survey on the 3 top multi-stacked
prospects as identified by RPS Energy which have estimated undiscovered
oil-in-place in excess of 450 mmbbls (mean 100% basis).
AGI were given the co-ordinates of three of the six identified "ready to drill'
prospects and commenced mobilisation and field operations in early December.
AGI completed all field work subsequent to period end in early January and then
began laboratory analysis which was then completed.
The survey was a "blind test" where AGI shot the survey without any prior
seismic info on the co-ordinates provided by Range/Strait. After the survey and
results were compiled by AGI they were then integrated with the existing
seismic results to produce the best possible target locations to be drilled.
Texas
North Chapman Ranch
During the period the Company received a revised reserve report on the North
Chapman Ranch field in Nueces County, Texas, following the successful drilling
and completion of the Russell-Bevly #1 appraisal well. As previously reported
the Russell-Bevly well confirmed the Company's structural and stratigraphic
models and established additional Proved oil and gas reserves across the
northwest flank of the closure.
After integration of data obtained from the Russell-Bevly #1, Lonquist & Co
LLC's ("Lonquist") independent reserves report has estimated the following
gross commercially recoverable reserves from the North Chapman Ranch Field:
Category Natural Gas Oil (Mmbbls) Natural Gas
(Bcf) Liquids
(Mmbbls)
Proved (P1) 62.4 4.8 4.5
Probable (P2) 34.6 2.7 2.5
Possible (P3) 142.5 10.9 10.3
Total Reserves 239.5 18.4 17.3
Set out below is Range's attributable interest in the gross recoverable
reserves on 25% of the Smith #1 well and on 20% of the remaining wells assuming
the exercise of certain clawback provisions by joint venture partners occurs
following the success of the Smith #1 and Russell-Bevly wells:
Category Natural Gas Oil (Mmbbls) Natural Gas
(Bcf) Liquids
(Mmbbls)
Proved (P1) 12.7 1.0 0.9
Probable (P2) 6.9 0.5 0.5
Possible (P3) 28.5 2.2 2.1
Total Reserves 48.1 3.7 3.5
Based on the reserve numbers cited above, Lonquist's estimated net undiscounted
cash flow value to Range, along with PW10 discounted cash flow (at a 10%
discount rate) using the same commodity price deck as used in the May 2010
report, following reductions for royalties, opex, capex, production taxes etc
are as follows:
Reserve Category Undiscounted PW10 US$
US$
Proved (P1) 100m 69m
Probable (P2) 60m 37m
Possible (P3) 252m 142m
Estimated Future Cashflow (Range's $412m $248m
net interest)
Changes to reserve estimates at North Chapman Ranch included a significant
movement of Probable Reserves into the Proved category, as well as new reserves
established by the Russell-Bevly #1 appraisal Well.
Trinidad
During the period the Company entered into a binding Heads of Agreement through
SOCA Petroleum ("SOCA") to acquire its rights to a 10 percent interest in
companies whose wholly owned subsidiaries hold production licences for three
blocks in producing onshore oilfields in Trinidad (see Figure 2) and a major
local drilling company.
The production acreage and operating wells cover the Morne Diablo, Beach
Marcelle and South Quarry oilfields, with the total acreage covering 16,253
gross acres on the southern coast onshore Trinidad.
4. Events Subsequent to Reporting Date
Puntland
Subsequent to period-end Range, together with its joint venture partners,
Africa Oil Corp. ("Africa Oil") and Lion Energy Corp., entered into amending
agreements with the Government of Puntland, in respect of the production
sharing agreements ("PSAs") for the Dharoor Valley Exploration Area and the
Nugaal Valley Exploration Area.
The key amendments were as follows:
* Under the PSAs, as amended, the First Exploration Agreement has been
extended for a further 12 months, from January 17, 2011 to January 17,
2012; and
* Under the amended PSAs, a minimum of one exploratory well must be spudded
in the Dharoor Valley Exploration Area by July 27, 2011. A second
exploratory well is required to be spudded in the Nugaal Valley Exploration
Area or, at the option of Africa Oil (as operator), in the Dharoor Valley
Exploration Area, by September 27, 2011.
Range has also agreed with its joint venture partner and operator Africa Oil
that the second exploration well due for spudding on or before 27 September
2011, will be included as part of Africa Oil's exploration commitments under
the Joint Venture Agreement between Range and Africa Oil. Under this agreement,
Africa Oil is obliged to spend US$22.5m in both Dharoor and Nugaal before Range
reverts to a contributing basis.
Africa Oil has satisfied their commitments with respect to Dharoor, however to
date, still has circa US$15m expenditure commitments on Nugaal, with
expenditure to date on Nugaal being circa US$7.5m. With the second well being
able to satisfy the joint ventures obligations under the Nugaal PSA, Range will
be carried for the first US$15m spent on the well.
Texas
East Texas Cotton Valley Prospect
Also during the period, the Company looked to acquire an additional 8.19% in
the East Cotton Valley Prospect which was subject to pre-emptive rights from
the Prospects other partners. Subsequent to period end, none of the partners
exercised their pre-emptive rights and Range completed the acquisition of the
additional 8.19% for a total cost of $148,000 in lease acquisition costs and an
overriding royalty retained by the seller, bringing Range's total interest to
21.75%.
Georgia
Subsequent to period end the result of the helium survey by Actual Geology
indicated active oil & gas presence in the first 2 drill targets (as identified
following the RPS Seismic Report) with the survey identifying priority zones
which are most likely to contain potentially productive systems.
The productive zones, which have been distinguished at the Mukhiani and Kursebi
areas, are suitable targets for exploration and, if successful, development
drilling.
Range and its joint venture partners also concluded the drilling contract and
logistics ahead of the planned mobilisation for late March with the objective
of spudding of the first well in April.
Range entered into a Heads of Agreement with Red Emperor Resources NL ("Red
Emperor") (ASX: RMP) to acquire a 20% farm-in interest (10% from Range and 10%
from Strait) in Block VIa and Block VIb in Georgia.
The key terms of the HOA will see Red Emperor contribute 40% of the drilling
costs for the planned two well program (capped at total gross costs of $14m -
RMP contributing $5.6m) to acquire the 20% interest in the two blocks.
Corporate
Subsequent to period end the Company has raised circa A$17m through the
exercise of options and drawdown on its equity line of credit facility.
The Company has also been included in the FTSE AIM All Share Index ("the
Index") in the UK. In order to qualify for inclusion in the Index the Company
must meet certain liquidity requirements over a twelve month period, which the
Company met during 2010.
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
2010.
This report is made in accordance with a resolution of the Board of Directors.
Peter Landau
Executive Director
Dated this 16th day of March 2011
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED
31 DECEMBER 2010
Consolidated
Notes 31 December 31 December
2010 2009
$ $
Revenue from continuing operations
Revenue from sale of goods 1,096,923 -
Interest revenue 140,031 5,239
Other income 8,530 -
Expenses from continuing operations
Operating costs (640,401) -
Depreciation (11,467) (14,416)
Administration expenses 2 (2,719,040) (1,698,726)
Realised loss on available for sale financial (55,413) -
assets
Foreign exchange loss (8,737) (56,477)
Loss before income tax expense from 2 (2,189,634) (1,764,380)
continuing operations
Income tax expense (24,207) -
Loss after tax from continuing operations (2,213,841) (1,764,380)
Net loss for the half-year attributable to (2,213,841) (1,764,380)
equity holders of Range Resources Ltd
Other comprehensive income
Changes in the value of available-for-sale 160,841 280,870
investments
Other comprehensive income for the half-year, 160,841 280,870
net of tax
Total comprehensive income / (loss) (2,053,000) (1,483,510)
attributable to equity holders of Range
Resources Ltd
Continuing Operations
Basic loss per share (cents per share) (0.19) (0.40)
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.
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2010
Consolidated
Notes 31 December 30 June
2010
2010
$
$
Current Assets
Cash and cash equivalents 7,522,727 7,398,470
Trade and other receivables 267,805 2,038,997
Other current assets 526,101 200,000
Total Current Assets 8,316,633 9,637,462
Non-Current Assets
Property, plant & equipment 22,340 24,837
Financial assets available for sale 393,484 420,147
Exploration expenditure 6 84,647,597 83,848,855
Development assets 7 4,965,835 3,359,401
Deposits for investments 8 19,592,284 13,811,660
Total Non-Current Assets 109,621,540 101,464,900
Total Assets 117,938,173 111,102,367
Current Liabilities
Trade and other payables 338,375 1,587,397
Provision 6,211 6,211
Total Liabilities 344,586 1,593,608
Net Assets 117,593,587 109,508,759
Equity
Issued capital 9 146,442,177 137,327,825
Reserves 17,675,077 16,490,760
Accumulated losses (46,523,667) (44,309,826)
Total Equity 117,593,587 109,508,759
The accompanying notes form part of these financial statements.
STATEMENT OF CASHFLOWS
FOR THE HALF-YEAR ENDED
31 DECEMBER 2010
Consolidated
Notes 31 December 31 December
2010 2009
$ $
Cash Flows From Operating Activities
Receipts from customers 811,833 -
Payments to suppliers and employees (2,173,379) (1,692,320)
Interest received 140,031 5,239
Interest paid and borrowing costs (222,063) (75,562)
Net cash provided by/(used In) Operating (1,443,578) (1,762,643)
Activities
Cash Flows From Investing Activities
Payments for plant and equipment - (5,842)
Payments for exploration and development 6 (2,246,351) (2,465,053)
expenditure
Deposits to acquire investments 7 (5,780,624) (3,733,812)
Loans to other entities - (79,638)
Net cash provided by/(used In) Investing (8,026,975) (6,284,345)
Activities
Cash Flows From Financing Activities
Proceeds from issues of shares 9 10,001,657 6,509,969
Payment of share issue costs (406,846) (305,325)
Loan funds received 8 - 1,600,000
Net cash provided by/(used in) Financing 9,594,811 7,804,644
Activities
Net Increase/(Decrease) In Cash and Cash 124,257 (242,344)
Equivalents Held
Cash and cash equivalents at beginning of 7,398,470 416,417
period
Cash and cash equivalents at end of period 7,522,727 174,073
The accompanying notes form part of these financial statements.
Range Background
Range Resources 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 and Texas, USA.
* Range holds a 25% interest in the initial Smith #1 well and 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. Drilling of the first well has
resulted in a commercial discovery with independently assessed gross
recoverable reserves in place (on a 100% basis) of 240 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, with the prospect's project area encompassing
approximately 1,570 acres including a recent oil discovery. Independently
assessed gross recoverable reserves in place (on a 100% basis) of 5.4
Mmbbls of oil.
* In Puntland, Range holds a 20% working interest in two licences
encompassing the highly prospective Dharoor and Nugaal valleys with the
operator and 45% interest holder Africa Oil Corp (TSXV:AOI) planning to
drill two wells in 2011.
* In the Republic of Georgia, Range holds a 40% farm-in interest in onshore
blocks VIa and VIb, covering approx. 7,000sq.km. Range has recently
completed a 410km 2D seismic program with independent consultants RPS
Energy identifying 68 potential structures containing an estimated 2.045
billion barrels of oil-in-place (on a mean 100% basis).
* In Trinidad, Range has entered into a HOA to acquire a 10% interest in
holding companies with three onshore production licenses. Independently
assessed gross recoverable 2P reserves in place of 4.8MMbls (on a 100%
basis).
The reserves estimate for the North Chapman Ranch Project and East Texas Cotton
Valley has been formulated by Lonquist & Co LLC who are Petroleum Consultants
based in the United States with offices in Houston and Austin. Lonquist
provides specific engineering services to the oil and gas exploration and
production industry, and consults on all aspects of petroleum geology and
engineering for both domestic and international projects and companies.
Lonquist & Co LLC have consented in writing to the reference to them in this
announcement and to the estimates of oil, natural gas and natural gas liquids
provided. These estimates were formulated 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 reserves estimates for the 3 Trinidad blocks 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.
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").
ABN 88 002 522 009
www.rangeresources.com.au
London
5th Floor, 23 King Street,
St. James House, London SW1 6QY
t: +44 207 389 0588, f: +44 207 930 2501
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
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