Australian-based oil and gas company Range Resources Limited has entered into a binding Heads of Agreement (HOA) to acquire through SOCA Petroleum (SOCA) its right to purchase a 100% interest in a Trinidad holding company whose two wholly owned subsidiaries hold production licences for three blocks in producing onshore oilfields in Trinidad together with a local drilling company.

The production acreage and operating wells cover the Morne Diablo, Beach Marcelle and South Quarry oilfields, with the total acreage covering 16,253 gross acres on the southern coast of onshore Trinidad. Current production from the fields is approximately 600 bopd, however Range believes a minimal work program could potentially lift production to more than 4,000 bopd within 36 months on the known reserves.

In addition to the holding company parent of two subsidiaries holding production licences for the onshore acreage, the proposed Range acquisition also includes a 100% interest in a wholly owned drilling company (located in Trinidad), which owns onshore drilling equipment and related facilities.

The Company is planning to use company-owned drilling rigs and equipment and, with cashflow from existing production supplemented by a well advanced financing facility (to be finalised) to fund its development and exploration program which aims to increase the production from 600 bopd to 4,000 bopd within 36 months from known reserves without taking into account any exploration upside.

In addition to the known reserves, significant potential exists in the deeper Herrera Formation (refer below). The Deeper Herrera Formation will be a primary target of future drilling using company-owned drilling rigs, which are capable of reaching the depth of these formations. Subject to the successful drill testing of this formation, the Company is ultimately targeting an increase in the production level to between 8,000 – 10,000 bopd.

Range’s Executive Director, Peter Landau commented today, “With the recent strength and growth in Range’s asset base and market capitalisation, the 100% acquisition represents an incredible opportunity to compliment Range’s asset base of good value exposure to early stage, low risk production / mature exploration opportunities whilst retaining significant exposure to considerable measurable exploration upside.”

“Onshore Trinidad is a low cost, high operating margin environment with oil production sold at the wellhead and transported to the Pointe-a-Pierre Refinery, which has capacity for all additional planned production.”

“The Company believes that there is significant potential for value enhancement given the known management team and will target (subject to exploration success) an ultimate production profile of up to 10,000 bopd over the next 2-3 years ,” he added.

Tags: Range Resources Limited