Aleem Khan

Range Re­sources, the oth­er Aus­tralian en­er­gy sec­tor op­er­a­tor quot­ed on the Lon­don Stock Ex­change (LSE) and the Aus­tralia Stock Ex­change (ASX), in­tends to in­vest be­tween US$70 and US$100 mil­lion and em­ploy 350 per­sons, Ex­ec­u­tive Di­rec­tor Pe­ter Lan­dau said in an e-mail in­ter­view with the Busi­ness Guardian on Sat­ur­day (Feb­ru­ary 23, 2013). The oth­er Aus­tralian op­er­a­tor here is BHP Bil­li­ton.

Re­spond­ing to the ques­tion of where does T&T fit in­to Range Re­sources' over­all busi­ness plan, Lan­dau said T&T is the "core fo­cus of Range's ac­tiv­i­ties mov­ing for­ward. With what we have seen on the hy­dro­car­bon po­ten­tial of our lease blocks, the re­sults of the wells drilled to date and the mea­sures be­ing tak­en by the min­istry and Petrotrin to im­prove op­er­at­ing ef­fi­cien­cies and drilling in­cen­tives we have tak­en the strate­gic view to make Trinidad the key as­set of Range's growth over the com­ing years."

Asked to quan­ti­fy his com­pa­ny's for­eign di­rect in­vest­ment (FDI), he said: "The range is be­tween US$70 mil­lion and US$100 mil­lion, fi­nanced from both new in­vest­ment and cash flow. Range has a 3-year drilling and wa­ter­flood pro­gram de­signed to get to 8,000 bar­rels of oil per day (bopd) through the con­ven­tion­al shal­low, mod­er­ate and deep­er struc­tures on our lease blocks, as well as 2 ad­vanced wa­ter­flood pro­grams." Range Re­sources cur­rent­ly em­ploys 260 per­sons but Lan­dau ex­pects that to be in­creas­ing to 350 in the fu­ture. Range al­so gives to schools and char­i­ta­ble caus­es in its fence­line com­mu­ni­ties where most of its em­ploy­ees live.

On his ex­pe­ri­ence as a for­eign di­rect in­vestor, Lan­dau said: "On the whole, the ex­pe­ri­ence has been good but, like with any coun­try we op­er­ate in, there is room for im­prove­ment. Im­por­tant­ly, Trinidad recog­nis­es this, and is work­ing close­ly with com­pa­nies like Range to iden­ti­fy and im­ple­ment changes to im­prove ef­fi­cien­cies and at­tract more in­vest­ment."

An­swer­ing a ques­tion about what T&T could do to im­prove, and at­tract more FDI, Lan­dau said T&T could "clar­i­fy reg­u­la­to­ry guide­lines and stream­line ap­proval process­es. When you are a com­pa­ny with 6 rigs want­i­ng to drill, there needs to be ef­fi­cient process­es in place to make it eas­i­er for com­pa­nies to de­ploy cap­i­tal and im­ple­ment their work pro­grammes which in turn has a pos­i­tive flow on, and mul­ti­pli­er ef­fect on lo­cal em­ploy­ment and the econ­o­my. Tax and roy­al­ty rates on pe­tro­le­um are not as com­pet­i­tive as with oth­er coun­tries, but very pos­i­tive mea­sures are be­ing tak­en by the gov­ern­ment to im­prove the fis­cal regime to en­sure com­pa­nies are in­cen­tivized to spend sig­nif­i­cant dol­lars on in­creas­ing pro­duc­tion." He said Range looks for­ward to the up­com­ing on­shore bid round in April for more prospects.

In its Op­er­a­tions Up­date be­fore the LSE, Range said it found suc­cess with four wells in its acreage. In the QUN 135 well, Range made a "dis­cov­ery of a new oil reser­voir in the Mid­dle Cruse for­ma­tion, in­di­cat­ing 50 feet of net oil pay at ap­prox­i­mate­ly 3,500 feet." Net oil pay is the tech­ni­cal term used in the in­dus­try to mean a quan­ti­ty of oil that can be mon­e­tised. The com­pa­ny al­so said its QUN 138 well was suc­cess­ful­ly drilled and put in­to pro­duc­tion with ini­tial rates (five day av­er­age) of ap­prox­i­mate­ly 85 bopd. Its QUN 139 well suc­cess­ful­ly reached re­vised tar­get depth of 1,300 feet and en­coun­tered to­tal of 70 feet of good qual­i­ty oil sands, and 190 feet of low­er re­sis­tive oil sands in the Low­er For­est for­ma­tion. The QUN 139 well lo­ca­tion is con­tigu­ous to pro­duc­ing wells QUN 119 and QUN 129 which achieved ini­tial pro­duc­tion rates of 129 bopd and 138 bopd, re­spec­tive­ly. Both wells still flow un­der nat­ur­al pres­sure, the com­pa­ny said. Wells QUN 129 and QUN 119 are cur­rent­ly pro­duc­ing 65 bopd and 45 bopd re­spec­tive­ly, with QUN 119 hav­ing now pro­duced for 12 months since first pro­duc­tion. Range said its QUN 133 well was per­fo­rat­ed and drilling will com­mence on QUN 140 and QUN 141 wells, all tar­get­ing the Low­er For­est For­ma­tion.

In ad­di­tion to the wells men­tioned above, the com­pa­ny is look­ing to com­mence re­me­di­al work on four wells that have ex­pe­ri­enced co-min­gling of oil and wa­ter sands. Re­me­di­al work will be per­formed on these wells with a small workover rig, with ad­di­tion­al per­fo­ra­tions to be added in two of the four wells. This work is ex­pect­ed to im­prove the per­for­mance of these wells and add fur­ther to pro­duc­tion. The re­pair or stim­u­la­tion of an ex­ist­ing pro­duc­tion well for the pur­pose of restor­ing, pro­long­ing or en­hanc­ing the pro­duc­tion of hy­dro­car­bons is known as a "workover" in the oil in­dus­try.

Ex­ec­u­tive Di­rec­tor Pe­ter Lan­dau com­ment­ed: "We are ex­treme­ly pleased with the re­sults of the on­go­ing drilling pro­gramme in Trinidad, and par­tic­u­lar­ly with the dis­cov­ery of new oil reser­voir. The QUN 135 well con­firms once again that the de­vel­op­ment po­ten­tial on Range's Trinidad blocks re­mains large­ly un­tapped. Once pro­duc­tion test­ing of this new zone is com­plete, we will make a de­ter­mi­na­tion as to how best to de­vel­op the reser­voir as part of our ex­pand­ing port­fo­lio of ex­plorato­ry, de­vel­op­ment, and sec­ondary re­cov­ery op­por­tu­ni­ties in Trinidad."

The oth­er Aus­tralian

Range Re­sources Lim­it­ed is a dual list­ed (ASX:RRS; AIM:RRL) oil & gas ex­plo­ration com­pa­ny with oil & gas in­ter­ests in the fron­tier state of Punt­land, So­ma­lia, the Re­pub­lic of Geor­gia, Texas, USA, Trinidad and Colom­bia. In Trinidad Range holds a 100 per cent in­ter­est in hold­ing com­pa­nies with three on­shore pro­duc­tion li­cens­es and ful­ly op­er­a­tional drilling sub­sidiary.

In­de­pen­dent­ly as­sessed Proved (P1) re­serves in place of 17.5 mil­lions bar­rels (MM­bls) with 25.2 MM­bls of proved, prob­a­ble and pos­si­ble (3P) re­serves and an ad­di­tion­al 81 MM­bls of un­risked best es­ti­mate prospec­tive re­sources.

In the Re­pub­lic of Geor­gia, Range holds a 40 per cent farm-in in­ter­est in on­shore blocks VIa and VIb, cov­er­ing ap­prox­i­mate­ly 7,000 square kilo­me­ters (km2). Range com­plet­ed a 410-kilo­me­ter two-di­men­sion­al (2D) seis­mic pro­gramme with in­de­pen­dent con­sul­tants RPS En­er­gy iden­ti­fy­ing 68 po­ten­tial struc­tures con­tain­ing an es­ti­mat­ed 2 bil­lion bar­rels of undis­cov­ered oil-in-place with the first ex­plo­ration well (Mukhi­ani-1) hav­ing spud­ded in Ju­ly in 2011. The Com­pa­ny is fo­cussing on a re­vised de­vel­op­ment strat­e­gy that will fo­cus on low-cost, shal­low ap­praisal drilling of the con­tin­gent re­sources around the Tk­ibu­li-Shaori ("Tk­ibu­li") coal de­posit, which strad­dles the cen­tral sec­tions of the Com­pa­ny's two blocks.

In Punt­land, Range holds a 20 per cent work­ing in­ter­est in two li­cens­es en­com­pass­ing the high­ly prospec­tive Dha­roor and Nu­gaal val­leys. The op­er­a­tor and 60 per cent in­ter­est hold­er, Horn Pe­tro­le­um Cor­po­ra­tion quot­ed on Toron­to's ju­nior stock ex­change (TSXV:HRN), has com­plet­ed two ex­plo­ration wells and will con­tin­ue with a fur­ther seis­mic and well pro­gramme over the next 12-18 months.

Range holds a 25 per cent in­ter­est in the ini­tial Smith #1 well and a 20 per cent in­ter­est in fur­ther wells on the North Chap­man Ranch project in Texas in the Unit­ed States of Amer­i­ca (USA). The project area en­com­pass­es ap­prox­i­mate­ly 1,680 acres in one of the most pro­lif­ic oil and gas pro­duc­ing trends in the State of Texas. In­de­pen­dent­ly as­sessed 3P re­serves in place of 228 bil­lion cu­bic feet (Bcf) of nat­ur­al gas, 18 MM­bls of oil and 17 MM­bls of nat­ur­al gas liq­uids. 1P refers to Proved Re­serves, 2P refers to Proved plus Prob­a­ble Re­serves and 3P refers to Proved plus Prob­a­ble plus Pos­si­ble Re­serves. Proved Re­serves are those quan­ti­ties of pe­tro­le­um, which by analy­sis of geo­science and en­gi­neer­ing da­ta, can be es­ti­mat­ed with rea­son­able cer­tain­ty to be com­mer­cial­ly re­cov­er­able, from a giv­en date for­ward, from known reser­voirs and un­der de­fined eco­nom­ic con­di­tions, op­er­at­ing meth­ods, and gov­ern­ment reg­u­la­tions. Prob­a­ble Re­serves are those ad­di­tion­al Re­serves which analy­sis of geo­science and en­gi­neer­ing da­ta in­di­cate are less like­ly to be re­cov­ered than Proved Re­serves but more cer­tain to be re­cov­ered than Pos­si­ble Re­serves. Pos­si­ble Re­serves are those ad­di­tion­al re­serves which analy­sis of geo­science and en­gi­neer­ing da­ta in­di­cate are less like­ly to be re­cov­er­able than Prob­a­ble Re­serves.

Range holds a 21.75 per cent in­ter­est in the East Texas Cot­ton Val­ley Prospect in Red Riv­er Coun­ty, Texas, USA, where the prospect's project area en­com­pass­es ap­prox­i­mate­ly 1,570 acres en­com­pass­ing a re­cent oil dis­cov­ery. The prospect has in­de­pen­dent­ly as­sessed 3P re­serves in place of 3.3 MM­bls of oil.

Range is earn­ing a 65 per cent in­ter­est in the high­ly prospec­tive PUT 6 and PUT 7 li­cences in Pu­tu­mayo Basin in South­ern

Colom­bia. The com­pa­ny will un­der­take a 350km2 3D seis­mic pro­gram across the two li­cences and drill one well per li­cence, as well as look­ing to re-en­ter a pre­vi­ous­ly sus­pend­ed well that had a sig­nif­i­cant his­tor­i­cal re­serve es­ti­mate.

Range has tak­en a strate­gic stake (19.9 per cent) in Ci­ta­tion Re­sources Lim­it­ed, quot­ed in the ASX as CTR, which holds a 70 per cent in­ter­est in Latin Amer­i­can Re­sources (LAR). LAR holds an 80-100 per cent in­ter­est in two oil and gas de­vel­op­ment and ex­plo­ration blocks in Guatemala with Cana­di­an NI 51-101 cer­ti­fied proved plus prob­a­ble (2P) re­serves of 2.3 MM­bls. Range al­so holds a 10 per cent in­ter­est in LAR.

Prospec­tive Re­sources are those quan­ti­ties of pe­tro­le­um es­ti­mat­ed, as of a giv­en date, to be po­ten­tial­ly re­cov­er­able from undis­cov­ered ac­cu­mu­la­tions by ap­pli­ca­tion of fu­ture de­vel­op­ment projects. Prospec­tive Re­sources have both an as­so­ci­at­ed chance of dis­cov­ery and a chance of de­vel­op­ment. Prospec­tive Re­sources are fur­ther sub­di­vid­ed in ac­cor­dance with the lev­el of cer­tain­ty as­so­ci­at­ed with re­cov­er­able es­ti­mates as­sum­ing their dis­cov­ery and de­vel­op­ment and may be sub-clas­si­fied based on project ma­tu­ri­ty.

Con­tin­gent Re­sources are those quan­ti­ties of hy­dro­car­bons which are es­ti­mat­ed, on a giv­en date, to be po­ten­tial­ly re­cov­er­able from known ac­cu­mu­la­tions, but which are not cur­rent­ly con­sid­ered to be com­mer­cial­ly re­cov­er­able.

Undis­cov­ered Oil-In-Place is that quan­ti­ty of oil which is es­ti­mat­ed, on a giv­en date, to be con­tained in ac­cu­mu­la­tions yet to be dis­cov­ered. The es­ti­mat­ed po­ten­tial­ly re­cov­er­able por­tion of such ac­cu­mu­la­tions is clas­si­fied as Prospec­tive Re­sources, as de­fined above.

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