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 reports successful well test on Morne Diablo, Trinidad - UPDATE
--- adds broker comment and share price ---
Range Resources (LON:RRL, ASX:RRS) reported a successful production test of a well on the Morne Diablo concession in onshore Trinidad as it continues to ramp up production there and prepares for exploring deeper targets on the acreage.
It also reported good progress at the North Chapman Ranch and East Texas Cotton Valley projects in Texas.
By 1.35 pm, the stock was trading up 2.3 percent at 11.25 pence.
In an operations update, the company said initial production testing of the QUN118ST well at Morne Diablo has seen production at a rate of up to 102 barrels of oil per day under natural pressure from the shallow Forrest formation. It has stabilized at approximately 84 bopd.
This follows the recent successful test of QUN116ST which is currently producing 30 bopd under natural pressure. It is planned to put the well on pump to increase the production rate to around 50 bopd.
The same is planned for the QUN 117 well, which is forecast to produce upwards of 50 bopd.
Rig 2 has moved to the QUN 119 location where it is drilling nearly halfway to the planned depth of 2,400 feet, targeting the Upper Cruse and Lower Forest Sands.
Well logs from the Lower Forest interval are indicating approximately 280 ft of good oil sands, results which Range called “extremely encouraging” as indications are that the multi zone producing trends previously encountered in the QUN 117 well appear to continue.
Rig 5 will drill its first well, QUN 120, targeting the Lower Forest Sands in the coming weeks.
Rig 8 currently awaits regulatory inspection which is expected shortly and will be targeting the deeper Middle and Lower Cruse formations, whilst Rig 1 is shortly expected to receive spares that put it back into operation on Morne Diablo.
Range plans to explore the licence for deeper targets this year, following reprocessing and interpretation of the 3D seismic database, which is scheduled to be completed early or mid-February.
Old Park Lane Capital analyst Barney Gray commented on today’s news, saying Range’s completed wells on Morne Diablo are delivering production in excess of expectations. “With a total of four rigs expected to be available to the company very shortly, we anticipate that the drilling programme will accelerate significantly over the next three months,” said Gray.
Range holds three onshore licences in Trinidad: Morne Diablo, South Quarry and Beach Marcelle. Earlier this week it announced a tie-up with Leni Gas & Oil (LON:LGO) under which LGO gets an option to take a 15 per cent stake in Beach Marcelle and Range receives 50 per cent of LGO’s Goudron oilfield on the island.
On North Chapman, where Range has 25 per cent interest in the Smith No. 1 well and 20 per cent interest in subsequent wells, the Albrecht-1 well is drilling ahead just above the Anderson Formation, approximately 3,000 feet from the 14,500 feet target depth.
If productive, the formation could add significant reserves to those of the Howell Hight formation, the primary field pay at North Chapman Ranch.
Completion work continued on the Smith-2 well, which is scheduled for fracture stimulation early next month, along with first production and sales.
A successful Albrecht-1 could support a re-classification of current Possible (P3) reserves into the Probable (P2) and Proved (P1) categories, the company said.
Following on from the Albrecht-1 well, Range and joint venture partner Crest Resources have the option to continue with the development of the field with a possible four-well program in 2012.
Old Park Lane’s Gray said any reserve upgrade will significantly enhance the value of Range’s interest “at which point we believe the company will make a decision whether to participate in a further four well development programme or crystallise the value of its interest in 2012.”
On the East Texas Cotton Valley prospect, where Range holds 21.75 per cent, operator Crest Resources has received approval from the partners for fracture stimulation of the Ross 3H horizontal well.
Fraccing and testing is scheduled for the current quarter is expected to confirm commerciality of this shallow oil field.
