490% P1 Reserve Upgrade in Trinidad & Operational Update
November 18 2011 - 2:35AM
UK Regulatory
TIDMRRL
18 November 2011
The Manager
Company Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
By e-lodgement
490% P1 RESERVE UPGRADE IN TRINIDAD AND OPERATIONAL UPDATE
HIGHLIGHTS
* Increase in Proved (P1) Reserves in Trinidad by 490% from 2.6 Mmbbls to
15.4 Mmbbls
* The 12.8 Mmbbls increase in Proved (P1) Reserves has independent valuation
(PV10) of approximately US$ 290MM
* Proposed production program (from new reserves) of 1m-1.5m bbls per year
for a minimum of 8 years
Range Resources Limited ("Range" or "the Company") is pleased to announce that
under the Beach Marcelle Incremental Production Service Contract ("IPSC"), its
wholly owned subsidiary Los Bajos Oil Limited has with Petrotrin established P1
reserves of 12.8 million barrels of oil based on extensive independent
engineering studies of its mature oil fields in Trinidad. It should be noted
that under the IPSC, in ground reserves belong to Petrotrin. The reserves are
then able to be economically developed and exploited by the Contract partner
pursuant to an agreed work program.
This increase in reserves follows the recently completed engineering studies of
secondary recovery potential in the Company's Beach Marcelle Block. Range,
through its wholly owned subsidiary Los Bajos Oil Limited will seek all
necessary approvals to commence development in early 2012 and commit to a $12m
development program over the next 12-18 months.
The engineering review, performed by the Company's Dallas-based reserve auditor
Forrest A. Garb & Associates ("Forrest Garb"), confirmed that significant
volumes of crude remain in the Beach Marcelle field that are expected to be
recoverable using standard secondary recovery techniques such as water
flooding. The water flood program has been engineered to produce approximately
1m to 1.5m barrels per year for the first 8 years following initial production
and has an attributable valuation of approximately US$290MM (PV10) as
determined by Forest Garb taking into account all relevant project economics
(capital and operating expenditure, production taxes and royalties, and a US$85
per barrel WTI crude oil price).
Range Resources Managing Director Peter Landau commented "we are extremely
delighted with the addition of around 13 million barrels of recoverable oil to
the Trinidad Project. Adding 1 - 1.5m barrels per year of production for the
first 8 years, whilst not impacting on our other production and exploration
initiatives already in place is a significant boost to the Range portfolio.
The development programme to bring these reserves into production will be a key
near term focus for Range. This Project will result in the creation of
significant local work opportunities and skills development."
"It should also be noted that these new proven (P1) reserves are in addition to
the previously reported P1-P3 reserves and Prospective Resources inventory that
Range currently holds on its Trinidad assets, hence the enormous significance
and value that these reserves on the Beach Marcelle Block represent".
Texas - North Chapman Ranch
Range and its partners are drilling ahead at approximately 12,700 ft. in the
Smith #2 well in North Chapman Ranch, after successfully setting intermediate
casing at 11,300 ft. Prior to reaching casing point, two zones of interest were
identified that may be tested at a later date. TD for the well is 14,000 ft. If
successful the Smith #2 well would increase Proved Reserves, production, and
cash flow from the field.
In addition to the Smith #2 well, site preparation is underway at the Albrecht
#1 well location. The Albrecht well is intended to more fully appraise the
North Chapman Ranch field, while testing additional, shallower objectives. The
well is expected to spud immediately after operations have been completed on
the Smith #2 well.
Texas - East Texas Cotton Valley
In the Company's East Texas Cotton Valley prospect, testing continues on the
Ross 3H horizontal well, as individual zones are perforated and swabbed in to
check fluid content prior to any hydraulic fracturing. The Ross 3H well was
drilled to a total measured depth of 8,500 ft. and showed good evidence of
reservoir quality rock and oil saturation while drilling.
Georgia
Operations are currently suspended on the Mukhiani well with the rig on standby
with a skeleton crew as the Company awaits final technical analysis on the
well. The Company will provide an update as to the results as soon as they are
finalised, which is expected shortly. If a decision to move is made, it is
expected the second well in the Georgian exploration program will spud within a
4-6 week period.
Puntland
Joint venture operator Horn Petroleum continues with significant set up
operations for the initial well in the proposed two well programme in Puntland
and remains on track for spudding later this year.
Yours faithfully
Peter Landau
Executive Director
Ends
Contacts
Range Resources Limited
Peter Landau
Tel : +61 (8) 8 9488 5220
Em: plandau@rangeresources.com.au
Australia London
PPR Tavistock Communications
David Tasker Ed Portman/Paul Youens
Tel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7920 3150
Em: david.tasker@ppr.com.au Em: eportman@tavistock.co.uk
RFC Corporate Finance (Nominated Advisor) Old Park Lane Capital (Joint Broker)
Stuart Laing Michael Parnes
Tel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188
Panmure Gordon (Joint Broker)
Katherine Roe / Brett Jacobs
Tel: +44 (0) 207 459 3600
Range Background
Range Resources Limited is a dual listed (ASX: RRS; AIM: RRL) 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 gross recoverable
3P reserves in place of 6.9 MMbls (on a mean 100% basis) with an additional
20 MMbls 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. Currently, Range has
recently completed a 410km 2D seismic program with independent consultants
RPS Energy identifying 68 potential structures containing an estimated 2
billion barrels of oil-in-place (on a mean 100% basis) with the first of
two exploration wells having spudded in July in 2011.
* In Puntland, Range holds a 20% working interest in two licences
encompassing the highly prospective Dharoor and Nugaal valleys with the
operator and 45% interest holder, Africa Oil Corp (TSXV: AOI) planning to
commence the two well programme in 2011 (targeting (on a mean 100% basis)
300mmbls and 375mmbbls of best estimate gross recoverable oil in place)
following the recent awarding of the rig contract.
* Range holds a 25% interest in the initial Smith #1 well and 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. Drilling of the first well has
resulted in a commercial discovery with independently assessed gross
recoverable reserves in place (on a mean 100% basis) of 240 Bcf of natural gas, 18 mmbbls
of oil and 17 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.
Independently assessed gross recoverable reserves in place (on a mean 100%
basis) of 5.4 mmbbls of oil.
The reserves estimate for the North Chapman Ranch Project and East Texas Cotton
Valley has been formulated by Lonquist & Co LLC who are Petroleum Consultants
based in the United States with offices in Houston and Austin. Lonquist
provides specific engineering services to the oil and gas exploration and
production industry, and consults on all aspects of petroleum geology and
engineering for both domestic and international projects and companies.
Lonquist & Co LLC have consented in writing to the reference to them in this
announcement and to the estimates of oil, natural gas and natural gas liquids
provided. These estimates were formulated in accordance with the guidelines of
the Society of Petroleum Engineers ("SPE"). The SPE Reserve definitions can be
found on the SPE website at spe.org.
The reserves estimates for the 3 Trinidad blocks referred above have been
formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA is an international
petroleum engineering and geologic consulting firm staffed by experienced
engineers and geologists. Collectively FGA staff has more than a century of
world-wide experience. FGA have consented in writing to the reference to them
in this announcement and to the estimates of oil and natural gas liquids
provided. The definitions for oil and gas reserves are in accordance with SEC
Regulation S-X.
RPS Group is an International Petroleum Consulting Firm with offices worldwide,
who specialise in the evaluation of resources, and have consented to the
information with regards to the Company's Georgian interests in the form and
context that they appear. These estimates were formulated in accordance with
the 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
Petrotrin makes no representation or warranty as to the adequacy or accuracy of
its contents and disclaims any liability that may arise because of reliance on
it.
Australia
Ground Floor, 1 Havelock Street, West Perth WA 6005, Australia
t: +61 8 9488 5220, f: +61 8 9324 2400
e: admin@rangeresources.com.au
London
5th Floor, 23 King Street, St. James House, London SW1 6QY
t: +44 207 389 0588, f: +44 207 930 2501
ABN 88 002 522 009
www.rangeresources.com.au
END
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