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Source: http://www.proactiveinvestors.co.uk/companies/news/35828/

Range Resources' reserve increase could lead to valuation upgrade, says Old Park Lane Capital

"Old Park Lane Capital said the six fold increase in Range Resources’ (LON:RRL, ASX:RRS) proved reserves in Trinidad could lead to an “appreciable” upgrade in its valuation of its Trinidad assets.

This morning, the oil explorer announced that its proved reserves in Trinidad had increased by 490 per cent to 15.4 million barrels of oil.

The increase of US$12.8 million barrels has been independently valued at approximately US$290 million on the basis of production of one to 1.5 million barrels per year over eight years.

According to Old Park Lane analyst Barney Gray, the news is “particularly good” given that the Beach Marcelle block previously had negligible reserves attributed to it.

Range Resources aims to have all necessary approvals in place to start developing Beach Marcelle early next year with a commitment to a US$12 million programme over 12 to 18 months.

Gray said the news was “particularly positive” as the increase in proved reserves adds to Range’s previously reported proved, probable and possible reserve base.

“Consequently, we will look to upgrade our Trinidad valuation appreciably upon confirmation of the details of a development programme commencing in 2012,” said Gray.

The analyst also mentioned Range’s other projects, including its assets in Texas, where the company is currently drilling the Smith No.2 well on the North Chapman ranch to test two zones.

If the well is successful, Range will be looking at an increase in both reserves and production from the field, said Gray.

Following today’s report, Gray upheld both his “buy” recommendation for the stock and his target price of 27 pence per share.

This morning, shares in Range changed hands at 9.4 pence, up 6.5 percent from Thursday’s close, valuing the company at £169.5 million."

Cheers,

Nutty T.