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Proceeds from the sale will be used to progress growth of production and cash flow from its prospective assets in Colombia and Trinidad.
The purchaser will pay US$25 million at closing on or before 30 August 2013 and a further US$5 million in royalty payments from future production.
"The completion of the sale of the Texan asset is a significant milestone and will significantly strengthen Range's balance sheet and allow the Company to redeploy proceeds into our highly prospective international assets, including Colombia and the recently announced farm‐in with Niko Resources," Range executive director Peter Landau.
"In addition to the proceeds from the sale, we are also in the final stages of completing the reserve based lending facility for Trinidad, which fully sets the company up for significant operational growth."
Range had acquired its stake in North Chapman in September 2009 for about $1.35 million being the cost of drilling the Smith-1 well and bringing the well into production.
The company has a 25% interest in Smith-1 and a 20% interest in further wells at North Chapman.
It then acquired its stake in East Clarksville (East Texas Cotton Valley) in June 2010 for US$254,000. This was increased to 21.75% for a further $148,000 in January 2011.
North Chapman has gross proved, probable and possible reserves of 228 billion cubic feet of gas, 18 million barrels of oil and 17MMbbl of natural gas liquids while East Clarksville has 3.3MMbbl of oil.
In Colombia, the consulta previa process continued throughout the June 2013 quarter, which involves liaison with the various indigenous communities within the license areas.
Once completed, the company expects to initiate preparations for the seismic program, with planned mobilisation to occur in the current quarter.
Initial geophysical and geochemical evaluation of the blocks shows 15 potential leads, with potential upside to be imaged in greater detail with high resolution 3D seismic surveys.
The PUT- 6 and 7 blocks are located north of large proven reserves across border in Ecuador that produce more than 30,000 barrels of oil per day.
The blocks are surrounded by successful producing fields (Ecopetrol, Gran Tierra, Suroco). Typical well productivity in the Putamayo basin ranges from 1,000 to 2,000 barrels per day.
Range had in July reached an in principle agreement to farm-in to over 280,000 acres of both onshore and offshore oil and gas acreage in Trinidad held by Canada listed Niko Resources (TSE: NKO) that is on trend with its existing exploration, development and secondary recovery projects.
The company will earn 50% of Niko's existing interests in the deep and shallow rights of the Guayaguayare Block - increasing its gross acreage footprint in the country by about 17 times - by funding two onshore wells and a potential initial appraisal well in the event of a discovery at its sole expense. The first well is targeted to spud in early 2014.
Under the agreement, certain payments will be made to Niko upon achievement of commercial production from any discoveries.
Niko currently holds shallow and deep Production Sharing Contracts for 65% of the onshore portion and 80% of the offshore portion of the license area with the Guayaguayare Block comprising 280,170 shallow acres and 293,999 deep acres.
Trinidad's State Owned petroleum company, Petrotrin, holds the remaining balance of the interests (35% onshore and 20% offshore).
Range will use its own drilling rigs and personnel for the farm‐in, and is in advanced discussions with a leading International Drilling and Oil‐field Services Provider to complement existing infrastructure and accelerate development.
The Guayaguayare Block in particular offers both onshore and offshore acreage that is on trend with the company's existing exploration, development and secondary recovery projects.
Notably, it surrounds Range's Beach Marcelle Field and contains four prospective onshore fields that are each considered to have significant potential for oil. This offers the opportunity for Range to leverage its fleet of drilling and production rigs and operating experience within the region.
The offshore structural complex is believed to have significant potential for large gas discoveries with several large structures mapped.
Niko and previous operators have acquired and processed 217 square kilometres of 3D seismic on the onshore acreage as well as 277 square kilometres of 3D seismic in 2011 on the offshore acreage.
The latter has been merged with the reprocessed data from two 3D marine surveys from 1997 and 1990 to cover a total area of 836 square kilometres.
Range is focused on expediting the current simulation phase at the Beach Marcelle block, where 75% of its proved undeveloped reserves are located.
It is also looking at deepening up to 6 wells following the receipt of environmental approvals earlier in the year.
Successful deepening of existing well bores is expected to recover up to 90,000 barrels of oil per well at about 80 barrels per day initial production, and at costs significantly lower than drilling and completing new wells.
Range's waterflood program in the Beach Marcelle field builds upon 3 previously successful, but prematurely halted, waterflood programs performed by Texaco in the 1950's.
With modern reservoir and waterflood simulation software available, it is expected that Range will sweep the remaining proven reserves a lot more efficiently than the 3 original waterflood programs.
The program will also be targeting additional fault blocks within the Beach Marcelle license, not yet previously waterflooded, yet comprising a portion of the 12.8 MMbbls of 1P proved undeveloped reserves.
At its Lower Forest development, the company's rigs have drilled seven wells while production rigs have completed remedial work on 5 wells, including 4 wells in South Quarry.
It has also re-entered the QUN 16 well that was drilled and tested in 1942. Re-activation of the QUN 16 well will be performed using one of its production rigs and is expected to add new reserves and production, while further extending the Lower Forest trend to the east of the QUN 16 well.
This will also establish a large area for low-risk infill drilling between the well and the current Lower Forest development.
During the quarter, the company perforated the Middle and Upper Cruse sections of the QUN 135 well and is currently undergoing operations to perforate the Lower Forest section of the well.
The performance of the Middle Forest sands has led it to decide on drilling an adjacent well, which will target the same Middle Cruse structure from a nearby location.
The sale of Range Resource's Texas assets will add an initial US$25 million to its balance sheet, which will then be deployed towards accelerating its operations in Trinidad and Colombia.
In Trinidad, the Niko farm-in offers the company exposure to both onshore and offshore potential that compliments its existing producing oil assets that could increase production and lower operating costs.
Range had $5.1 million in cash on hand as of 30 June 2013. Following receipt of the sale proceeds, the company would have about $32 million, compared to its market capitalisation of $129 million.
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