Trinidad Operations Update
26 June 2012
The Manager
Company Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
By e-lodgement
TRINIDAD OPERATIONS UPDATE
Range Resources Limited ("Range" or "the Company") is pleased to announce an
update with respect to its Trinidad operations.
The Company continues to enjoy drilling success along its rapidly expanding
Lower Forest trend in the Morne Diablo Block. Encountered at a depth of roughly
1,000 ft. below the surface, Lower Forest wells are capable of adding 100-130
Bopd of initial production per well (average initial production to date circa
60 bopd noting that daily rates have increased per well with the step outs as
per the diagram below). Since acquiring its Trinidad acreage, the Company has
drilled 15 wells along the trend and successfully completed all 15 positioning
Range to reach 1,000 bopd in the coming weeks as well tests and perforations
are completed.
It should be noted that the Lower Forest wells drilled and tested to date are
showing sands congruent with the sands encountered in the QUN16 well that was
drilled and tested in 1942, which is located in the east of the Morne Diablo
license some 3,500 ft from the QUN127 well highlighted below (on the edge of
the red proposed drill locations per the diagram below). With the similarities
to the QUN 16 well having been encountered in the recently drilled wells, the
Company is looking at a 60+ well program for the Lower Forest horizon,
utilising the Company's shallow capacity rigs, that will look to `bridge the
gap' between the existing wells drilled to date and the QUN 16 well. QUN
129,130 and 131 are currently drilling the lower forest horizon.
Along with gains in production, the current drilling program will also add
reserves to the rapidly-expanding Range portfolio in Trinidad. Significant
upward revisions to the Company's Trinidad P1 and P2 reserves are expected to
be certified later in Q3 this year.
In addition to ongoing success with the currently drilling rigs, Range will
stage in additional equipment throughout the year as it continues to add rigs
with greater operating depth capabilities. With three rigs already drilling,
the Company recently commissioned its Rig #8, capable of reaching depths of
9,000 to 10,000 ft. The first 6,500 ft well to spud shortly followed by two
Herrera wells.
Commissioning of Rig 8
With Rig #8 in service, the Company will extend producing trends within the
Upper, Middle, and Lower Cruse sections, where production rates and recoveries
per well are considerably higher than the shallower producing horizons. Range
will shortly commence drilling of the first of its deeper locations on the
Morne Diablo Block, where offset wells have produced at initial rates of
200-400 Bopd and recovered up to 400,000 bbls. With additional development in
the more prolific deeper reservoirs, production growth from the Company's
Trinidad holdings is expected to accelerate over the next 12 months to more
than 4,000 Bopd not taking into account any secondary recovery projects.
Range is increasingly enthusiastic about the considerable exploratory potential
on its Morne Diablo and South Quarry Blocks, where high impact exploratory
prospects have been identified in the Herrera Formation alone. The first of
these prospects is scheduled for drilling in Q3 this year.
Herrera Prospects
The Company has undertaken significant technical work to refine its portfolio
of Herrera prospects over the past 12 months, incorporating 3D seismic data,
all available subsurface control, and the known regional geology of the
Herrera, which produced over 300 million barrels in the nearby Barrackpore/
Penal complex alone.
After identifying sizeable unrisked exploratory potential, Range has now added
40 MMbo (recoverable) in identified Herrera Prospective Resources to its
prospect portfolio. Depending on the thickness and oil saturation of the
Herrera where encountered, initial rates could potentially surpass 500 Bopd per
well, making an immediate impact on Range's growing production base.
Following the initial 2 planned Herrera wells, the Company fully expects the
Herrera program to grow in the number of identified prospects and additional
reserve potential.
Secondary Recovery
As a compliment to the ongoing exploration and development of the Morne Diablo
and South Quarry Blocks, Range will move rapidly ahead with its secondary
recovery projects on Morne Diablo through the expansion of the existing pilot
program, as well as on the Beach Marcelle Block. Applications for environmental
approval, expansion of technical and visualization infrastructure in the new
San Fernando office, and utilization of in-house reservoir modelling software
are all underway in support of the enhanced oil recovery ("EOR") projects.
As previously announced, the Company has certified more than 12 MMbo of Proved
Reserves that remain to be produced from the Beach Marcelle Field alone with
further Proved Reserves anticipated on following the expansion of the existing
Morne Diablo pilot EOR program. An aggressive work program is expected to begin
in each area once reservoir simulation work is completed and all necessary
approvals are in hand.
TRINIDAD RESERVES & RESOURCES Oil (MMbbls)
(RANGE 100%)
Proved (P1) 15.4
Probable (P2) 2.2
Possible (P3) 2.0
Total Reserves 19.6
Prospective Resources - Additional 18.2MMbo of previously certified Prospective
Resources plus 40MMbo of new Prospective Resources with respect to the Herrera
Formations.
Issue of Shares
Range Resources Limited is pleased to announce the issue of the following
securities:
* 45,000,000 Ordinary Fully Paid Shares to be issued upon completion of first
hydrocarbon well drilled in Puntland as per original agreement
* 19,820,000 Ordinary Fully Paid Shares to be issued upon exercise of unlisted
options (£0.075p, 31 January 2017)
Application will be made for the 64,820,000 new shares to be admitted to
trading on the ASX and AIM. Trading in the new shares is expected to commence
on or around 3 July 2012.
Following the issue of these securities the total number of securities on issue
are as follows:
2,357,627,605 Ordinary Fully Paid Shares (RRS)
855,166 Unlisted Options (£0.04, 30 June 2015)
7,058,824 Unlisted Options (£0.17p, 30 April 2016)
3,177,029 Unlisted Options (A$0.50, 30 June 2012)
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
Old Park Lane Capital Research Note
An updated research note from Old Park Lane Capital will be made available on
the Company's website.
A fully formatted version of this announcement which contains relevant diagrams
and photos can also be found on the Company's website.
Yours faithfully
Peter Landau
Executive Director
Contacts
Range Resources Limited
Peter Landau
Tel : +61 (8) 8 9488 5220
Em: plandau@rangeresources.com.au
PPR (Australia) Tavistock Communications (London)
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 Group 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 GMP Securities Europe LLP (Joint Broker)
Daniel Fox-Davies / Oliver Stansfield Nick Morgan / 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 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 licences
encompassing the highly
prospective Dharoor and Nugaal valleys. The operator and 60% interest
holder, Horn Petroleum
Corp. (TSXV: HRN) has completed the first exploration well (Shabeel-1) to a
final depth of
3,470m having encountered a 12-20m zone of significant hydrocarbon pay in
the Upper
Cretaceous Jesomma Formation. The second well spud in early June 2012 and
targeting best
estimate Prospective Resources (100% basis) across the two wells of 170-300
mmbbls.
* 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.
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.
The 40MMbo prospective Herrera resource has been identified internally by the
Company's technical consultant Mr Paterson - who is a suitably qualified person
and has reviewed the release and consents to the inclusion of his resource
estimate.
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.
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.
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
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