Range Resources secures 35m-dollar debt financing facility

AIM-listed oil and gas exploration company Range Resources has finalised a 35m-dollar debt financing facility with Meridian SEZC, a financial update has shown.

Range Resources reported that Meridian SEZC, a privately owned finance company located in the Cayman Islands, signed a commitment to purchase $35m of five-year Monetary Production Payment (MPPs) securities from Range Resources.

The MPPs have a coupon of 12% and the company said that they would be secured by future cash flows from Range's Trinidad operations and repayable in cash on a straight line monthly amortised basis.

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In addition to securing a debt financing facility, Range reported that it had secured 10year license extensions for its Morne Diablo and South Quarry licenses in Trinidad.

Some 3,000 acres was added to the east of the existing Morne Diablo license, extending the current Lower Forest development trend while adding potential for other, deeper targets, Range said.

The company also said that enhanced royalty had been reduced from previous farm-out agreements so that the net back increased to $40 per barrel based on 1,000 barrels of oil per day increasing to $50 on 2,000 barrels of oil per day.

Peter Landau, Executive Director of Range Resources, commented: "The process of extending the Morne Diablo and South Quarry contracts is a clear demonstration of the Trinidad authorities and stakeholder's commitment to work with partners such as Range to increase drilling activity and raise production.

"With the new debt facility in place, we intend to fulfil our part of that commitment and now have the additional time, acreage, and capital to achieve those objectives. In addition to the contract extensions with their enhanced economics, Range has initiated third party discussions regarding additional opportunities to expand our operating base outside of the existing contract areas and grow the Trinidad portfolio into a core producing area for the company for decades to come."

MF