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Range Resources (LSE:RRL) was forced to issue a statement on 14th December saying that it noted unusual share trading activity and knew of no reason for this but that it plans operational updates within the next few days. Though I continue to believe that the shares are materially overvalued at 3.95p (my target price is 1.5p) I find myself having real sympathy for the company. I guess it is all that Christmas spirit filtering through even to my black Ulster heart.
Range’s shares are always heavily traded. And they can move sharply on rumour. Clearly the company has at least two material issues which are causing intense speculation. But if shares are traded heavily for a couple of days the company – like any company – is forced to make a statement which leaves all of us none the wiser.
For alerts on all articles by Tom Winnifrith follow him on twitter @tomwinnifrith
So what are we waiting for? There is a Trinidad well MD 248, a deep well which spudded during the quarter ended 30th September. This is kind of important and results should have been out by now. I assume they are imminent but, quite correctly, Range is waiting for full data before releasing. It is incredibly frustrating for oil companies to be forced to issue half-cocked results from a well by a share price movement or heavy trading. Clearly folks are speculating about this well.
Elsewhere there is the proposed sale of the US assets for $20 million upfront plus royalties. We were led to believe that we would get an update around 30th November when due diligence was completed and cash in by the year end. But you know how these things can ebb and flow in terms of timing. One suspects that an announcement is imminent and that folks are speculating about that. But what could Range say now that would be useful? Nothing. Until it has ink on a firm contract.
And so I sympathise with the company. Having to put out such an update is a pointless distraction and a waste of management time and you cannot say that it adds a jot to what we know or do not know. One hopes that news on these two issues is imminent but, quite rightly, any company wants a complete picture before issuing an RNS. We do not know whether the news from Trinidad is good, bad or indifferent. As was the case on Thursday night we must just wait. We are none the wiser.
I am still a bear for reasons that are well known but for once I actually feel some sympathy for Range boss Peter Landau and his team.
Tom Winnifrith is a minor speaker at the UKInvestor Show on April 13th. Headline speakers include investment legends Nigel Wray, Evil Knievil, Nick Leslau and gold guru Dominic Frisby all of whom really can be said to be a true master investor. Also on the main stage is UKIP leader Nigel Farage MEP. For a full list of the 16 big name speakers booked in so far or to secure your free ticket click here
It does not mention the word ”volume” in the statement and they were not forced into making a statement, if your efforts to short this stock also include misleading your readers then good luck with that.
If £90m is undervalued then I suggest you go back to school and learn some maths.
Tom,
Whats the beef? Your investment advice is somewhat cloudy, why did you leave or forced out of your last outfit, why do you hound Range? The shareprice has been manipulated with continual blocking orders, buys regularly outstrip sells.
May I suggest you take your extensive employment interests including pizza and selling tee shirts somewhere else as your comments on Range are somewhat misguiding others.
1.5p would value RRL at under £35M – have you even researched the ammount that RRL paid for Trinidad prior to massive updated P1s, waterflood potential or Herrera information??? You are a clown, even at 1000 BOPD RRL will be generating $12M profit per annum (prior to new fiscal terms), and we all know the BOPD figure is NOW much higher than this…. Shockingly poor journalism as usual, Tom. Not sure why you have such a feeble axe to grind here… I think you will come face to face with many RRL holders at the UKInvestor show in April – I have no clue why you would be made a ‘minor’ speaker at this event, but it will be entertaining hearing you justify your ridiculous RRL position…. x
Well said, 1.5p value is nonsense in anyones book.
Shorters only weapon is trying to instill fear in investors minds.
Do proper research and you will find this is a firm buy at this price.
Langyboy
You are correct – article amended. Since sp had not moved much I think the activity referred to is clearly volumes. As to valuation, well read previous pieces – stand by my call ( so far correct).
Brgmg69 – No beef. I just enjoy writing & in this case expressing sympathy for RRL. Showing I am all heart. You may suggest what you wish. The chances of my following your career guidance are not great. I “may suggest” that folks using an anoymous handle to post abuse are cowardly tools – you do not have to agree with me.
P-X. What one pays and what an asset is worth are rarely the same. At 1000 bopd that operatoon would produce $8-12m profit. Yes but then look at a) ongoing capex need, b) life of those wells and c) PLC costs.
At 75,000 bopd Premier Oil is valued at £1.7 billion.It has great exploration upside. So it is valued at £22 m per bopd produced. You appear to think that Range’s oil is worth four times as much? care to explian why?
Re UK-investor show would be delighted to see you there & happy to chat about why Range produced such valuable oil.
Best wishes & Merry Christmas to you all
Tom
TW do you deliver? can i have a 20″ with extra cheese and pepperoni
cheers
lol comparing premier oil to rrl thats made my xmas, its that simple you know lol
Says it all really, we are valued @£22 per BOOIL because thats how Premier Oil are valued, well thats just made life a hell of a lot easier, just go through every O&P and any that are valued at more than this short and write some nonsense block to that effect.
God why didnt I see it sooner.
So you really believe uplift costs are comparable do you onshore production in a safe stable environment with the companies own drilling company. Against prominently offshore production with contracted rigs, drillers and associated additional costs there? Get real at the very least use a company operating onshore in the same environment for a comparison.
I am not even going to respond to your Premier oil comparison – laughable, if not so tragic… I really hope that nobody takes your words too seriously….
Tom,
How many aliases do you have across the boards???
How about Pabloiom for starters????
Last two Q’s Tom,
If you are so convinced about Range why didn’t you have the conviction to leave your articles about Range on your website? Why remove them? If you are so sure about Range surely you would of been proved right if it had come to court.
Secondly, Can we have a full and indepth explanation as to why you left Tips.
Much appreciated Tom for some honest candid replies.
Brgmg69
I am writing freely about Range am I not? I am sure. Cripes and this was a symathetic piece.
t1ps – sorry bound by a compromise agreement. I did state openly that I worked on in the summer expecting a change of management. That did not happen so I left to work for myself. That is in the public domain.
And no, we do not do delivery at Real Man Pizza but you can go pick up a takeaway but there is a 300% surcharge for utter wankers so, in your case, you better bring a credit card.
Best wishes & Merry Christmas
Tom
Angry Tom? Angry? Have you been busy kitchen portering at you pizza take out gaff? Is that why it took time for you to reply?
Anyway you haven’t answered my question, why did you take your original posts about range down from your website? with that in mind why are you posting a very watered down post today? Did you lose conviction in what you posted originally or were you made to remove them? If you were made to remove them why didn’t refuse and stand by your conviction and keep the posts up?
So which is it Tom, could you not back your posts up or not selling enough T-shirts to cover the court costs of the potential litigation by Range.
Tom sorry to hear you dont do take outs however i’ve just had a great idea for a pizza take out spin off, instead of Dominos pizza you could call your
Tominos
or Tominos nothing
What do you reckon? a goer?
Tom Tom Tom even better idea when we go into business we could call it
Tominos nothing but Pizza
Brilliant Tom don’t you think we could do it in red and white writing and and and have a pizza in place of the O’s.
Is this not the same company you “advised” people to sell a few years ago before it rocketed over 300% ?
You just keep bashing range and your mate simon you have no idea.
Judge me at year end merry Xmas
Best regards
Peter landua
Amusing when ‘Peter Landua’ can’t even spell him own name correctly.
If I was so confident I’d invested in a good share I certainly wouldn’t be getting so upset by a negative article on the internet. Bit of overcompensation going on boys?
Yes I agree, If I was invested in a company that were all roses I wouldn’t bother to comment in the way people have commented here. No one has a 100 per cent guarantee on any company share price in the future but everyone is entitled to their opinion.
Regards to valuation as at todays 52 week low share price the following are worth noting;
Price to book 0.51
Price to Tang. Book 0.61
Price to Sales 4.38
Regards to safety are the assets relatively productive in terms of earnings?
This is the most significant factor in the Altman score. It measures the true productivity of the firm’s assets, independent of any tax or leverage factors.Since a firm’s ultimate existence is based on the earning power of its assets, Altman found that this measures continually outperforms other profitability measures in assessing the risk of corporate failure, including cash flow.
The test : Earnings Before Interest and Taxes/Total Assets > -0.082
Range Resources: Earnings Before Interest and Taxes/Total Assets = -0.037 (SAFE)
Regards to Volume
Volume Change (%) 10d vs 3m -19.8% hence part of the reason for the fall in share price. The other reason is management of RRL need to be clear and precise with information that investors can understand clearly without second guessing otherwise shareholders may choose to hedge their funds elsewhere, which everyone is entitled too.
Finally
Market Cap £87.2m
Enterprise Value £80.4m
Market Cap Rank 692nd
Therefore the company has net cash.
Hopefully the above facts have taken out some of the guesswork to why the share price, valuation and safety mean for people invested in RRL.
I am not invested in RRL and considering investing (especially if the price did fall to 1.5p) plus any real positive news from RRL management would be another factor to invest. At the moment there is too much uncertainty and that makes investors like me nervous.