12th Apr 2012 08:27
12 April 2012The ManagerCompany AnnouncementsAustralian Securities Exchange LimitedLevel 6, 20 Bridge StreetSydney NSW 2000By e-lodgementTRINIDAD UPDATERange Resources Limited ("Range" or "the Company") is pleased to announce itsinitial 21 well program continues to make significant progress with three ofthe Company rigs now fully operational. The QUN 119 / QUN 120 and QUN 122 wellshave all been successfully drilled and logged and are in the process of beingbrought into production. QUN 121 now has a drilled surface hole and cementedsurface casing.
The QUN 119 well was successfully completed, targeting the Lower Forest formation. Following the successful completion, the well achieved initial production rates of 130 bopd with production now stabilised to circa 100 bopd under natural pressure.
The QUN 120 well was drilled to target depth (TD) of approximately 2,475 ft targeting the Lower Forest and Upper Cruse formations. The well is scheduled for testing in several zones with indications of 39 feet of oil pay in the Upper Cruse formation and 47 feet of additional pay in the Lower Forest formation. The well is targeting 120 bopd from the several zones encountered.
The QUN 121 well has cemented surface casing and will be drilled with Rig 5 (the Company's third rig into operation) to a TD of approximately 950 ft targeting the Lower Forest formation in the coming days.
The QUN 122 well was drilled to a TD of approximately 950 ft intersecting theLower Forest formation. Well logs have indicated approximately 90 ft ofresistive oil sands. Production testing is currently being performed with thewell showing initial production rates of up to approximately 50 bopd undernatural pressure.Rig 2 has moved from the QUN 120 well to the QUN 124 location and is preparingto commence drilling shortly. Rig 1 has moved to a new location, QUN 123. Boththe QUN 123 and 124 wells will be targeting the Lower Forest sands with a TD ofapproximately 950 ft and 1,300 ft respectively.
The above activity should see the operations move over 1,000 bopd in the coming weeks.
Key Developments Moving Forward
The Company's fourth rig (#8) is set to join operations during the month (April) and will be targeting the Middle to Lower Cruse sands to a depth of circa 6,500ft which have the potential to produce in the range of 150-300 bopd. Rig 8 is also capable of drilling the deep Herrera formation targets.
The remaining two medium depth rigs are scheduled to be operational by mid year. This will see the Company utilising all of its 6 rigs in the coming months. Of note, a further 30 personnel have recently been hired as the Company continues to accelerate its development program.
The Company's developmental drilling program on the Morne Diablo license willcontinue to look to extend the existing trends that have been confirmed by thecurrent drilling program. Rig's 1, 2 and 5 will drill 10-12 Lower Forest wellsin response to the excellent flow rates being achieved from that section.Completion of each individual well is anticipated to be between 2-3 weeks witha target initial production rate from each of circa 50-100 bopd.
3D Seismic Reprocessing
Work is nearing completion on the Company's extensive reprocessing of its 3Dseismic database in Trinidad. State-of-the-art reprocessing by Houston-basedseismic experts Geotrace will improve Range's ability to identify and imagedeeper drilling targets across its Morne Diablo and South Quarry acreage,including the prolific Herrera Formation.The Company believes that improved imaging of its 3D dataset will help defineexisting targets (with volumetrics) and lead to additional prospects. This inturn should result in lower dry hole costs and continued growth in reserves andproduction, respectively. Once data reprocessing is completed, the Company'stechnical team will begin by confirming its existing portfolio of deeperdrilling targets (expected in May / June) with the first deep Herrera well
scheduled for Q3.Yours faithfullyPeter LandauExecutive DirectorContactsRange Resources LimitedPeter LandauTel : +61 (8) 8 9488 5220Em: [email protected] LondonPPR Tavistock CommunicationsDavid Tasker Ed Portman/Paul YouensTel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7920 3150Em: [email protected] Em: [email protected]
RFC Corporate Finance (Nominated Advisor) Old Park
Lane Capital (Joint Broker)Stuart Laing Michael ParnesTel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188 Panmure Gordon (Joint Broker) Katherine Roe / Brett Jacobs Tel: +44 (0) 207 459 3600Range Background
Range Resources Limited is a dual listed 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. Re-interpreted seismic supported by the Mukhiani-1 vertical seismic profiling has identified new fault and stratigraphic trapping potential with the possibility of a side track well to be drilled post additional seismic in 2H 2012. * 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. has spud
the first well in a two well programme in early 2012 targeting 300mmbls and
375mmbbls of best estimate Prospective Resources (100% basis). Site
construction has been completed on the second well with the setting of the
30 inch surface casing and the drilling of a 50 meter pilot hole in
readiness for spudding following the completion of the first well.
* 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 242 Bcf of natural gas, 15 mmbbls of
oil and 19 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.
The reserves estimates for the 3 Trinidad blocks and update reserves estimatesfor the North Chapman Ranch Project and East Texas Cotton Valley referred abovehave been formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA is aninternational petroleum engineering and geologic consulting firm staffed byexperienced engineers and geologists. Collectively FGA staff has more than acentury of worldâ€"wide experience. FGA have consented in writing to thereference to them in this announcement and to the estimates of oil and naturalgas liquids provided. The definitions for oil and gas reserves are inaccordance with SEC Regulation Sâ€"X an in accordance with the guidelines of theSociety of Petroleum Engineers ("SPE"). The SPE Reserve definitions can befound on the SPE website at spe.org.RPS Group is an International Petroleum Consulting Firm with offices worldwide,who specialise in the evaluation of resources, and have consented to theinformation with regards to the Company's Georgian interests in the form andcontext that they appear. These estimates were formulated in accordance withthe 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 withrespect to the Company's Trinidad operations, Petrotrin makes no representationor warranty as to the adequacy or accuracy of its contents and disclaims anyliability that may arise because of reliance on it.
SPE Definitions for Proved, Probable, Possible Reserves and Prospective Resources
Proved Reserves are those quantities of petroleum, which by analysis ofgeoscience and engineering data, can be estimated with reasonable certainty tobe commercially recoverable, from a given date forward, from known reservoirsand under defined economic conditions, operating methods, and governmentregulations.
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 geoscienceand engineering data indicate are less likely to be recoverable than ProbableReserves.Prospective Resources are those quantities of petroleum estimated, as of agiven date, to be potentially recoverable from undiscovered accumulations byapplication of future development projects. Prospective Resources have both anassociated chance of discovery and a chance of development. ProspectiveResources are further subdivided in accordance with the level of certaintyassociated with recoverable estimates assumingtheir discovery and developmentand may be sub-classified based on project maturity.
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
e: [email protected]: www.rangeresources.com.au
PINXRelated Shares:
STA.L