Range Resources (LON:RRL,ASX:RRL) confirmed that it has now completed the deal to take full ownership of its assets in Trinidad.
The group announced the US$52 million (plus 35.8 million shares, worth about £6 million at current prices) deal to buy SOCA Petroleum back in April. It already owned a 10 percent stake in the assets and now that it has bought out its partner, it has full control.
Crucially, the deal’s completion triggers the start of an aggressive work program that Range is expecting to give a rapid increase to production, from the existing reserve base.
Range will now move towards a 4,000 barrel per day production target from the existing reserves. This will be a massive step up from the currently production rate which stands between 650 - 700 barrels a days.
“The program will also target the deeper, and potentially bigger, Herrera formation and untested areas not currently forming part of the current reserve base,” Range said this morning.
“The company is currently updating the current reserve and valuation report across the Trinidad assets which will also include the Herrera potential which has not been included in previous reports.”
In April, Range director Peter Landau said: "Onshore Trinidad is a low cost, high operating margin environment with oil production sold at the wellhead and transported to the Pointe-a-Pierre Refinery, which has capacity for all additional planned production."
Apart from the Trinidad oil fields, Range’s portfolio includes oil and gas production and development assets in Texas and exploration projects in Georgia and Puntland.
Earlier this week broker Old Park Lane initiated coverage of the stock with a buy and bullish 28.1 pence a share price target. It follows a “very positive update” last week from oil and gas explorer.
Old Park Lane points out that recent fracture stimulation work at the North Chapman Ranch Project in Texas has yielded “dramatically increased production from the Russell Bevly #1 well, while further “frack” work at the East Texas Cotton Valley Prospect will commence within a fortnight.
Range has also finalised the details of an aggressive drilling programme in Trinidad which is expected to commence within the next 45 days.
"(Its) progress in Texas and Trinidad continues to de-risk the business while maintaining exciting exposure to highly attractive exploration upside in Georgia and Puntland.
"With Range participating in four high impact exploration wells over the next six months, we believe that investors should see the recent weakness in the share price as an opportunity to buy the shares."