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Thursday, January 24, 2013 2:41:23 AM
RNS OUT
Hi Guys
Happy new year .. (sorry bit late)
24 January 2013
The Manager
Company Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
By e-lodgement
TRINIDAD UPDATE
Range Resources Limited ("Range" or "the Company") is pleased to announce the
following update with respect to the Company's Trinidad operations with the
following highlights:
- The QUN 139 well drilling ahead at 950 ft. with a revised target depth of 1,300
ft. having encountered approximately 80 ft. of good quality oil sands to 945 ft.;
- The QUN 135 well finds more than 80 ft. of oil pay and will be deepened after
indications of a possible new pay zone near TD;
- The Morne Diablo Waterflood programme is currently being simulated / modeled,
with completion estimated in February;
- The Beach Marcelle programme is looking to commence upon receipt of the
approvals to deepen six of the existing wells targeting production of 150-300
bopd per well; and
- The Company has received the final revised farm-out agreements that will see an
initial reduction in the enhanced royalty currently being paid by the Company.
The revised rates at 1,000 bopd will see net back prices increase to circa $40 /
barrel before tax and circa $50 / barrel before tax at 2,000 bopd.
Lower Forest Development Update
Development of the Lower Forest formation continues with the QUN 139 well
drilling ahead at 950 ft. with a revised target depth of 1,300 ft. having
encountered approximately 80 ft. of good quality oil sands to 945 ft. The QUN
139 location is contiguous to producing wells QUN 119 and QUN 129 which
achieved initial production rates of 129 bopd and 138 bopd, respectively. Both
wells still flow under natural pressure, with QUN 129 having now produced for
12 months since first production.
The QUN 140 well is expected to spud shortly, with the Company awaiting receipt
of necessary approvals. The well will be drilled to a target depth of
approximately 1,000 ft. The QUN 140 well is contiguous and up-dip to the
recently drilled QUN 138 well. As previously announced, the logging of the QUN
138 well indicated 100 ft of net oil sands across a number of horizons
including a highly resistive zone between 770 and 810 ft. The Company awaits
approvals which are anticipated shortly, with the production rig ready to move
immediately onto site, perforate the well, and place it into production.
Drilling Deeper Formations
The Company is pleased to report that after operational delays, the QUN 135 has
been successfully drilled to its planned total depth of 3,500 ft., with
indications that it may have penetrated a new Middle Cruse pay zone. Following
conditioning of the well bore, logging operations were initiated and more than
80 ft. of net oil pay was identified in the Lower Forest, Upper Cruse and Middle
Cruse formations. Based on oil shows while drilling and induction logs indicating
that the well reached its planned total depth in the top of a Middle Cruse oil
zone, the 135 well will now be deepened to confirm what may represent a
previously undiscovered reservoir in the Middle Cruse section. Following
deepening of the well and evaluation of open hole logs, the Company will
determine which of the multiple oil zones present is the best candidate for
initial completion.
In addition to the wells mentioned above, the Company is looking at re-entering
four Lower Forest wells that have experienced comingling of oil and water
sands. Remedial work will be performed on these wells with a small work-over
rig, with additional perforations to be added in two of the four wells. This
work is expected to improve the performance of these wells and add further to
production.
The MD 248 well has reached 4,000 ft. and will continue to drill towards the
target depth of 6,500 ft. to test the Lower Cruse formation. Following
equipment shortages that resulted in drilling delays, additional rig components
have been procured to reduce future downtime.
The previously drilled MD 19 well encountered well-developed Lower Cruse sands.
However, they were structurally low and water-saturated at that location.
Morne Diablo Waterflood Project
The shallow Forest water flood project on the Morne Diablo license is currently
being simulated / modeled, with completion estimated for mid-February followed
soon thereafter by a presentation and application for approval to the
regulatory authorities, with development still forecast to commence mid 2013.
Beach Marcelle License
The Company has finalised the Environmental Impact Assessment (EIA) to be
submitted to the Environmental Management Authority (EMA) in application for a
Certificate of Environmental Clearance (CEC) to drill up to 40 wells and
conduct the water flood program. It is anticipated the EMA will take
approximately two to three months to review and grant environmental approval.
Final approvals will then be sought from the regulatory authorities. Once all
permits and approvals are in place, Range will commence development, currently
forecast for mid-2013, after which the Company will look to commence
preparations for the 40 well work program and water flood.
The Company has also applied for a separate CEC to deepen six wells in the
Beach Marcelle license (without EIA) and anticipates that a favourable response
will be received soon. Following receipt of the CEC for the deepening of these
six wells, the Company will move one of the medium capability rigs to the Beach
Marcelle license to commence the drilling program.
The Company has recently received approval of a CEC on the Beach Marcelle
license (without EIA) to build a bio-remediation site, to aid in waste
management of the proposed drilling program. These bio-sites are present in all
Range fields and unique in allowing Range complete on-site control of the
drilling-remediation process.
2013 Outlook
Range is looking forward to a prospective and busy 2013 across the Company's
three onshore licenses. The Company is working towards having all six of its
drilling rigs running to increase production and cash flow, as well as
resolving the operational delays that have recently been experienced by
implementing processes and procedures across the board to minimise downtime.
With a track record of early drilling success, the Company remains focused on
maintaining the continuous drilling and completion operations required for
sustainable production growth.
Development of the Lower Forest formation on the Morne Diablo license will
continue, utilising the Company's shallower capacity rigs, with an inventory of
40+ wells still to be drilled. This shallow reservoir development is currently
self-funding, with revenue from pre-existing wells and the Lower Forest wells
drilled to date more than offsetting the capital required for these shallow
wells.
As mentioned above, work will commence on the Beach Marcelle block upon receipt
of the approved CEC with respect to the deepening of six existing wells. These
wells are to be drilled to depths between 3,000 and 4,000 ft., targeting the
prolific Gros Morne formation with historical wells having demonstrated initial
production in the range of 150-300 bopd.
Once all six rigs are operational, the Company will move one of the medium
capacity rigs to the South Quarry field to commence testing and development of
the shallow targets that have been identified on the license. The initial
shallow well program will involve the drilling of up to 10 wells and,
contingent upon the success of this program, development will continue in a
similar manner as the Lower Forest development.
In addition, following completion of the MD 248 well, the Company will spud the
first of a series of wells that will test the prolific Herrera formation as a
primary exploration target, with the Forest and Cruse formations as secondary
objectives.
Revised License Agreements
The Company has received the final revised agreements that will see an initial
reduction in the enhanced royalty currently being paid by the Company. The
revised terms will see an improvement in the net back per barrel of oil
produced. The revised royalty rates at production rates of 1,000 bopd will see
net backs increase to circa $40 / barrel before tax and circa $50 / barrel
before tax at 2,000 bopd - assuming $90 barrel oil and opex at similar levels.
Only minor administrative items relating to market communications remain to be
resolved.
In addition, discussions continue with the regulatory agencies and other
farm-in operators for further performance-based drilling and production
incentives. Updates will be provided upon progress when available.
Executive Director Peter Landau commented:
"There is no doubt that it has been a challenging few months given the
operational delays experienced in getting certain wells drilled in Trinidad and
the softening of the Company's share price. As we continue to address the
supply chain issues that resulted in those delays, it is important to remember
the key positives that will continue to underpin Range's performance moving
forward in the short to medium term.
Trinidad is fully funded through both existing facilities, the Texas sale and /
or other reserve based lending options that are available to the Company. The
work program will continue assummarisedabove and further capital will be
deployed to ensure operational delays moving forward are reduced significantly
with spare plant and equipment and an increased number of specialised personnel.
The revised fiscal terms will only serve to further benefit increased production
over the coming year as production ramp up moves into full swing.
With Range close to finalising the GIG joint venture in Georgia, the financial
and operational focus will be firmly placed on Trinidad and our target of 6,000
bopd by the second half of 2014 based on known PDP and PUD Reserves."
Yours faithfully
Peter Landau
Executive Director
Hi Guys
Happy new year .. (sorry bit late)
24 January 2013
The Manager
Company Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
By e-lodgement
TRINIDAD UPDATE
Range Resources Limited ("Range" or "the Company") is pleased to announce the
following update with respect to the Company's Trinidad operations with the
following highlights:
- The QUN 139 well drilling ahead at 950 ft. with a revised target depth of 1,300
ft. having encountered approximately 80 ft. of good quality oil sands to 945 ft.;
- The QUN 135 well finds more than 80 ft. of oil pay and will be deepened after
indications of a possible new pay zone near TD;
- The Morne Diablo Waterflood programme is currently being simulated / modeled,
with completion estimated in February;
- The Beach Marcelle programme is looking to commence upon receipt of the
approvals to deepen six of the existing wells targeting production of 150-300
bopd per well; and
- The Company has received the final revised farm-out agreements that will see an
initial reduction in the enhanced royalty currently being paid by the Company.
The revised rates at 1,000 bopd will see net back prices increase to circa $40 /
barrel before tax and circa $50 / barrel before tax at 2,000 bopd.
Lower Forest Development Update
Development of the Lower Forest formation continues with the QUN 139 well
drilling ahead at 950 ft. with a revised target depth of 1,300 ft. having
encountered approximately 80 ft. of good quality oil sands to 945 ft. The QUN
139 location is contiguous to producing wells QUN 119 and QUN 129 which
achieved initial production rates of 129 bopd and 138 bopd, respectively. Both
wells still flow under natural pressure, with QUN 129 having now produced for
12 months since first production.
The QUN 140 well is expected to spud shortly, with the Company awaiting receipt
of necessary approvals. The well will be drilled to a target depth of
approximately 1,000 ft. The QUN 140 well is contiguous and up-dip to the
recently drilled QUN 138 well. As previously announced, the logging of the QUN
138 well indicated 100 ft of net oil sands across a number of horizons
including a highly resistive zone between 770 and 810 ft. The Company awaits
approvals which are anticipated shortly, with the production rig ready to move
immediately onto site, perforate the well, and place it into production.
Drilling Deeper Formations
The Company is pleased to report that after operational delays, the QUN 135 has
been successfully drilled to its planned total depth of 3,500 ft., with
indications that it may have penetrated a new Middle Cruse pay zone. Following
conditioning of the well bore, logging operations were initiated and more than
80 ft. of net oil pay was identified in the Lower Forest, Upper Cruse and Middle
Cruse formations. Based on oil shows while drilling and induction logs indicating
that the well reached its planned total depth in the top of a Middle Cruse oil
zone, the 135 well will now be deepened to confirm what may represent a
previously undiscovered reservoir in the Middle Cruse section. Following
deepening of the well and evaluation of open hole logs, the Company will
determine which of the multiple oil zones present is the best candidate for
initial completion.
In addition to the wells mentioned above, the Company is looking at re-entering
four Lower Forest wells that have experienced comingling of oil and water
sands. Remedial work will be performed on these wells with a small work-over
rig, with additional perforations to be added in two of the four wells. This
work is expected to improve the performance of these wells and add further to
production.
The MD 248 well has reached 4,000 ft. and will continue to drill towards the
target depth of 6,500 ft. to test the Lower Cruse formation. Following
equipment shortages that resulted in drilling delays, additional rig components
have been procured to reduce future downtime.
The previously drilled MD 19 well encountered well-developed Lower Cruse sands.
However, they were structurally low and water-saturated at that location.
Morne Diablo Waterflood Project
The shallow Forest water flood project on the Morne Diablo license is currently
being simulated / modeled, with completion estimated for mid-February followed
soon thereafter by a presentation and application for approval to the
regulatory authorities, with development still forecast to commence mid 2013.
Beach Marcelle License
The Company has finalised the Environmental Impact Assessment (EIA) to be
submitted to the Environmental Management Authority (EMA) in application for a
Certificate of Environmental Clearance (CEC) to drill up to 40 wells and
conduct the water flood program. It is anticipated the EMA will take
approximately two to three months to review and grant environmental approval.
Final approvals will then be sought from the regulatory authorities. Once all
permits and approvals are in place, Range will commence development, currently
forecast for mid-2013, after which the Company will look to commence
preparations for the 40 well work program and water flood.
The Company has also applied for a separate CEC to deepen six wells in the
Beach Marcelle license (without EIA) and anticipates that a favourable response
will be received soon. Following receipt of the CEC for the deepening of these
six wells, the Company will move one of the medium capability rigs to the Beach
Marcelle license to commence the drilling program.
The Company has recently received approval of a CEC on the Beach Marcelle
license (without EIA) to build a bio-remediation site, to aid in waste
management of the proposed drilling program. These bio-sites are present in all
Range fields and unique in allowing Range complete on-site control of the
drilling-remediation process.
2013 Outlook
Range is looking forward to a prospective and busy 2013 across the Company's
three onshore licenses. The Company is working towards having all six of its
drilling rigs running to increase production and cash flow, as well as
resolving the operational delays that have recently been experienced by
implementing processes and procedures across the board to minimise downtime.
With a track record of early drilling success, the Company remains focused on
maintaining the continuous drilling and completion operations required for
sustainable production growth.
Development of the Lower Forest formation on the Morne Diablo license will
continue, utilising the Company's shallower capacity rigs, with an inventory of
40+ wells still to be drilled. This shallow reservoir development is currently
self-funding, with revenue from pre-existing wells and the Lower Forest wells
drilled to date more than offsetting the capital required for these shallow
wells.
As mentioned above, work will commence on the Beach Marcelle block upon receipt
of the approved CEC with respect to the deepening of six existing wells. These
wells are to be drilled to depths between 3,000 and 4,000 ft., targeting the
prolific Gros Morne formation with historical wells having demonstrated initial
production in the range of 150-300 bopd.
Once all six rigs are operational, the Company will move one of the medium
capacity rigs to the South Quarry field to commence testing and development of
the shallow targets that have been identified on the license. The initial
shallow well program will involve the drilling of up to 10 wells and,
contingent upon the success of this program, development will continue in a
similar manner as the Lower Forest development.
In addition, following completion of the MD 248 well, the Company will spud the
first of a series of wells that will test the prolific Herrera formation as a
primary exploration target, with the Forest and Cruse formations as secondary
objectives.
Revised License Agreements
The Company has received the final revised agreements that will see an initial
reduction in the enhanced royalty currently being paid by the Company. The
revised terms will see an improvement in the net back per barrel of oil
produced. The revised royalty rates at production rates of 1,000 bopd will see
net backs increase to circa $40 / barrel before tax and circa $50 / barrel
before tax at 2,000 bopd - assuming $90 barrel oil and opex at similar levels.
Only minor administrative items relating to market communications remain to be
resolved.
In addition, discussions continue with the regulatory agencies and other
farm-in operators for further performance-based drilling and production
incentives. Updates will be provided upon progress when available.
Executive Director Peter Landau commented:
"There is no doubt that it has been a challenging few months given the
operational delays experienced in getting certain wells drilled in Trinidad and
the softening of the Company's share price. As we continue to address the
supply chain issues that resulted in those delays, it is important to remember
the key positives that will continue to underpin Range's performance moving
forward in the short to medium term.
Trinidad is fully funded through both existing facilities, the Texas sale and /
or other reserve based lending options that are available to the Company. The
work program will continue assummarisedabove and further capital will be
deployed to ensure operational delays moving forward are reduced significantly
with spare plant and equipment and an increased number of specialised personnel.
The revised fiscal terms will only serve to further benefit increased production
over the coming year as production ramp up moves into full swing.
With Range close to finalising the GIG joint venture in Georgia, the financial
and operational focus will be firmly placed on Trinidad and our target of 6,000
bopd by the second half of 2014 based on known PDP and PUD Reserves."
Yours faithfully
Peter Landau
Executive Director
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