Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Range Resources Kicks Off Trinidad Oil Development Program

Range Resources (ASX: RRS) is executing its updated field development plan in Trinidad to increase oil production and cash flow with six wells scheduled for drilling and completion.

It is also proceeding with the proposed waterflood program for the Morne Diablo project after receiving final approvals and is expediting the ongoing engineering and simulation phase of the Beach Marcelle waterflood.

Drilling

At the Morne Diablo field, Range has recently completed mast upgrades for Rig 8 and will now recommence drilling of the MD248 well to its target depth.

This will allow the company to test the deeper Lower Cruse targets after encountering strong oil shows in the shallower section, including oil to surface.

Located below the historic producing Forest, Upper Cruse, and Middle Cruse horizons, the Lower Cruse remains largely untapped though rapid development can occur due to optimal location within the main infrastructure area, and proximity to current oil facilities.

The Cruse formation is the deeper producing interval within the Morne Diablo field with the majority of production coming from Middle Cruse sands.

To date, 31 wells have been drilled in this zone, producing 3.9 million barrels of oil.

Once the MD248 well is completed, the company will either drill adjacent offsetting locations to establish formation continuity and production from Lower Cruse development wells, or move to a new location to target the Herrera formation.

Field development

The Proved development program will use the company's six existing drilling rigs until the end of 2015 with a planned drilling program of 88 development wells.

A total of 65 wells are to be drilled in the Lower Forest sands over a 24 month period.

In line with the field development plan, Rig 1 will spud an additional Lower Forest well on the Morne Diablo field, with Rig 5 to drill and complete two additional Lower Forest wells.

At the South Quarry field, Rig 2 will target Upper Cruse and Lower Forest sands to extend known producing trends on that block.

The Lower Forest formation occurs at greater depths in the South Quarry area, which the company believes will yield higher initial rates and greater reserve recoveries per well.

Range is also finalising negotiations for the financing of two additional drilling rigs (with technical assistance and support crew) to continue with its Herrera drilling program, the Niko Resources farm-in and the potential block being awarded in the recent bid round.

Morne Diablo Waterflood

Following the final receipt of approvals, the company is now commencing field development for the proposed Morne Diablo waterflood program.

This involves the installation of surface equipment and facilities followed by pre-production pressurisation. The project has a targeted production rate of up to 650 barrels of oil per day.

Beach Marcelle Waterflood

The current focus remains on expediting the ongoing engineering and simulation phase of the waterflood programme in parallel with moving a rig to site to begin well integrity and workover operations.

The current program will be target additional fault blocks within the Beach Marcelle license that have not yet previously waterflooded, yet comprise a portion of the 12.8 million barrels of Proved Undeveloped Reserves.

In addition, the new technical team have looked at the data and have identified additional recoverable reserves, which will be formalised after full appraisal.

Once production commences, the waterflood program is expected to add production of 3,000 to 3,500 bpd of oil for a minimum of 8 years.

Range is also assessing the potential of a turnkey facilities contractor for the Beach Marcelle waterflood project and the use of nitrogen injection to assist in better recoveries and economics.

Nitrogen gas injection is one of the most-commonly used approaches in enhanced oil recovery. The nitrogen injection increases the pressure in the oil wells so that fossil resources can be more easily recovered and oilfield yields significantly improved.

The Company is also looking at deepening up to 6 wells to recover up to 90,000 barrels of oil each at about 80bpd of oil initial production and at costs significantly lower than drilling and completing new wells.

Analysis

Production is the name of the game in the oil and gas industry and Range Resources is taking steps to increase its oil production and reserves in Trinidad.

With six owned and operated rigs, the company has mapped out an aggressive drilling program of 88 development wells that is aimed solely at achieving this goal.

Plans are also underway to target new zones and drill wells at the Niko Resources farm-in area while the waterflood programs at Morne Diablo and Beach Marcelle will further increase production by tapping previously unproduced oil.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.