1st Nov 2007 09:18
Range Resources Ltd ABN 88 002 522 009 34 Parliament Place West Perth WA 6005 P: +61 8 9488 5200 F: +61 8 9321 6699 [email protected] QUARTERLY REPORT FOR PERIOD ENDING 30 SEPTEMBER 2007 The Board is pleased to provide the following commentary to be read in conjunction with the Appendix 5B. HIGHLIGHTS: * Puntland confirms Range/Africa Oil PSA's * Competent Persons Report * Continued Government support for Range/Africa Oil exploration efforts
PUNTLAND CONFIRMS RANGE/AFRICA OIL PSA'S
During the quarter there was much speculation and debate in relation to theproposed introduction of a National Oil Law by the Transitional FederalGovernment (TFG) of Somalia. Of particular concern was the impact this NationalOil Law would have on the Range concessions. Range was pleased to advise on 13September that the Government of Puntland had reinforced its support for Rangeand its joint venture partner Africa Oil, and formally stated that it will notaccept the proposed new national oil law. The Puntland Government noted that intheir opinion, the proposed law was not only inconsistent with the rightsvalidly granted by the Puntland Government to Range (which were also endorsedby the TFG), but it would also be detrimental to the interests of Puntland andthe Somali people as a whole. Further more, it must be noted that the TFGparliament was adjourned abruptly over the weekend of 8 and 9 September whenthe proposed law was scheduled for debate. Therefore, the debate over theproposed law did not commence and the law was not considered by the TFGparliament.
It is also worth noting that since this time; the TFG Prime Minister Ali Mohammed Gedi has resigned. Gedi was the driving force behind the proposed National Oil Law.
Given the proximity of the drilling program of Range and Africa Oil the resultant success and generation of oil production royalties ensures that Range, Africa Oil and the Puntland Government remain committed to the exploration and development of Puntland's natural resources.
COMPETENT PERSONS REPORT
During the later part of the quarter Range was pleased to receive itsCompentent Persons Report which was prepared for the AIM listing. The reportwas prepared by oil and gas technical consultants Sproule InternationalLimited. As previously announced, the report included a resource estimate forthe Nogal Basin as summarized below: Table S-1 Summary of Undiscovered In-Place Oil Resources for the Nogal Valley Block
Puntland, Somalia Estimated Gross Oil-in-Place Estimated Net (20%) (MMbbls) Oil-in-Place (MMbbls) Low Best High Low Best High Undiscovered 2,213 4,301 10,397 443 860 2,079 Oil-in-Place Notes: (1) Estimates are on an unrisked basis; (2) Range Net interest of 20%(carried through exploration phase); and (3) Africa Oil is the operator (4) Theproperties have been assessed as unproved properties with no proved or probablereserves and no fair market value assigned at this time. There is no certaintythat any portion of the undiscovered resources will be discovered and that, ifdiscovered, that it will be economically viable or technically feasible to
produce.PUNTLAND OIL EXPLORATION
Africa Oil is currently in possession of a large amount of exploration dataobtained from previous hydrocarbon exploration in Puntland up until June 1990.Range was able to obtain some of this data in the latter part of 2006 and theremainder has been acquired by Africa Oil 2007. The documentation includes4500km of seismic line data from the Nogal Basin and 550km of seismic line datafrom the Darin Basin. The data also includes previous seismic and drilling dataprocessed prior to exploration activities ceasing in Somalia. The data showedthat the Nogal Valley area demonstrated:
1. Abundant oil shows;
2. Thick, high porosity reservoirs;
3. Many large structures; and
4. An excellent regional seal.
The Vibroseis data from the late 1980's obtained for the Nogal valley is ofgood quality and sufficient for mapping large structures while the data for theDarin Basin is of 1970's vintage and is only sufficient to delineate the basinitself. The data obtained for the Nogal Block was loaded into a KingdomWorkstation Project in June to undergo interpretation and the work done to datehas outlined and inventoried the main prospects and produced an initial basisfor recommendations for the next stage of exploration. Basin modelling andsource migration studies have also been undertaken and 11 prospects have beenoutlined in the study to date. These have been ranked on their prospectivitywith regard to the oil source migration and their structural controls. Furthergeophysical work is being undertaken to refine the seismic interpretationespecially to identify and correlate the formation tops and also a moredetailed study of the potential drill targets is required. In addition,analysis of key isochrones will be done to determine the timing constraints onthe rift and prospect formation.
In the Darin Block the seismic data needs to be interpreted and correlated with the geological assessment.
It is the intention to drill two wells as soon as a drilling rig is sourced. It is anticipated that the drilling programme will take place early 2008.
Africa Oil has identified two drilling targets in the Nogal block (one of whichis expected to be the 28/B-1 prospect), and it is the intention to drill twowells as soon as a drilling rig is sourced. It is anticipated that the drillingprogramme will take place early 2008.Prospect 28/B-1 was to be drilled in 1991 as a result of Conoco's explorationeffort. The exploration showed a Yemen style rift (graben) running throughblocks 28 & 29. Several major structures were mapped showing that the rightconditions were present for potential major oil accumulations and structureswere thought to be analogous to Hunt Oil's Alif Fields and the CanOxy fieldsdiscovered in the mid 1980s. In Prospect 28B Conoco postulated 2 reservoirtargets in well, with the most likely `oil reserve' to be in the vicinity of >500MBO recoverable.Range's nominated adviser is RFC Corporate Finance Ltd, contact: Stuart Laing,ph: +618 9480 2500. Appendix 5B Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity RANGE RESOURCES LIMITED Quarter ended ("current quarter") 30 September 2007 ABN 88 002 522 009
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to dateactivities $A'000 $A'000 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (449) (449) (b) development (c) production (d) administration (714) (714) 1.3 Dividends received 1.4 Interest and other items of a 206 206 similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other 5 5 Net Operating Cash Flows (952)
(952)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a)prospects (b)equity investments (c) other fixed assets (42) (42) 1.9 Proceeds from sale of: (a)prospects - - (b)equity investments (c)other fixed assets 1.10 Loans to other entities (14) (14)
1.11 Loans repaid by other entities 1.12 Other (provide details if material)
Puntland Mineral & Hydrocarbon Rights (14,548) (14,548)
Net investing cash flows (14,604)
(14,604)
1.13 Total operating and investing cash (15,556)
(15,556)
flows (carried forward) 1.13 Total operating and investing cash (15,556) (15,556) flows (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, 376 376 options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings - - 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Costs associated with issue of (50) (50) shares (refer to note) Net financing cash flows 326 326 Net increase (decrease) in cash 15,230 15,230 held 1.20 Cash at beginning of quarter/year 22,896
22,896 to date
1.21 Exchange rate adjustments to item
1.20 1.22 Cash at end of quarter 7,666 7,666
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.23 Aggregate amount of payments to the parties 326 included in item 1.2 and 1.7 1.24 Aggregate amount of loans to the parties included Nil in item 1.10 1.25 Explanation necessary for an understanding of the transactions Payments of Directors Fees $117k Payments for Financial/Company Secretarial/Office Support Services $198k Payment to a Director Related Associate $11k
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows Issue of 30,000,000 shares and 26,250,000 options ($1.00, 01 October 2010) to Consort Private Ltd for the remaining 49.9% hydrocarbon and mineral rights in Puntland, Somalia. 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest N/A Financing facilities availableAdd notes as necessary for an understanding of the position. Amount available Amount used $A'000 $A'000 3.1 Loan facilities - -
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A'000
4.1 Exploration and evaluation 1,200 4.2 Development - Total 1,200Reconciliation of cash
Reconciliation of cash at the end of the Current quarter Previous quarter quarter (as shown in the consolidated
statement of cash flows) to the related $A'000
$A'000
items in the accounts is as follows. 5.1 Cash on hand and at bank 1,090 2,303 5.2 Deposits at call 6,576 20,593 5.3 Bank overdraft - - 5.4 Other - Term Deposit - - Total: cash at end of quarter 7,666 22,896 (item 1.22)
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest at reference at end of (note (2)) beginning quarter of quarter 6.1 Interests in mining Nil tenements relinquished, reduced or lapsed 6.2 Interests in mining Nil tenements acquired or increased
Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number Issue price Amount paid up quoted per security per security (see note 3) (see note 3) (cents) (cents) 7.1 Preference + Nil securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions 7.3 +Ordinary 177,245,573 177,245,573 securities 7.4 Changes during quarter (a) Increases 38,279,188 38,279,188 through issues (b) Decreases Nil Nil through returns of capital, buy-backs 7.5 +Convertible Nil debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options Exercise Price Expiry Date 69,177,747 69,177,747 $1.00 1 October 2007 50,823,029 - $1.00 1 October 2010 2,952,029 $0.50 30 June 2012 7.8 Issued during 26,250,000 - $1.00 1 October 2010 quarter 7.9 Exercised 6,453 6,453 $1.00 1 October 2007 during quarter 7.10 Expired - - - - during quarter 7.11 Debentures Nil (totals only) 7.12 Unsecured Nil notes(totals only) 7.13 Partly Paid 5,000,000 Nil 60 cents 30 cents Shares Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
____________________Peter LandauExecutive Director31 October 2007Notes
1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect ofinterests in mining tenements acquired, exercised or lapsed during thereporting period. If the entity is involved in a joint venture agreement andthere are conditions precedent which will change its percentage interest in amining tenement, it should disclose the change of percentage interest andconditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not addressa topic, the Australian standard on that topic (if any) must be complied with. == == == == ==
RANGE RESOURCES LTDRelated Shares:
STA.L