TIDMRRL
RNS Number : 3847D
Range Resources Limited
31 January 2018
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.
QUARTERLY ACTIVITIES REPORT
Range, an international oil and gas company with assets in
Trinidad and Indonesia, and an oilfield services business in
Trinidad, provides its quarterly activities report for the period
ended 31 December 2017.
During the quarter Range undertook significant investment in the
growth of its asset portfolio with completion of acquisitions in
Indonesia and Trinidad. This was achieved whilst also seeing a 9%
growth in oil production compared to the previous quarter.
PRODUCTION AND FINANCIAL SUMMARY
Key Performance December September Change %
Metrics Quarter Quarter
Q2 FY18 Q1 FY18
---------------------- ------ --------- ---------- ---------
Total oil production
(net to Range) bbl 58,034 53,304 9%
---------------------- ------ --------- ---------- ---------
Daily average
oil production
(net to Range) bopd 631 579 9%
---------------------- ------ --------- ---------- ---------
Receipt from sales
and debtors US$m 2.7 2.3 17%
---------------------- ------ --------- ---------- ---------
Capital expenditure US$m 1.0 1.1 (9%)
---------------------- ------ --------- ---------- ---------
Closing cash &
liquid assets* US$m 10.9 17.7 (38%)
---------------------- ------ --------- ---------- ---------
* This includes the cash on hand plus amount of immediately
refundable advance deposit paid in respect of RRDSL acquisition
CORPORATE
Admission to trading on Alternative Investment Market
("AIM")
During the quarter, the Company's ordinary shares were admitted
to trading on AIM effective 13 December 2017, under the ticker
"RRL". The Company published an admission document which can be
viewed on Range's website www.rangeresources.co.uk.
Completion of acquisition of oil and gas interests in
Indonesia
During the quarter, Range completed the acquisition of interests
in an established oil block in Indonesia. As per terms of the
acquisition, the Company has acquired an indirect 23% interest (to
increase to 42% upon completion of the minimum work programme) in
the Perlak field located in a mature hydrocarbon province of
Northeast Sumatra. Please refer to Operations section below for
further details on the project.
Completion of acquisition of Range Resources Drilling Services
Limited ("RRDSL")
Following shareholder approval at the General Meeting of the
Company held on 30 November 2017, the acquisition of RRDSL
completed during the quarter. RRDSL is an established oilfield
services provider with successful track record of operations for
almost 15 years. RRDSL's assets are capable of supporting a wide
variety of oilfield operations and benefit from one of the most
modern rig fleets across the Caribbean.
RRDSL has been providing all of Range's oilfield services in
Trinidad, including drilling, waterflood and workovers since 2003.
The acquisition is expected to reduce the operating costs
associated with Range's upstream operations in Trinidad and provide
substantial operational flexibility.
Range's objective is to increase upon the existing levels of
business with other operators to provide additional revenue stream.
The longer-term goal of the Company is to establish RRDSL as a
profitable oilfield services company, providing operations to a
wide range of counterparties in the Caribbean and Latin America.
Further information on RRDSL and its services can be found on the
website: www.rangedrilling.com.
During the quarter, Range advanced a partial payment of US$2.8
million to LandOcean Petroleum Corp. Ltd as part of the
consideration for the RRDSL acquisition. The payment is on a
refundable basis and the funds will be immediately repayable to
Range upon the Company's request. This early, refundable payment
will benefit Range as it will no longer have to pay the 6% interest
rate per annum accruing on the amount of consideration.
Termination of proposed acquisition of the West Coast assets
During the quarter, Range announced that the proposed
acquisition of the West Coast assets in Trinidad from Trinity
Exploration and Production plc had been terminated. The US$4.55
million deposit which was paid by Range upon execution of the sale
and purchase agreement was returned to Range during the
quarter.
OPERATIONS - TRINIDAD
Development drilling
Subsequent to the period end, Range announced that the GY 684
development well located at the Beach Marcelle field, which was
drilled in December 2017 was successfully brought into production
at a stabilised rate of 120 bopd on a restricted choke. The Company
is encouraged by the results from this well, which is one of the
best producing wells drilled by Range in recent years in Trinidad.
At the date of this publication, the well continues to flow at a
rate of approximately 100 bopd.
Waterflood update
Range's focus in Trinidad continues to be on the production
growth from its waterflood programme, with over 70% of total
reserves attributed to these projects - approximately 11 MMstb of
2P reserves.
Production from the waterflood programme has been increasing
over the last months, with approximately 36% of Range's average
production for the quarter attributed to waterflood.
During the period, production at the South East area of Beach
Marcelle field continued at an average rate of 190 bopd. Production
from Range's second waterflood programme at the Morne Diablo field
continued at an average rate of 40 bopd.
At the South East area of Beach Marcelle field, the Company
completed the construction of a pipeline to connect to additional
water supply which has the potential to increase the injection rate
by additional 700 bwpd. Transfer of this additional water source
has been temporarily suspended, pending installation of a new
pump.
Workovers
The Company continues to undertake workovers on the existing
wells to provide additional production. 66 workovers have been
completed during the period.
Publication of a Competent Person's Report ("CPR")
During the period, the Company published the CPR on its Trinidad
assets completed by the independent consultants Rockflow Resources
Ltd. The CPR confirmed net 2P reserves of 16 MMstb and net 2C
contingent resources of 8 MMstb. A copy of the CPR is available on
Range's website:
http://www.rangeresources.co.uk/operations/reserves-and-resources/.
OPERATIONS - INDONESIA
Following completion of the acquisition of interests in the
Perlak field on 30 October 2017, the Company has commenced the
initial geological and geophysical studies which form part of the
agreed minimum work programme obligation ("MWO"). The MWO covers a
3-year period and in addition to studies includes well surveying,
well workovers, and drilling of one new well.
The planned work programme is aimed at re-initiating production
from the existing wells, firming up the field development plan, and
fully exploiting the potential resources.
The Perlak field is one of the oldest producing fields in the
world, first discovered in 1899 and lies on-trend with many
producing hydrocarbon fields, including the giant Arun field. The
field was produced primarily in the period up to the early 1940s
and there has been limited activity carried out since that time.
Approximately 50 mmbbls have been produced to date from shallow
depths of less than 3,300 feet of very light oil with average API
of 45-50 degrees.
Publication of a CPR
During the period, the Company published an independent CPR on
the Perlak field completed by LEAP Energy Partners Sdn Bhd. The CPR
estimates net (based on Range's initial 23% interest) 2C contingent
resources of 10.9 Bscf and 3.1 MMstb. A copy of the CPR is
available on Range's website:
http://www.rangeresources.co.uk/operations/reserves-and-resources/.
Work programme for 2018
The Company is in the process of finalising budget and work
programme. Once finalised, Range will be publishing its
consolidated work programme for both Trinidad and Indonesia.
Petroleum tenements held at the end of the quarter (Appendix
A)
Tenement Reference Location Working Interest Operator
======================= ========= ================ ================
Morne Diablo Trinidad 100% Range
======================= ========= ================ ================
South Quarry Trinidad 100% Range
======================= ========= ================ ================
Beach Marcelle Trinidad 100% Range
======================= ========= ================ ================
St Mary's Trinidad 80% Range
======================= ========= ================ ================
Guayaguayare Shallow(1) Trinidad 65% Range
======================= ========= ================ ================
Guayaguayare Deep(1) Trinidad 80% Range
======================= ========= ================ ================
Perlak(2) Indonesia 23% Aceh Timur Kawai
Energi
======================= ========= ================ ================
Notes:
1. The Production Sharing Contracts relating to Guayaguayare
expired in 2015. Any renewal will be subject (inter alia) to
government and other regulatory approvals.
2. Range's indirect interest in the Perlak field is held through
its 60% shareholding in Hengtai, which holds a 78% interest in
Lukar which in turn holds a 49% interest in Aceh Timur Kawai
Energi.
Competent Person statement
The information contained in this announcement has been reviewed
and approved by Mr Lijun Xiu. Mr Xiu is a suitably qualified person
with over 30 years' experience in assessing hydrocarbon reserves,
and holds a Bachelor degree in Geological Prospecting. In addition,
he holds a number of professional titles, including Reserves
Evaluation Specialist from the Ministry of Land and Resources of
the People's Republic of China. Mr Xiu is a member of the SPE
(Society of Petroleum Engineers). Mr Xiu holds a role of a Vice
President of Operations and Production with the Company.
The reserves stated in this announcement are prepared in
accordance with the definitions and guidelines of the SPE Petroleum
Resources Management System (SPE-PRMS). The reserve figures for
Trinidad are reported net, including the volumes in respect of the
notional over-riding royalty, which is paid in the form of a tax to
Petrotrin. The reference point is defined as the point of sale
volumes.
The reserve and resource estimates were calculated using both
the deterministic and probabilistic methods.
Note relating to statutory disclosure of significant
shareholdings
Statutory disclosure of significant shareholdings (as defined in
the AIM Rules) is different for Australian companies and may not
always ensure compliance with the requirements of Rule 17 of the
Aim Rules. All shareholders who are holding (directly or
indirectly), 3% or more of the issued and outstanding Ordinary
Shares are requested to notify the Company without delay of any
changes to their holding which increase or decrease such holding
through any single percentage. Likewise, shareholders who acquire
3% or more of the issued and outstanding Ordinary Shares are
requested to notify the Company without delay.
Glossary
Bbl - barrel
Bopd - barrels of oil per day
Bscf - billion of standard cubic feet of gas
Bwpd - barrels of water per day
Mmbbls - million barrels of oil
MMstb - million stock-tank barrels of oil
2P - Proved plus Probable reserves. Probability of success
50%
2C - a best estimate category of Contingent Resources
Contact details
Cantor Fitzgerald Europe
Range Resources Limited (Nominated Advisor and
Evgenia Bezruchko (Group Corporate Broker)
Development Manager) David Porter (Corporate
e. admin@rangeresources.co.uk Finance)
t. +44 (0)20 3865 8430 t. +44 (0)20 7894 7000
Appendix 5B
Mining exploration entity and oil and gas exploration entity
quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97,
01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
-------------------------------------------
Range Resources Limited
-------------------------------------------
ABN Quarter ended ("current
quarter")
--------------- ------------------------
88 002 522 009 31 December 2017
--------------- ------------------------
Consolidated statement Current quarter Year to date
of cash flows $US'000
(6 months)
$US'000
--------------------------------------- ---------------- -------------
1. Cash flows from operating
activities
1.1 Receipts from customers 2,747 5,078
1.2 Payments for
(a) exploration & evaluation - -
(b) development (751) (1,722)
(c) production (201) (340)
(d) staff costs (634) (1,227)
(e) administration
and corporate costs (819) (1,057)
1.3 Dividends received - -
(see note 3)
1.4 Interest received 26 83
1.5 Interest and other - -
costs of finance paid
1.6 Income taxes paid/refunded (610) 791
1.7 Research and development - -
refunds
1.8 Other (provide details - -
if material)
---------------- -------------
Net cash from / (used
1.9 in) operating activities (242) 1,606
----- -------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire:
(a) property, plant
and equipment - -
(b) tenements (see - -
item 10)
(c) investments* (960) (1,600)
(d) other non-current - -
assets
2.2 Proceeds from the disposal
of:
(a) property, plant
and equipment - -
(b) tenements (see - -
item 10)
(c) investments - -
(d) other non-current - -
assets
Cash flows from loans
2.3 to other entities** (3,787) (4,808)
2.4 Dividends received - -
(see note 3)
Other (provide details
2.5 if material)*** (2,800) (2,800)
---------------- -------------
Net cash from / (used
2.6 in) investing activities (7,547) (9,208)
------- ------------------------------ ---------------- -------------
* Investments represent amounts paid for acquisition
of equity in Hengtai (Indonesia project).
** Loans to other entities are pre-acquisition
loans to RRDSL (US$3,095,000) and to Aceh Timur
Kawai Energi (US$691,000)
*** Refundable payment in advance for RRDSL
acquisition
------------------------------------------------------------------------
3. Cash flows from financing
activities
3.1 Proceeds from issues
of shares - -
3.2 Proceeds from issue - -
of convertible notes
3.3 Proceeds from exercise - -
of share options
3.4 Transaction costs related - -
to issues of shares,
convertible notes or
options
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings* (1,600) (1,600)
3.7 Transaction costs related - -
to loans and borrowings
3.8 Dividends paid - -
3.9 Other (provide details - -
if material)
---------------- -------------
Net cash from / (used
3.10 in) financing activities (1,600) (1,600)
------- ------------------------------ ---------------- -------------
*Amount represents the yearly interest paid
on the US$20,000,000 convertible loan facility.
------------------------------------------------------------------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 17,662 17,458
Net cash from / (used
in) operating activities
4.2 (item 1.9 above) (242) 1,606
Net cash from / (used
in) investing activities
4.3 (item 2.6 above) (7,547) (9,208)
Net cash from / (used
in) financing activities
4.4 (item 3.10 above) (1,600) (1,600)
Effect of movement
in exchange rates on
4.5 cash held (133) (116)
---------------- -------------
Cash and cash equivalents
4.6 at end of period 8,140 8,140
------- ------------------------------ ---------------- -------------
5. Reconciliation of cash Current quarter Previous
and cash equivalents $US'000 quarter
at the end of the $US'000
quarter (as shown in
the consolidated statement
of cash flows) to the
related items in the
accounts
---- ---------------------------- ---------------- ---------
5.1 Bank balances 8,140 13,112
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other* - 4,550
---------------- ---------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 8,140 17,662
---- ---------------------------- ---------------- ---------
*Amount held in escrow account in the previous quarter has now
been released as the proposed acquisition of the West Coast assets
in Trinidad has been terminated.
6. Payments to directors of the entity Current quarter
and their associates $US'000
----------------
Aggregate amount of payments to
these parties included in item
6.1 1.2 165
----------------
6.2 Aggregate amount of cash flow -
from loans to these parties included
in item 2.3
----------------
6.3 Include below any explanation necessary
to understand the transactions included
in items 6.1 and 6.2
---- --------------------------------------------------------
Directors' fees and Directors' consulting fees
--------------------------------------------------------------
7. Payments to related entities of Current quarter
the entity and their associates $US'000
----------------
7.1 Aggregate amount of payments to -
these parties included in item
1.2
----------------
7.2 Aggregate amount of cash flow -
from loans to these parties included
in item 2.3
----------------
7.3 Include below any explanation necessary
to understand the transactions included
in items 7.1 and 7.2
---- --------------------------------------------------------
-
--------------------------------------------------------------
8. Financing facilities Total facility Amount drawn
available amount at at quarter
Add notes as necessary quarter end end
for an understanding $US'000 $US'000
of the position
--------------- -------------
8.1 Loan facilities 20,000 20,000
--------------- -------------
8.2 Credit standby arrangements - -
--------------- -------------
8.3 Other (please specify) - -
--------------- -------------
8.4 Include below a description of each facility
above, including the lender, interest rate
and whether it is secured or unsecured.
If any additional facilities have been entered
into or are proposed to be entered into
after quarter end, include details of those
facilities as well.
---- ------------------------------------------------------------
The details of the US$20,000,000 convertible
loan facility are as follows:
Issuer: Range Resources Limited
------------------ ---------------------------------
Noteholder: LandOcean Energy Services Co.,
Ltd
------------------ ---------------------------------
Amount: US$20,000,000
------------------ ---------------------------------
Maturity 28 November 2019
Date:
------------------ ---------------------------------
Repayment: Bullet at maturity date
------------------ ---------------------------------
Interest: 8% per annum, payable annually
in arrears
------------------ ---------------------------------
Security: None
------------------ ---------------------------------
Conversion GBP0.0088 per share
Price:
------------------ ---------------------------------
Lender Conversion At any time, in a minimum amount
Right: of US$10,000,000
------------------ ---------------------------------
------------------------------------------------------------------
9. Estimated cash outflows $US'000
for next quarter
---- ------------------------------ --------
9.1 Exploration and evaluation -
9.2 Development 400
9.3 Production 700
9.4 Staff costs 1,100
Administration and corporate
9.5 costs 1,600
Other (provide details if
9.6 material)* 1,000
--------
9.7 Total estimated cash outflows 4,800
---- ------------------------------ --------
* 3(rd) tranche of acquisition payment for Hengtai
10. Changes in Tenement Nature of Interest Interest
tenements reference interest at beginning at end
(items 2.1(b) and location of quarter of quarter
and 2.2(b)
above)
----- ---------------------- -------------- ---------- -------------- ------------
10.1 Interests - - - -
in mining
tenements
and petroleum
tenements
lapsed, relinquished
or reduced
----- ---------------------- -------------- ---------- -------------- ------------
Interests
in mining
tenements
and petroleum
tenements Perlak
acquired Field,
10.2 or increased Indonesia - Nil 23%
----- ---------------------- -------------- ---------- -------------- ------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Sign here: Date: 31 January 2018
Director
Print name: Yan Liu
Notes
1. The quarterly report provides a basis for informing the
market how the entity's activities have been financed for the past
quarter and the effect on its cash position. An entity that wishes
to disclose additional information is encouraged to do so, in a
note or notes included in or attached to this report.
2. If this quarterly report has been prepared in accordance with
Australian Accounting Standards, the definitions in, and provisions
of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this
quarterly report has been prepared in accordance with other
accounting standards agreed by ASX pursuant to Listing Rule 19.11A,
the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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