TIDMRRL
RNS Number : 7202N
Range Resources Limited
11 August 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
ACQUISITION OF PRODUCING ASSETS IN TRINIDAD
Range is pleased to announce that it has entered into a binding
sale and purchase agreement (the "SPA") to acquire certain
producing assets from a wholly owned subsidiary of Trinity
Exploration and Production Plc ("Trinity") for a cash consideration
of US$4.55 million. Range will fund the acquisition from the
existing cash resources.
Pursuant to the acquisition, the Company will acquire a
significant interest in two offshore producing licences, Brighton
Marine ("BM") and Point Ligoure-Guapo Bay-Brighton Marine ("PGB")
(collectively the "West Coast Assets"). Both licences are located
offshore West Coast of Trinidad, with a combined current production
of approximately 200 bopd. Range will be the operator of both
blocks.
Acquisition highlights:
-- Increases the Company's current production in Trinidad by
approximately 33% to over 800 bopd;
-- Increases Range's footprint in Trinidad and provides
significant operational synergies with the Company's existing
operations;
-- Net 2P reserves of 2.6 mmbbls (as reported by Trinity at 31/12/2016);
-- The West Coast Assets are profitable at current production
levels and oil prices as a result of recent optimization and cost
reduction exercises undertaken by Trinity;
-- Located near to shore in easily-accessible shallow water,
with full infrastructure and facilities in place;
-- Significant potential to increase production through low risk
workovers of existing wells. Longer-term opportunities to grow
reserves and production through further development and exploration
activity;
-- Low per barrel acquisition cost of US$1.75 per 2P barrel;
-- High working interest: 100% for BM and 70% for PGB; and
-- Provides additional options and drill prospects for the RRDSL
drilling business which is being acquired by the Company.
Commenting on the acquisition Chairman, Kerry Gu said:
"We are extremely pleased to have agreed a second acquisition of
upstream assets this month. Expansion of our existing portfolio of
producing assets in Trinidad will not only provide additional
production, cashflows, reserves, drill targets and enhanced oil
recovery potential, but it is also expected to result in further
improvements to the cost structure across our Trinidad
business.
We see significant potential within the West Coast Assets to
grow production and believe that these assets are highly
complementary to our existing portfolio. We look forward to
welcoming the skilled West Coast operating team to Range."
Assets overview
The assets are located in shallow water, offshore West coast
Trinidad, a proven hydrocarbon basin with a world-class source
rock. The two producing properties cover an aggregate 8,500
hectares(2) (prior to a 50% acreage surrender on PGB which is
awaiting Ministry approval).
The BM field has been in production since the 1950's with over
60 mmbbls produced to date. The field is operated primarily via 9
unmanned, offshore platforms with all oil handling and sales
infrastructure in place onshore. The current PGB licence was
awarded to Trinity in 2012 but similarly to BM, the field overall
has a long history of production prior to that date from the
previous Pt.Ligoure licence.
The current combined production of the West Coast Assets is
approximately 200 bopd with last reported 2P reserves of 2.6
mmbbls. Following the acquisition, the Company currently intends to
carry out two well workovers on the BM field, which has the
potential to increase production by over 100 bopd.
Longer-term production growth could be achieved from continued
workovers, infrastructure works, infill drilling and a greenfield
development programme. Furthermore, there are potential
opportunities from enhanced oil recovery which may be considered in
the future to increase production and reserves. At PGB there is
also a heavy oil opportunity which has been previously tested at
over 300 bopd of production.
There are further opportunities that comprise exploration
prospects from the prolific Forest and Manzanilla reservoirs.
Exploration potential in the area has been evidenced by Petrotrin's
Jubilee field discovery in 2012, South East of Cluster 6-ALM 22
well, contiguous to the PGB licence area.
Key terms of the SPA
-- Range Resources Trinidad Limited (a wholly owned subsidiary
of Range), has entered into a binding SPA to acquire the West Coast
Assets from Oilbelt Services Limited (a wholly owned subsidiary of
Trinity), for a total cash consideration of US$4.55 million;
-- The total cash consideration will be placed into an escrow account until completion;
-- 12 employees from Trinity who currently operate the West
Coast Assets will be transferred to Range;
-- Completion of the acquisition is conditional (amongst other
things) upon a waiver of pre-emption rights by Petrotrin and
receipt of all necessary regulatory approvals from Petrotrin and
the Ministry of Energy and Energy Industries of Trinidad and Tobago
("MEEI"); and
-- Backstop date for completion is 30 November 2017 (or such
other date as mutually agreed by the parties).
Range currently anticipates that completion of the transaction
will occur during Q4 2017.
The Company will provide shareholders with an updated corporate
presentation during September 2017.
Glossary
"2P Reserves" are proven plus probable reserves with 50%
probability of being recovered.
"bopd" is barrels of oil produced per day
"mmbbls" million barrels
Competent Person statement
In accordance with AIM Rules, Guidance for Mining and Oil &
Gas Companies, the information contained in this announcement has
been reviewed and approved by Dr Douglas Field. Dr Field is a
petroleum and reservoir engineer who is a suitably qualified person
with over 30 years' experience in assessing hydrocarbon reserves,
and holds a PhD in Organic Chemistry. Dr Field is a member of the
SPE (Society of Petroleum Engineers) and the PESGB (Petroleum
Exploration Society of Great Britain). Dr Field holds a role of a
Chief Petroleum Engineer with the Company.
Reserves stated in this announcement are prepared in accordance
with SPE PRMS guidelines (Petroleum Resources Management System
2007 & Revisions).
Additional required information
As detailed in Trinity's announcement of today's date, Trinity
have notified the following information with respect to their
financial reporting: "the (audited) carrying book value of the
assets as at 31 December 2016 is made up of property plant and
equipment totaling US$1.6 million, and a net decommissioning
liability (using a decommissioning methodology specific to Trinity)
of US$3.5 million that combine to reflect a net negative carrying
value of US$1.9 million. The carrying value of the West Coast
Assets have been impaired by US$24.2 million over the three
financial years that ended on 31 December 2016, mainly due to a
reduction in 2P reserves following the significant oil price
decline. Losses (before taxes and any extraordinary items)
attributable to the West Coast Assets for the twelve month period
ended 31 December 2016 were US$2.1 million."
Range currently anticipates that the carrying value it will
ascribe to the West Coast Assets will be equal to the cash
consideration of US$4.55 million.
Contact details
Cantor Fitzgerald Europe
Range Resources Limited (Nominated Advisor and
Evgenia Bezruchko (Group Corporate Broker)
Development Manager) David Porter / Sarah
e. admin@rangeresources.co.uk Wharry (Corporate Finance)
t. +44 (0)20 3865 8430
t. +44 (0)20 7894 7000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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