Range Resources predicts production growth

Range Resources said it is well positioned to grow production as it plans to merge with International Petroleum to build an AIM- and ASX-listed oil and gas company.

Range Resources said it is well positioned to grow production as it plans to merge with International Petroleum to build an AIM- and ASX-listed oil and gas company.

The acquisition of International Petroleum is expected to bolster Range's current production by 300% to 76m barrels of oil equivalent (mmboe) of 2P reserves (proven and probable) and by 750% to 233m barrels of 3P reserves (proven, probable and possible).

International Petroleum's oil and gas projects in Kazakhstan and Russia will combine with Range's Georgian exploration properties.

Chief Executive Officer of International Petroleum, Chris Hopkinson, said he expects the merger to be completed in September.

He will take the helm of the newly merged company, which will focus exploration

in Trinidad, Russia and Africa.

In Trinidad, the QUN 141 well is being completed with logs indicating 160 feet of gross oil pay. Drilling is also currently underway on the QUN 142 well which is expected to encounter the same well-developed oil pay.

Hopkinson said the company was able to keep a tight rein on costs as it owns its own operating and drilling subsidiary in Trinidad.

In Russia, the firm is waiting for the "big freeze" to access towns that are surrounded by swamps in the summer.

The group plans to put an additional 10 wells into production, which are projected to increase output by 4,000 barrels of oil per day (bopd). Another 20 well targets have also been mapped.

Cashflows from Trinidad and Russia will then be used to fund exploration opportunities in Africa.

"We have an advantage over other mining companies in Africa because we have the cash flow and resources to back exploration. It gives us a huge leverage," Hopkinson told Digital Look and Sharecast.

International Petroleum recently acquired exploration assets in Niger, Africa which covers 7,000 square kilometres of highly prospective and underexplored land in the Western Central African Rift System.

Range has received commitments for an AU$20m placement from major funds and institutions which will provide a secured loan for the assets which will complement the company's current portfolio.

Hopkinson added the merged company expects to make £150m a year profit by 2016.

He also said it would consider exiting the ASX to become solely AIM-listed once its market capitalisation reaches around £250m. Range currently has a market cap of £82.76m on AIM.

Shares in Range fell 2.5% to 2.93p at 15:18 Wednesday.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

How the stamp duty holiday is pushing up house prices
Stamp duty

How the stamp duty holiday is pushing up house prices

Stamp duty is an awful tax and should be replaced by something better. But its temporary removal is driving up house prices, says Merryn Somerset Webb…
25 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020