Trinidad Development and Exploration Update

RNS Number : 9797M

Range Resources Limited

13 May 2015

 



Trinidad Development and Exploration Update

Range is pleased to provide a Trinidad update with the following highlights:

·     Average production in Trinidad in May reached 650 barrels of oil per day (bopd) from an average of 617 bopd in the previous month;

·     The work programme on the first 13 development and exploration wells to be drilled this year has been finalised;

·     Range and LandOcean are also finalising 9 additional development and exploration wells to be drilled as part of the 2015 / 2016 work programme;

·     Funding for these wells is available under the extended 12 month credit facility with LandOcean which has enabled Range to commence its exploration and development programmes. In addition, Range is in discussions with Sinosure and LandOcean to finalise the previously announced US$50 million trade financing package;

·     All necessary approvals have been received on the first three wells, including an exploration well on the Guayaguayare licence (the Canari North well) and preparations are underway to spud these wells during the current quarter;

·     During the current quarter to date, the Company has:

o  Initiated testing operations on the QU 454ST development well located in the South Quarry field. This well was drilled to a target depth of 2,000 ft. in the previous quarter. The well encountered potential oil bearing sands in three zones and is currently being tested from the lowest zone;

o  Brought into production the QU 455 development well, located in the South Quarry field. This well was drilled to a target depth of 890 ft. in the previous quarter. The well is scheduled for optimisation in the short term; and

o  Waiting to perforate the QU 456 development well, located in the South Quarry field, subject to relevant government approvals. This well was drilled to 2,002 ft. in the previous quarter.

Upcoming development and exploration work programme

Range and its strategic partner LandOcean Energy Services Co., Ltd (LandOcean) have completed geological and geophysical studies aimed at improving operational efficiency, and sub-surface evaluation, in order to reduce risk and improve well economics by drilling the best possible targets and increasing production potential. These studies have prioritised the first 13 development and exploration wells to be drilled this year (please refer to the table below for further information on these wells). In addition, Range and LandOcean are finalising 9 additional development and exploration wells to be drilled as part of the 2015 / 2016 work programme, the details of which the Company expects to announce shortly.

Funding for these wells is available under the extended 12 month credit facility with LandOcean as announced on 1 May 2015, which enables Range to commence its planned exploration and development programmes in Trinidad immediately. In addition, further to the announcement on 11 December 2014 in relation to the second purchase order under the Integrated Master Services Agreement for US$50 million of services from LandOcean, the Company is currently in the process of amending the purchase order to include provision of drilling services of the developments wells, as well as waterflooding work.

The drilling services will be provided by LandOcean on a turnkey basis and priced in line with market rates in Trinidad, to be reviewed periodically by both parties.

Well	Location	Depth (ft.)	Target Horizon	Development / Exploration	Proposed Spud Date
1. QUN 158	Morne Diablo	2,000	Lower Forest and Upper Cruse	Development	May
2. Canari North	Guayaguayare (Shallow)	5,000	Lower Gros Morne	Exploration	June
3. MD 249	Morne Diablo	3,000	Upper Cruse and Middle Cruse	Development	June
4. QUN 16R	Morne Diablo	2,000	Upper Cruse	Development	Q3 2015*
5. QUN 15 Outstep	Morne Diablo	2,000	Upper Cruse	Development	Q3 2015*
6. QUN 16 Outstep	Morne Diablo	2,000	Upper Cruse	Development	Q3 2015*
7. GGY Deep Commitment	Guayaguayare (Deep)	8,500	Upper Cretaceous	Exploration	Q3 2015*
8. GY 218SE	Beach Marcelle	3,000	Upper Gros Morne	Development	Q3 2015*
9. GY 2R	Beach Marcelle	2,000	Upper Gros Morne	Development	Q4 2015*
10. GY 161S	Beach Marcelle	3,000	Upper Gros Morne	Development	Q3 2015*
11. GY 180SE	Beach Marcelle	4,000	Lower Gros Morne	Development	Q4 2015*
12. GY 68W	Beach Marcelle	1,800	Middle Gros Morne	Development	Q4 2015*
13.GY 300/298W	Beach Marcelle	3,000	Middle Gros Morne	Development	Q4 2015*

*Subject to government and regulatory approvals

Planned work programme on the first 13 wells

The first two development wells QUN 158 and MD 249 are located on the north flank of the Southern Range anticline.

The QUN 158 is a step-out well to be drilled to a total depth of 2,000 feet. The well will be targeting the relatively under-explored Lower Forest 3 sands, which flowed at a stabilised production rate of 120 bopd in the recently drilled QUN 157 well, located 200 feet to the South East. The QUN 158 well will also be testing a less-explored Upper Cruse formation, which is well-developed in nearby QUN 120 and QUN 128 wells.

The MD 249 is an infill well which will be drilled to a total depth of 3,000 ft. to test the prolific Upper Cruse channel sand complex and the extent of the underlying Middle Cruse sand trend, also productive in the immediate area.

The Company will provide a separate announcement during May on the progress of the ongoing drilling preparations on the Canari North exploration well on the Guayaguayare licence, ahead of anticipated well spudding in June 2015.

The Company has received all necessary approvals to proceed with the first three wells (the QUN 158, MD 249, and Canari North wells) and is currently in the process of preparing and submitting the final documents for drilling approvals on the other 10 wells.

In order to improve forward planning and reduce approval-related delays as much as possible, the Company has implemented a new tracking system which has resulted in the submission processes becoming more consistent. Range is in the process of establishing a production planning department to manage the drill locations and planning in advance, including permitting of all drilling locations.

In addition, Range along with other operator companies in Trinidad, has been working with relevant authorities to define better guidelines, which have led to improved submission and approval timelines.

Electromagnetic Surveying (Stratagem)

The Company has also received regulatory approvals to conduct Electromagnetic Surveying in the Morne Diablo and South Quarry fields. This new technology will be used to image shallow resistive bodies and identify possible oil reservoirs at 1,000 feet or less, thus reducing exploration and development risks at a relatively low cost with minimal environmental impact. Based on the potentially high impact these surveys could have, they will be given priority status in all undrilled acreage where shallow hydrocarbon potential may be present.   

Range looks forward to providing further operational updates in due course. A full year production forecast will be provided later in Q2 2015.

Further comment and information
Range Resources Limited Evgenia Bezruchko (Investor Relations) e. [e-mail] t.   [phone]	Cantor Fitzgerald Europe (Nominated Advisor and Broker) David Porter / Sarah Wharry (Corporate Finance) Richard Redmayne (Corporate Broking) t.   [phone]

 

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