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Range Resources (ASX: RRS, AIM: RRL) is an oil and gas exploration, development and production company, which is dual-listed on the ASX (RRS) and AIM (RRL).Its principal activities are directed towards finding and delineating hydrocarbons with interests in Trinidad, Texas- USA, Colombia, Puntland- Somalia, and the Republic of Georgia.
Range Resources raises oil and gas reserve estimates for North Chapman Ranch projectJune 08 2012, 9:15am
Investors cheered the news, sending shares in Range up 4.5 percent to £174.5 million by 9am.
The reserve upgrade followed the completion of the Smith No.2 and Albrecht No.1 wells, which increased production from the field to 4.5 million cubic feet per day (mmcfpd) and 394 barrels of oil per day (bopd).
Compared with the previous update in December, oil reserve estimates for the project, which is 20-25 percent owned by Range, have increased 57 percent to 1.1 million barrels (mmbbls) in the proved category and 20 percent to 0.6 mmbbls in the probable category.
Proved gas reserves have risen 54 percent to 11.7 billion cubic feet (bcf) and probable reserves climbed 16 percent to 6.4 bcf.
The company is now preparing to sell its interests in North Chapman Ranch, targeting completion in the third quarter of the year, to “focus its capital on higher value adding opportunities in its portfolio”.
“We are extremely pleased with the recent results from our Texas drilling programs,” said executive director of Range Peter Landau.
“The sales prices of similar production assets in the region have been encouraging, and any such divestment will provide significant funding that could be applied to Range's current activities and other possible corporate initiatives such as an on market share buy back.”
Based on the new estimates, consultancy Forrest Garb values Range’s North Chapman proved and probable reserves at US$93 million and US$39 million respectively, while the total value including possible reserves stands at US$169 million.
Range also provided an update from its East Texas Cotton Valley project area, where additional sections of the Ross 3H horizontal well were recently fracture stimulated.
This well has already shown early indications of oil saturation, consistent with strong oil shows recorded during drilling.
The project is considered to be similar to the adjacent Clarksville field, which is expected to produce more than seven million barrels of oil.