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Additional Information

Market:	ASX / AIM
Sector:	Oil and Gas Exploration and Production
EPIC:	RRS
Latest Price:	7,265.00 (1.82% )
52-week High:	7,565.00
52-week Low:	4,425.00
Market Cap:	6,590.60M

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Range Resources Full Range Resources profile here

Range Resources Limited (“Range” or “the Company”) is both an ASX-listed (ASX: RRS) and AIM-listed (AIM: RRL) exploration and production Company, with its principal activities directed towards finding and delineating hydrocarbons in Puntland, Somalia; the Republic of Georgia, onshore Texas, USA and Trinidad.

With the planned onshore exploration drilling program in Puntland and Georgia coupled with the exploration and development programs in Texas and Trinidad, Range is well on its way to establish itself as a diversified international oil and gas exploration, development and production company with significant upside potential.

Range Resources and Leni Gas & Oil's Trinidad deal has benefits for both, says broker

Friday, January 27, 2012

Analyst Barney Gray at broker Old Park Lane Capital has called Range Resources (LON:RRL, ASX:RRS) and Leni Gas & Oil's (LON:LGO) Trinidad tie up, announced yesterday, "mutually beneficial".

The broker, which rates both stocks a 'buy', released notes on both companies following news they would jointly develop onshore oilfields on the island.

In a binding Heads of Agreement, both companies agreed to jointly develop Range's Beach Marcelle field and LGO's Goudron oil field, which lies immediately adjacent.

The deal will see Range taking a 50 per cent stake in the Goudron oilfield by spending US$8 million. LGO has an option to acquire a 15 per cent stake in the Beach Marcelle project by spending a maximum of US$7 million.

Range already owns a number of producing assets nearby and this tie-up gives it additional reserves and production growth in Trinidad, while LGO gets sufficient cash to buy out Goudron’s previous owner and take the project forward.

LGO's Goudron field was originally developed by Texaco and more than 150 wells have been drilled to date. The field holds 2P (proven and probable) reserves of 8 million barrels. However, P3 reserves are 21.8 million barrels representing significant upside, said Gray.

Meanwhile, the smaller Beach Marcelle licence contains proven (P1) reserves of 12.8 million barrels believed to be recoverable through secondary production techniques.

Range aims to start production from Beach Marcelle using water-flood techniques in 2013. It hopes the field will produce 5,000 barrels a day by 2015.

Gray said he believed the deal for Range was "very astute".

"In return for a 15 per cent interest in Beach Marcelle, which we believe is worth approximately US$38mln, Range’s eventual 50 per cent interest in Goudron is worth at least US$80 mln for the P2 reserves alone, more than offsetting a reduced interest in Beach Marcelle," he said.

For LGO, the Old Park Lane Capital analyst said it was a "great deal".

"For a modest sum, the company has secured an option to acquire an interest in Beach Marcelle at a significant discount to our valuation of the field," he pointed out.

The analyst added: "Aside from LGO’s assets in the US, Spain and southwest Trinidad, our preliminary estimates indicate that this deal could be worth over $103mln to LGO, equivalent to 4.5p per share on a fully diluted basis."

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