13 February 2013
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
Range Resources Limited ("Range" or the "Company") is pleased to
announce the following update with respect to its recent investment in
Citation Resources Limited ("Citation") - 19.9% interest in Citation and 10%
at project level - regarding the Atzam #4 Well update released by Citation
- Testing continuing on Lower C17/Upper C18 carbonate sections -
perforated zones cleaning up with increasing recoveries of oil;
- High quality oil (37.0° API) recovered during testing operations;
- Estimated flow rates of 300-400 bbl/day with an 85-90% oil cut from
Lower C17/Upper C18 carbonates with an operational submersible pump,
based on results to date;
- Upper C18 carbonates displayed impressive log results with permeability
averaging 300 md and porosity averaging 17% - Rubelsanto Field
(+30mmbbl produced) is 100md and 3-6% porosity; and
- Significant moveable oil identified in electric logs over C13 and C14
carbonate sections still untested- remain behind pipe above the current
perforated Lower C17/Upper C18 sections.
Flow testing operations on the perforated Lower C17/Upper C18
carbonate sections in the Atzam #4 well are continuing, with encouraging
results from the well having been received over the past two weeks. Latin
American Resources Ltd, Operator of the Atzam Oil Project in Guatemala, has
continued swabbing the well to recover the drilling and perforation fluids
and establish the commercial potential of the perforated Lower C17/Upper C18
The Operator is now arranging to use an Electrical Submersible Pump
("ESP") to help fast track the finalisation of the clean-up operations and
establish the commercial potential of these perforated zones. The Operator
estimates that, with an ESP operational and based on the results to date from
the perforated Lower C17/Upper C18 carbonates, the potential flow rate will be
approximately 300-400 bbl/ day with an 85-90% oil cut. It is estimated that
approximately 50% of the total drilling and perforation fluids used in the
operations have now been recovered.
The ESP is currently being sourced from the United States and the Operator
expects that it should be landed on site and operational in two to three
The recovery of high quality (37.0° API) oil from recent swabbing of the
perforated Upper C18 sections, with continued pressure build ups prior to
commencement of acid wash operations, is considered very encouraging by the
Operator for the potential of this section. Due to the heavy muds used whilst
drilling (10.5 lb/gallon) and high permeability of these
carbonates, there were significant mud losses into the Upper C18 section
whilst drilling, which required the acid wash to establish a clear oil cut and
flow rates from these zones.
Testing Highly Prospective C13 and C14 Carbonates in Atzam #4
The Atzam #4 well produced very encouraging, and unexpectedly strong, oil
shows during the drilling of the well through the C13 and C14 carbonates,
which was complemented by higher than expected permeability and porosity
results from the electric logs. This has established these reservoir sections,
the main producing zones in the nearby Rubelsanto Field, as the most likely
appraisal targets to be tested in the upcoming Atzam #5 appraisal well if they
are not tested in the current Atzam #4 well.
Both Latin American Resources and Schlumberger are highly encouraged by the
logging results seen in the C13 and 14 carbonates and their potential to be a
new commercially productive zone in the Atzam Field to the primary C18 and C19
The Rubelsanto Field has produced over 30 mmbbl to date from eight wells and
is located only 17km to the north east of the Atzam Field, along a structural
Atzam and Tortugas Fields
The primary producing formations on the Atzam structure are the C18 through
C19 formations. The Atzam #2 well had initial flow rates of 1,200 bbl/day of
34°API oil which led to new well designs for the Atzam #4 well. The second
well, Atzam #5, will spud following completion of a successful flow testing
program on the Atzam #4 well.
Recent mapping of the Atzam structure using existing data from previous
operators (Basic, Hispanoil) and MEM, and incorporating reservoir data
acquired since production initiated in December 2007, indicate the possibility
of a structure of comparable size and orientation to that of the existing
Rubelsanto field in Guatemala. To date, the Rubelsanto field has produced +30
mmbbl of oil since its discovery in 1976. The field currently continues to
produce +1,000 bbl/day, 36 years after its discovery.
In addition to the Atzam structures on Block 1-2005, the Tortugas structure is
a suspended oil field. Originally 17 wells on Tortugas salt dome were drilled
by Monsanto looking for sulphur. One well (T9B) had an oil blowout at approx.
1,500 ft. and most others had oil shows in multiple zones.
The Atzam and Tortugas Fields have had previous exploration and
development programs with old 2D seismic and previous production wells.
Range Resources Limited
Tel : +61 (8) 9488 5220
RFC Ambrian Limited (Nominated Advisor) Old Park Lane Capital (Joint
Stuart Laing Michael Parnes
Tel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188
Fox-Davies Capital Limited GMP Securities Europe LLP
Daniel Fox-Davies / Richard Hail James Pope / Chris Beltgens
Tel: +44 (0) 203 463 5000 Tel: +44 (0) 207 647 2800
Tel: +61 (8) 9388 0944
Dahlman Rose & Company (Principal American Liaison)
OTCQX International Market (U.S.)
Christopher Weekes / Stephen Nash
Tel: +1 (212)-372-5766
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% interest in holding companies with
three onshore production licenses and fully operational drilling subsidiary.
Independently assessed Proved (P1) reserves in place of 17.5 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% 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)
exploration well having spudded in July in 2011. The Company is focussing on
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
- In Puntland, Range holds a 20% working interest in two licenses
encompassing the highly prospective Dharoor and Nugaal valleys. The operator
and 60% interest holder, Horn Petroleum Corp. (TSXV:HRN) has completed two
exploration wells and will continue with a further seismic and well program
over the next 12-18 months.
- 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
oil and gas producing trends in the State of Texas. Independently assessed 3P
reserves in place (on a 100% basis) of 228 Bcf of natural gas, 18 mmbbls of
oil and 17 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.
prospect has independently assessed 3P reserves in place (on a 100% basis) of
3.3mmbbls of oil.
- Range is earning a 65% (option to move to 75%) 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%) in Citation Resources Limited
(ASX: CTR) which holds a 70% interest in Latin American Resources
(LAR). LAR holds an 80-100% 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 MMBBL (100% basis). Range also holds a 10%
interest in LAR.
Table of Reserves and Resources
Detailed below are the estimated reserves for the Range project
All figures in Gross Oil Reserves Net Attributable
Project 1P 2P 3P Interest 1P 2P 3P
Oil & NGL
Texas - NCR * 16.4 25.2 35.3 20-25% 2.2 3.4 4.8
Texas - ETCV 1.0 1.6 3.3 22% 0.2 0.3 0.6 Crest
Trinidad 17.5 20.2 25.2 100% 17.5 20.2 25.2
Guatemala ** 2.3** ** 21-24% ** 0.48-0.55** ** Latin
Total Oil & Liquids 34.9 47.0 63.8 19.9 21.3 28.9
Texas - NCR * 106.0 162.7 228 20-25% 11.7 18.1 25.4
Total Gas Reserves 106.0 162.7 228 11.7 18.1 25.4
* Reserves attributable to Range's interest in the North Chapman
Ranch asset, which are net of government and overriding royalties as described
in the Forrest Garb report.
** The reserves estimate for the Guatemalan Blocks in which LAR
(and CTR) have an interest in is as reported by CTR. CTR has not reported 1P
and 3P estimates, but Range is seeking such information from CTR for future
Detailed below are the estimated unrisked resources and oil-in-place
delineated across Range's portfolio of project interests.
All figures in Gross Oil Resources Net Attributable
Project Low Best/ High Interest Low Best/ High
Trinidad 8.1 40.5 81.0 100% 8.1 40.5 81.0
Total Prospective 8.1 40.5 81.0 8.1 40.5 81.0
Puntland - 16,000 - 20% - 3,200 - Horn
Georgia - 2,045 - 40% - 818 -
Strait Oil &
Colombia - 7.8 - 65-75% - 5.1 - 5.8 -
All of the technical information, including information in relation
to reserves and resources that is contained in this document has been reviewed
internally by the Company's technical consultant, Mr Mark Patterson. Mr
Patterson is a geophysicist who is a suitably qualified person with over 25
years' experience in assessing hydrocarbon reserves and has reviewed the
release and consents to the inclusion of the technical information.
The reserves estimate for the Guatemalan Blocks in which LAR (and CTR) have an
interest in is as reported by CTR. CTR has not reported 1P and 3P estimates,
but Range is seeking such information from CTR for future reporting purposes.
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 worldâ€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 Sâ€X an in accordance
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. -
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.
Reserve information on the Putumayo 1 Well published by Ecopetrol 1987.
SPE Definitions for Proved, Probable, Possible Reserves and
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
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.
1P refers to Proved Reserves, 2P refers to Proved plus Probable
Reserves and 3P refers to Proved plus Probable plus Possible 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
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.
-0- Feb/13/2013 09:03 GMT
Press spacebar to pause and continue. Press esc to stop.