Post by riskhunter on Jul 8, 2014 7:51:52 GMT
A most welcome glowing report found by Sighns over at iii
I can't remember how long ago it was that anything this great was said about Range.
www.dailymail.co.uk/money/investing/article-2683395/New-management-fresh-approach-strategy-Range-Resources-focus-doubling-production.html
SMALL CAP SHARE IDEAS: New management and a fresh approach will see Range Resources focus on doubling production
By IAN LYALL, PROACTIVE INVESTORS
PUBLISHED: 14:49 GMT, 7 July 2014 | UPDATED: 15:09 GMT, 7 July 2014
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For those who’ve followed Range Resources over the last few years, its current incarnation under new chief executive Rory Scott Russell and his team is a world away from what went before.
Gone is the pre-occupation with the speculative. In its place is a laser focus on its assets in Trinidad and doubling production by the year-end to 1,000 barrels of oil a day.
The addition of a new cornerstone investor, Hong Kong-based Abraham Limited, brought in the US$12 million (at a 50 per cent premium to the share price at the time) that was used to repay expensive convertible debt.
New strategy: Range has identified 175 targets that it can drill over the next three years. The aim is to bring the big company experience and discipline to a small firm - but without the overheads.
+1
New strategy: Range has identified 175 targets that it can drill over the next three years. The aim is to bring the big company experience and discipline to a small firm - but without the overheads.
Range has a strategic alliance with Chinese oil services firm LandOcean, which is valued at US$1 billion and which is a specialist in water flooding that will help tap 14 million barrels of the Beach Marcelle acreage on the Caribbean island.
Rather than relying on investors, the group plans to raise debt to develop its producing assets.
'This is a new beginning for Range,' says Scott Russell, who was recruited from Shell.
'Substantially we are a re-launched company with a new management and a new strategy.'
That new management includes chief financial officer Nick Beattie, former managing director of bank BNP Paribas' upstream oil and gas team, and exploration chief William Duncan, a 30-year veteran who previously led operations in Libya and Trinidad.
The aim is to bring the big company experience and discipline to a small firm – but without the overheads.
Initially, the plan is to increase production to 1,000 barrels.
TiM iPhone puff
The potential is there on the producing Morne Diablo, South Quarry and Beach Marcelle licences it bought in 2011.
A shallow well might take 10 days to complete and be ready for production in another week.
Okay, the initial production rate might only be 20-75 barrels a day with a fairly steep decline. However, the well pays for itself in a couple of months.
With 12 of its own rigs on hand, the costs can range from a barely believable US$150,000 a well to perhaps US$750,000 for a deeper hole.
Moreover, Range has identified 175 targets that it can drill over the next three years.
The increasingly benign fiscal regime means that the economics of Trinidad soon start to stack up.
A back of the envelope calculation suggests that even at a rather a pessimistic US$15 a barrel ‘netback’ the group should be close to covering its costs at 1,000 barrels a day.
Analysts suggest the netback is more likely to be US$16-25 a barrel.
Scott Russell won’t be tied down to a longer term target, principally because he isn’t sure just how much money he will be able to secure as debt.
But it is fair to say 2,500 barrels looks like an achievable near-term target.
Range isn’t totally devoid of excitement - even though management’s mantra is that 'boring is the new exciting'.
In the last round it picked up the St Mary’s Block and it is farming into Niko Resources’ Guayaguayare acreage on the south-east coast of Trinidad.
With this acreage position and P2 reserves of 22 million barrels, Range has come from nowhere to be the biggest private onshore operator on the Caribbean island.
'It means we are uniquely placed to take advantage of the incentives and the opening up of the onshore to international investment,' says Scott Russell.
'Big capital allowances are there that improve the fiscal terms and provide incentives to companies like ourselves.'
RANGE AT A GLANCE
AIM ticker: RRL
Value: £71mln
Current price: 2.15p
Year high: 2.91p
Low: 0.61p
Outside Trinidad, Range has been involved in drilling two wells in Guatemala. Atzam-4 well was a discovery which is currently producing around 150 barrels a day and the Atzam-5 well is currently undergoing production testing.
Guatemala is one of the diverse set of assets the team inherited, but along with its holdings in Colombia its status in the portfolio is under review.
The group plans to exit Texas and the Republic of Georgia. For both assets the divestment process is already underway.
Meanwhile, Puntland, formerly the source of a great deal of excitement for followers of Range, will be retained.
'It is potentially high upside onshore acreage and the operator (Horn Petroleum) is very good. It is low cost to keep it going, so why wouldn’t we?' asks Scott Russell.
The shares, currently changing hands for 2.2p each, are up around 80 per cent since Scott Russell joined in February this year.
But with a price target of 3.7p a share, Cantor Fitzgerald believes there is further significant upside.
'Range’s interest in Trinidad represents a low-risk, low-cost, high-profit production asset base, with exploration upside and potential for enhanced recovery,' says analyst Emily Ashford.
'In our view, the reservoirs are shallow and well understood with geological risk being virtually zero, given the volume of historical drilling in the region.'
I can't remember how long ago it was that anything this great was said about Range.
www.dailymail.co.uk/money/investing/article-2683395/New-management-fresh-approach-strategy-Range-Resources-focus-doubling-production.html
SMALL CAP SHARE IDEAS: New management and a fresh approach will see Range Resources focus on doubling production
By IAN LYALL, PROACTIVE INVESTORS
PUBLISHED: 14:49 GMT, 7 July 2014 | UPDATED: 15:09 GMT, 7 July 2014
View
comments
For those who’ve followed Range Resources over the last few years, its current incarnation under new chief executive Rory Scott Russell and his team is a world away from what went before.
Gone is the pre-occupation with the speculative. In its place is a laser focus on its assets in Trinidad and doubling production by the year-end to 1,000 barrels of oil a day.
The addition of a new cornerstone investor, Hong Kong-based Abraham Limited, brought in the US$12 million (at a 50 per cent premium to the share price at the time) that was used to repay expensive convertible debt.
New strategy: Range has identified 175 targets that it can drill over the next three years. The aim is to bring the big company experience and discipline to a small firm - but without the overheads.
+1
New strategy: Range has identified 175 targets that it can drill over the next three years. The aim is to bring the big company experience and discipline to a small firm - but without the overheads.
Range has a strategic alliance with Chinese oil services firm LandOcean, which is valued at US$1 billion and which is a specialist in water flooding that will help tap 14 million barrels of the Beach Marcelle acreage on the Caribbean island.
Rather than relying on investors, the group plans to raise debt to develop its producing assets.
'This is a new beginning for Range,' says Scott Russell, who was recruited from Shell.
'Substantially we are a re-launched company with a new management and a new strategy.'
That new management includes chief financial officer Nick Beattie, former managing director of bank BNP Paribas' upstream oil and gas team, and exploration chief William Duncan, a 30-year veteran who previously led operations in Libya and Trinidad.
The aim is to bring the big company experience and discipline to a small firm – but without the overheads.
Initially, the plan is to increase production to 1,000 barrels.
TiM iPhone puff
The potential is there on the producing Morne Diablo, South Quarry and Beach Marcelle licences it bought in 2011.
A shallow well might take 10 days to complete and be ready for production in another week.
Okay, the initial production rate might only be 20-75 barrels a day with a fairly steep decline. However, the well pays for itself in a couple of months.
With 12 of its own rigs on hand, the costs can range from a barely believable US$150,000 a well to perhaps US$750,000 for a deeper hole.
Moreover, Range has identified 175 targets that it can drill over the next three years.
The increasingly benign fiscal regime means that the economics of Trinidad soon start to stack up.
A back of the envelope calculation suggests that even at a rather a pessimistic US$15 a barrel ‘netback’ the group should be close to covering its costs at 1,000 barrels a day.
Analysts suggest the netback is more likely to be US$16-25 a barrel.
Scott Russell won’t be tied down to a longer term target, principally because he isn’t sure just how much money he will be able to secure as debt.
But it is fair to say 2,500 barrels looks like an achievable near-term target.
Range isn’t totally devoid of excitement - even though management’s mantra is that 'boring is the new exciting'.
In the last round it picked up the St Mary’s Block and it is farming into Niko Resources’ Guayaguayare acreage on the south-east coast of Trinidad.
With this acreage position and P2 reserves of 22 million barrels, Range has come from nowhere to be the biggest private onshore operator on the Caribbean island.
'It means we are uniquely placed to take advantage of the incentives and the opening up of the onshore to international investment,' says Scott Russell.
'Big capital allowances are there that improve the fiscal terms and provide incentives to companies like ourselves.'
RANGE AT A GLANCE
AIM ticker: RRL
Value: £71mln
Current price: 2.15p
Year high: 2.91p
Low: 0.61p
Outside Trinidad, Range has been involved in drilling two wells in Guatemala. Atzam-4 well was a discovery which is currently producing around 150 barrels a day and the Atzam-5 well is currently undergoing production testing.
Guatemala is one of the diverse set of assets the team inherited, but along with its holdings in Colombia its status in the portfolio is under review.
The group plans to exit Texas and the Republic of Georgia. For both assets the divestment process is already underway.
Meanwhile, Puntland, formerly the source of a great deal of excitement for followers of Range, will be retained.
'It is potentially high upside onshore acreage and the operator (Horn Petroleum) is very good. It is low cost to keep it going, so why wouldn’t we?' asks Scott Russell.
The shares, currently changing hands for 2.2p each, are up around 80 per cent since Scott Russell joined in February this year.
But with a price target of 3.7p a share, Cantor Fitzgerald believes there is further significant upside.
'Range’s interest in Trinidad represents a low-risk, low-cost, high-profit production asset base, with exploration upside and potential for enhanced recovery,' says analyst Emily Ashford.
'In our view, the reservoirs are shallow and well understood with geological risk being virtually zero, given the volume of historical drilling in the region.'
