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Range Resources sees losses narrow on back of sharp increase in revenues

The company achieved "significant operational and financial improvements" in the year to the end of June. On the downside, for various reasons the company has had to rescind its production guidance ranges for Trinidad and Indonesia
Trinidad flag
The upcoming work programme in Trinidad is principally focused on completing the upgrades to sales infrastructure at the Beach Marcelle field

Oil & gas producer Range Resources Limited (LON:RRL, ASX:RRS) saw revenues rise substantially in the year to the end of June from the year before.

Revenue from continuing operations shot up to US$13.06mln from US$8.44mln on the back of an increase in production from its assets in Trinidad. Net average production in Trinidad rose 25% year-on-year to 650 barrels of oil per day (BOPD). The realised oil price was 25% higher at US$55.40 a barrel from US$44.27 a barrel the previous year.

Range saw a 43% improvement in operating expenditure per barrel for Trinidad upstream operations to US$26 a barrel from US$46 a barrel the year before.

Earnings before interest, taxes, depreciation, amortisation and exploration narrowed to US$6.0mln from US$7.9mln the year before. The loss before tax was US$16.0mln, compared to US$48.1mln the previous year.

READ: Range Resources initiates water-flood programme aimed at expanding South East area of Beach Marcelle field

The company revealed that the infrastructure upgrade programme at the Beach Marcelle field is currently running behind schedule and it does not expect it to be fully completed until late this year or early in 2019.

As a result of the delays, Range no longer expects to achieve its previous target of 1,000 bopd by the end of 2018.

Once most of the upgrades are completed, the company can start drilling a new development well at the Beach Marcelle field (the GY684 400'NE well). Range has already commenced initial planning work for this well and received the relevant government approvals with the intention to commence drilling operations in December 2018. It is currently expected that the second development well will be drilled in 2019.

As part of the ongoing optimisation programme, the company will also be undertaking work-overs on around 50 wells.

In addition, Range is planning to undertake an expansion of the Beach Marcelle water-flood project to incorporate more producer and injector wells. The programme is expected to deliver enhanced production during early 2019. Data collection on some of the selected wells has already kicked off as part of the expansion programme.

In Indonesia, Range intends to undertake geological and geophysical studies to improve reservoir understanding and to assist in establishing a longer-term development plan for the field. Given that the results from the reactivation programme on two wells are below the original expectations, the company does not believe the previous production guidance from Indonesian project of 200 bopd (gross) by the end of 2018 is achievable.

READ: Range Resource updates on Perlak well programme

Rig contractor RRDSL, which Range acquired in May of last year, has got off to an encouraging start to the new financial year with third-party turnover, since the end of June, already in excess of the figure for the year to the end of June 2018.

Range said it is encouraged by the pipeline of drilling activity anticipated across both Trinidad and the wider Caribbean/Latin America region.

"After another busy period, it is our pleasure to be reporting on significant operational and financial improvements delivered by the team,” said Zhiwei Gu, the chairman of Range.

“Looking ahead, we remain focused on achieving long-term profitability and positive operating cash-flow through growth in revenues and production whilst maintaining a tight control over costs,” he added.

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