17 May 2012
The Manager Company Announcements Australian Securities Exchange Limited Level 6, 20 Bridge Street Sydney NSW 2000 By e-lodgement PUNTLAND DRILLING UPDATE
Range Resources Limited announces that drilling on the Shabeel-1 well on the Dharoor Block in Puntland, Somalia and has reached a total depth of 3,470 meters and has encountered metamorphic basement at a depth of 3,430 meters. Drilling has been suspended for future testing.
In addition to the previously announced 12 to 20 meter zone of significant hydrocarbon pay in the Upper Cretaceous Jesomma Formation, the well has encountered additional potential net pay sands in the Jurassic Adigrat Formation shows at a depth of 3,246 to 3,430 meters, several of which exhibited oil and gas shows. Petrophysical analysis of the well log data indicates up to 3 meters of potential hydrocarbon pay in several thin sand units. They are not considered to warrant testing at this time, but do further confirm the existence of a working petroleum system.
The rig will now move to the Shabeel North location which is 3.5km north of the current location with spudding scheduled for the first week of June 2012. The primary objective of this well will be to evaluate the Upper Cretaceous Jesomma Sands which appear to be oil bearing at the Shabeel location. Subsequent to the drilling of this well, it is the intention of the Company to return to the Shabeel well and test the Jesomma sands once the necessary testing equipment has been mobilized into the country.
Keith Hill, President and CEO of Africa Oil (controlling Company of Operator (60%), Horn Petroleum Corporation), commented, "We are very encouraged by the results of the Shabeel well which appears to have confirmed oil bearing sands in two zones. This has very positive implications for the prospectivity of the basin. We look forward to the results of the Shabeel North well and to testing the Jesomma sands to confirm the potential of the block."
Yours faithfully Peter Landau Executive Director Contacts Range Resources Limited Peter Landau Tel : +61 (8) 8 9488 5220 Em: plandau@rangeresources.com.au Australia London PPR Tavistock Communications David Tasker Ed Portman/Paul Youens Tel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7920 3150 Em: david.tasker@ppr.com.au Em: eportman@tavistock.co.uk RFC Ambrian Limited(Nominated Advisor) Old Park Lane Capital (Joint Broker) Stuart Laing Michael Parnes Tel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188 Panmure Gordon (Joint Broker) Katherine Roe / Brett Jacobs Tel: +44 (0) 207 459 3600
Range Background
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 and Trinidad.
* In Trinidad Range recently completed the acquisition of a 100% interest in
holding companies with three onshore production licenses and fully
operational drilling subsidiary. Independently assessed Proved (1P)
reserves in place of 15.4 MMbls with 19.6 MMbls of proved, probable and
possible (3P) reserves and an additional 20 MMbls (mean) of prospective
resources.
* In the Republic of Georgia, Range holds a 40% farm-in interest in onshore
blocks VIa and VIb, covering approx. 7,000sq.km. Range completed a 410km 2D
seismic program with independent consultants RPS Energy identifying 68
potential structures containing an estimated 2 billion barrels of
undiscovered oil-in-place (on a mean 100% basis) with the first
(Mukhiani-1) well drilled in Q4 2011. The Company is focusing on a revised
development strategy that will focus on low-cost, shallow appraisal
drilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli")
CBM deposit, which straddles the central sections of the Company's two
blocks.
* In Puntland, Range holds a 20% working interest in two licences
encompassing the highly prospective Dharoor and Nugaal valleys. The
operator and 60% interest holder, Horn Petroleum Corp. (TSXV: HRN) has spud
the first well in a two well programme in early 2012 targeting 300mmbls and
375mmbbls of best estimate Prospective Resources (100% basis). Site
construction has been completed on the second well with the setting of the
30 inch surface casing and the drilling of a 50 meter pilot hole in
readiness for spudding following the completion of the first well.
* Range holds a 25% interest in the initial Smith #1 well and a 20% interest
in further wells on the North Chapman Ranch project, Texas. 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 (on a 100% basis) of 242 Bcf of natural gas, 15 mmbbls of
oil and 19 mmbbls of natural gas liquids.
* Range holds a 21.75% 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 (on a 100% basis) of
3.3mmbbls of oil.The reserves estimates for the 3 Trinidad blocks and update reserves estimates for the North Chapman Ranch Project and East Texas Cotton Valley referred above have been formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA is an international petroleum engineering and geologic consulting firm staffed by experienced engineers and geologists. Collectively FGA staff has more than a century of world-wide experience. FGA have consented in writing to the reference to them in this announcement and to the estimates of oil and natural gas liquids provided. The definitions for oil and gas reserves are in accordance with SEC Regulation S-X an in accordance with the guidelines of the Society of Petroleum Engineers ("SPE"). The SPE Reserve definitions can be found on the SPE website at spe.org.
RPS Group is an International Petroleum Consulting Firm with offices worldwide, who specialise in the evaluation of resources, and have consented to the information with regards to the Company's Georgian interests in the form and context that they appear. These estimates were formulated in accordance with the guidelines of the Society of Petroleum Engineers ("SPE").
The prospective resource estimates for the two Dharoor Valley prospects are internal estimates reported by Africa Oil Corp, the operator of the joint venture, which are based on volumetric and related assessments by Gaffney, Cline & Associates.
In granting its consent to the public disclosure of this press release with respect to the Company's Trinidad operations, Petrotrin makes no representation or warranty as to the adequacy or accuracy of its contents and disclaims any liability that may arise because of reliance on it.
The Contingent Resource estimate for CBM gas at the Tkibuli project is sourced from the publically available references to a report by Advanced Resources International's ("ARI") report in 2009: CMM and CBM development in the Tkibuli-Shaori Region, Georgia. Advanced Resources International, Inc., 2009. Prepared for GIG/Saknakhshiri and U.S. Trade and Development Agency.- .globalmethane.org/documents/toolsres_coal_overview_ch13.pdf. Range's technical consultants have not yet reviewed the details of ARI's resource estimate and the reliability of this estimate and its compliance with the SPE reporting guidelines or other standard is uncertain. Range and its JV partners will be seeking to confirm this resource estimate, and seek to define reserves, through its appraisal program and review of historical data during the next 12 months.
SPE Definitions for Proved, Probable, Possible Reserves and Prospective Resources
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.
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.
