30th Sep 2014 09:06
LONDON (Alliance News) - Range Resources Ltd Tuesday said its pretax loss widened following a major write-off of assets and increased finance costs, as it looks to focus on developing its operations in Trinidad through further acquisitions.
Range's shares were down33% to 1.08 pence per share Tuesday morning following the release of its results for the 2014 financial year. The shares hit an intraday low of 0.96p, still above its 52-week low of 0.61p.
The oil & gas explorer reported a pretax loss of USD64.8 million in the year ended June 30, versus USD18.3 million in the 2013 financial year. The widened loss was primarily caused by a rise in finance costs to USD21.8 million from USD4 million and by the writing off of assets to the value of USD24.3 million.
"The company has made good progress on its strategy of disposing of non-core assets," said Chief Executive Rory Russell. Range has reduced its stake in its Guatemalan project, refocused its strategy in Colombia to three assets in which it has a 10% interest, and has exited from its "high commitment" PUT-6 and PUT-7 blocks in the country, it said. It is also in the process of selling its projects in the US and the Republic of Georgia.
Range's revenue for the 2014 financial year amounted to USD21.2 million, a decrease from the USD26.1 million reported the previous year.
"It is clear that the year to June 30, 2014, has been particularly challenging for Range, but I am firmly of the view that developments over the last six months have put the company on to a much more solid footing," said Russell.
It plans to focus on its operations in Trinidad, in which it has a 100% working interest in the Morne Diablo, South Quarry and Beach Marcelle licenses.
"There is no denying that the production figures reported for the year are disappointing and below where we were hoping...Largely due to a historic lack of investment in drilling rigs which has prevented our drilling operations from running at full capacity," Russell added.
The company said it produced an average of 573 barrels of oil per day over the financial year from Trinidad.
Range said it was unlikely the company would meet its production target at Trinidad of 1,000 barrels of oil per day by the end of 2014, but believes ongoing improvements to its rig fleet, and a better understanding of its acreage, will allow the company to meet production forecasts during the first-half of 2015.
"Our rigs will require further investment before they are capable of carrying out our ongoing drilling plans and running at a capacity that will enable us to achieve our production targets," said Russell.
It plans to spud the first of two onshore exploration wells in Trinidad during the first-quarter of 2015.
Range also signed a USD15 million loan financing with Lind Asset Management LLC, which it said will provide it with medium-term financing for its plans in Trinidad, with the aim of securing longer-term finance which "remains an important target for the company", it said.
The loan is for a maximum term of 24 months and will be available in two tranches. The first tranche will total USD10 million and the second tranche will total USD5 million, which will be available at the company's option, six months after the first tranche. The total amount repayable under the facility is USD18.375 million, said Range.
Each tranche is repayable over an 18-month period from the date of drawdown. Each repayment can be made on a monthly basis, at Range's option, either through cash or shares or a mixture of both, it added.
Range reported a cash balance of USD3 million at June 30.
"The year ahead will see the company maintaining focus on creating value from our assets in Trinidad and rationalising the remaining non-core assets in the portfolio," said Russell.
Range will use its relationship with governments, national oil companies, key service providers and customers to make its Trinidad site more profitable, whilst capturing new opportunities, it said in its statement Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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