www.australianinvestor.com.au/magazine.aspx?id=3205Range Resources Limited Will Raise $7 Million to Fund Significant Oil and Gas Opportunities in Puntland, Georgia (Eastern Europe) and Texas, First Production and Sales Targeted This Month.
ASX listed company Range Resources Limited is primarily focused on the exploration and production of oil and gas in Puntland, Somalia; the Republic of Georgia, Eastern Europe and Texas, USA.
2010 will present the Company with a busy, but prosperous year. Range Resources will finish a seismic campaign in February on its two oil and gas blocks in Georgia, which span approximately 10% of the surface area of the country and look to present at least, 12 drillable targets to be confirmed by the current seismic campaign. It has also just been granted Parliamentary approval from the Puntland Government to allow Africa Oil (its joint venture partner) to commence drilling of the first exploration well in Puntland in over 16 years. Thirdly, Range Resources’ Smith
#1 Well in the North Chapman Ranch area of Texas has encountered commercial oil and gas flows, which will allow for production and sales this month.
Range Resources has a 50% interest in its projects in Georgia, a 20% interest in Puntland and a 25% interest in its Texas project.
In order to fund exploration initiatives on its oil and gas projects in each of the three countries, Range Resources has announced that it will undertake a non-renounceable entitlements issue (Rights Issue) to raise approximately $7 million, before expenses.
Under the terms of the Rights Issue, Shareholders will be entitled to acquire one new ordinary Range Share for every four existing Range Shares held at the record date, which is yet to be determined. The issue price is $0.05 per share. The Company is presently in final negotiations with a number of interested parties to have the Rights Issue fully underwritten.
Mr. Peter Landau, Executive Director of Range Resources Limited said the Company is preparing the necessary regulatory and compliance documentation and will provide an update once complete, along with a proposed timetable for the Rights Issue, “We are targeting the commencement of the Rights Issue for the third week of January 2010 with closure expected the second or third week of February,” he told the Australian Investor, “In 2010, the Company intends to participate in the drilling of at least four wells for gas and oil. We also will have convened production of our commercial discovery at the Smith
#1 well in Texas.”
A placement has also recently been completed to institutional and sophisticated investors to raise approximately $2 million through the issue of 40 million shares to provide immediate finance to expedite development of the projects in Georgia and Texas.
Mr. Landau said its successful drilling of the Smith
#1 Well in late December 2009 highlighted a significant transition for the Company, “Not only are we an exploration company, but we can now also call ourselves an oil and gas producer. The commercial discovery at the Smith
#1 Well in Texas has indicated substantial potential, with a targeted production range of between 500 and 1000 barrels of oil as well as 8 to 12 million cubic feet of gas per day.
“The Smith
#1 Well will provide immediate cash flow for Range Resources.”
The Smith
#1 Well was drilled and logged to a depth of 4,260 metres. An interval in one of three zones was perforated with a bottom-hole pressure estimated to be approximately 11,650 psi. The well was unloaded on a 6/64” choke until gas reached the surface, and subsequently opened to a 10/64” choke for five hours to clean the well up. Despite the small choke size, the average rate during this period was 2.4 million cubic feet of gas and 191 barrels of oil per day with no water. Final casing pressure was 6,354 psi. The well was shut in with a final measured casing pressure of over 9,000 psi.
Mr. Landau said further results from the Smith
#1 Well will be released shortly, “The next available results will be the commercial flow rates for the well which is expected to be finalised by the end of January. We will have a better idea of the well’s reservoir size as well. Sales will be delivered by the end of January.”
He credited the Company’s consultants and good timing for the commercial discovery in Texas and progress in Puntland and Georgia.
Looking to the future, Mr. Landau concluded, “Our main priority is to commence drilling in Puntland, this has always been the Company’s goal, given the potential size of the Puntland oil basins,” he told the Australian Investor, “With Range scheduled to participate in at least four wells this year 2010 is shaping up to be a milestone year for the Company.”
January 2010
