Range Resources is a key junior E&P success story - Edison
Monday, December 06, 2010 by Jamie Ashcroft
Range Resources (LON:RRL, ASX:RRS) has been one of the key junior exploration and production (E&P) success stories of 2010, according to Edison Investment Research analyst Peter Dupont.
The analyst noted that the company?s ?savvy investments? have given it production and development assets in Texas and Trinidad, as well as an exploration play in the Republic of Georgia.
?We believe the potential for further positive newsflow in the coming months is excellent, reflecting the active exploration and development programme,? Dupont said.
?The current share price is largely underpinned by the Texas and Trinidad producing assets.?
Furthermore Dupont highlights that the company?s interests in Puntland, Somalia, continue to offer interesting frontier exposure. Drilling is slated for Q3 2011 in Puntland.
Meanwhile drilling will test its newly identified targets in Georgia in Q1 2011.
?Using a sum of the parts approach, we believe Range can support a current valuation of ?137m or 11.5 per share,? Dupont said.
?This is based on the risked resource potential for each project and prices per barrel of oil equivalent for comparable situations,
He adds: ?In the event of commercial discoveries in Georgia and Puntland there would be scope for major valuation upside from 11.5 per share.?
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