Range Resources acquires interest in prospective Texas oil field


Range Resources (ASX, LON:RRS) has acquired a 13.56% interest in a second Texas oil field, in the Red River County that was home to a recent oil discovery.

The 1,570 gross acres was acquired for total leasehold acquisition costs of $US254,000.

Development of the shallow oil reservoir in the Cotton Valley formation is expected to begin in July with the drilling of a horizontal appraisal well in the field.  Gross recoverable reserves in the formation are estimated to hold between 4 to 6 million barrels of oil, although it has not yet been signed off as being consistent with the SAPE reserve and resources reporting guidelines.

The Company has commissioned independent petroleum consultants Lonquist & Co. LLC to certify the recoverable reserves of the Cotton Valley formation located on the Range acreage.

The East Texas Cotton Valley oil accumulation was discovered in March of 2008 with the drilling of a vertical well to approximately 5,500 ft. The initial well encountered more than 100 ft. of gross oil pay at approximately 5,300 ft and was immediately placed into production.

A horizontal appraisal well spudded in December of 2008 encountered good quality reservoir in a lateral section approximately 1,500 ft. long, but was badly damaged during completion. A second horizontal well is expected to spud in the third quarter of this year.

If successful, the upcoming well will trigger further development of the Cotton Valley field that could ultimately see more than 20 additional wells, with a targeted average recovery per well of over 220,000 barrels of oil. With horizontal well costs estimated at $1.57MM, gross finding & development costs are expected to be less than $7. 15/bbl.

Russell Bevly #1 appraisal well

The Russell Bevly #1 appraisal well, 20% working interest owned by Range, part of the North Chapman Ranch Joint Venture’s multi‐well program in Texas has now been drilled to the intermediate casing depth of 11,400 ft.

Following this, open hole logs were acquired and 9 5/8" casing set and cemented. Drilling has recommenced towards the proposed target depth of ~14,000 ft (4,268m).

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