A diversified scope of assets is what puts the range in Range Resources. Both an ASX-listed (ASX: RRS RRSOA) and AIM-listed (AIM: RRL) exploration company, its principal activity is directed towards finding and delineating natural resources in the oil, gas and mineral sectors. Its expansive portfolio includes assets in Somalia, the Republic of Georgia and onshore USA.
Range’s main focus is in Puntland, Somalia, which remains one of the last under-explored countries with a high potential for vast reserves of hydrocarbons. Here, the firm holds a 20 per cent working interest in two production-sharing agreements for the Nogal and Dharoor blocks. These concessions encompass two highly prospective hydrocarbon basins covering an area of more than 20 million acres.
In 2005, Range entered into a heads of agreement to acquire a 50.1 per cent interest in the sole and exclusive rights to all mineral and hydrocarbon exploration and development in the Somali state. In July 2006, the company reached an agreement to acquire the residual 49.9 per cent interest.
“Range started in oil and gas with 100 per cent of the hydrocarbon area of Northern Somalia, in Puntland, the true oil of Africa,” says Peter Landau, Executive Director and company secretary. “There were not a lot of people spending money in Northern Somalia at the time.”
Today, besides its 20 per cent interest in the main two blocks, Range has also brought in a main partner, Africa Oil. Between the two companies, Landau estimates that $65 million has been spent with the aim of drilling the first well in the region for 17 years by the end of 2010 or early 2011.
“In the five years that we have been involved now no one has ever disputed the geological potential of those basins,” says Landau. “They are both multi-billion dollar targets and hold enormous potential.”
Republic of Georgia
In July 2009, Range entered into an agreement with the private UK firm Strait Oil and Gas Limited to acquire a 50 per cent interest in two oil and gas blocks in the Republic of Georgia in Eastern Europe. The two blocks, VIa and Vlb, cover a contiguous area of 7,000 square kilometres, approximately 10 per cent of the surface area of the former Soviet state.
Recent activity in the region includes a two-day seismic program on these blocks, the results of which should be available in the next month. “The target is nowhere near as big as Puntland but Georgia has significant growth potential,” explains Landau. “The result of the seismic will tell more. It is shallow drilling so we find it an easy place to operate. Similarly we hope to have a well established by the end of the year.”
In September 2009, Range acquired a 25 per cent interest in the North Chapman Ranch project in Nueces County, Texas. The project area encompasses approximately 1,280 acres in one of the most prolific oil and gas producing areas in the state of Texas.
The operator, US-based private oil and gas firm Crest Resources Incorporated, is in the process of drilling the first well, known as Smith #1. Range also has 20 per cent in all subsequent wells assuming the exercise of certain clawback provisions by joint-venture partners and based on the success of Smith #1.
Along with Range’s planned drilling program in Puntland, the Republic of Georgia and onshore Texas, the firm also has 10 per cent interest in a production field in Trinidad, which they are in the process of completing. “That is a very esteemed field in Trinidad but, in terms of spending and development money, it has had very little done to it in the last 15 years,” says Landau. “We are confident that we can increase the number of barrels a day.”
All of these projects are significant steps toward establishing the company as a diversified international explorer with a growing oil and gas acreage position and significant upside potential.
“We have a very good portfolio from Texas all the way up to Puntland,” says Landau. “Diversity of portfolio is our main competitive edge. We have a unique portfolio that few companies in our market have.”
Range is also known for its ability to follow through, says Landau. “We demonstrated that in Puntland where we had an initial four-year contract with the government. Relationships with shareholders are just as important as those with the operator in the places you do business, because you have always got to go back and raise money for these things.”
While Range continues to grow its assets across the globe, it will also focus on Trinidad to bring that asset into Range as well as potentially drilling a new formation. “In terms of activity, every single one of our assets has significant up growth that we are targeting within the next month,” says Landau. “Our assets offer a very unique position. There is plenty happening in the next 12 months.”