2nd Jun 2014 08:41
LONDON (Alliance News) - Range Resources Ltd Monday said it has entered into a services agreement with LandOcean Energy Services Co Ltd, coupled with a financing package of USD50 million.
The hydrocarbon exploration firm said that as part of a master services agreement, LandOcean will be the preferred services contractor for Range's oilfield services, including geoscience, engineering, procurement and construction.
The company said services provided under the deal will be agreed on an individual basis and where services have led to increased production, LandOcean will be entitled to an incremental production bonus share of its costs and capital expenditure. It said the deal will last eight years and could cover a total contract value of up to USD400 million.
Range Resources also said that in addition to the agreement, LandOcean will provide the company with an option to take up to USD50 million in financing, primarily for LandOcean's services.
The company said payment of the financing would be made in tranches, with the first USD20 million subject to interest at 10% per year and with the first interest payment a year after draw down.
As part of the deal, Range and LandOcean have entered the first purchase order, to draw down USD5 million worth of services, including a wide-ranging geological and engineering study of secondary recovery projects in the Beach Marcelle, Morne Diablo and South Quarry fields in Trinidad.
Range Resources shares were up 21% to 1.24 pence, putting it in the top AIM ALL-Share risers in early trading on Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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