Company: Range Resources Analyst: Old Park Lane Capital Recommendation: buy Target price: 50c
With excitement growing around Range Resources and its first well, Shabeel-1, in Puntland, analysts at Old Park Lane Capital recommend the company as a buy.
In January, Range and its joint venture partners spudded Shabeel-1, the first of two wells in autonomous Puntland region’s Dharoor Valley.
Shabeel-1 is the first well to be drilled in the region in more than 20 years.
So far, the well is drilling ahead at 2002m with oil and gas shows encountered in a 400m section composed of interbedded sandstones and shales believed to be Upper Cretaceous in age.
While the quality of the intervals cannot be determined until downhole electric logs and formation tests have been run, the oil and gas shows confirm the existence of a working petroleum system.
“This is very good news for the partners,” Old Park Lane Capital said in an investment note.
“Although there is a great deal of information yet to be collected on Shabeel-1, the indications from drilling so far are encouraging and we await further announcements eagerly.
“With a pre-drill prospective resource estimate of 300 million barrels for Shabeel-1, Range’s 20 per cent interest would be highly material to the company in the event of a discovery.”
Shabeel-1 has a planned total depth of 3800m.
Old Park Lane Capital has set a target price of 50c.
Shares in Range have been on the upward curve for the past three months and were last trading at 19.5c.
RRS Price at posting:
19.0¢ Sentiment: None Disclosure: Not Held
