Last update: 19-Dec-2013 4:37 am
Thursday, December 19, 2013
Trinidad & Tobago Guardian Online
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Range Resources investing US$70-US$100 mill in T&T
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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