Puntland has always been a fantasy. It's not going to happen...

Puntland has always been a fantasy. It's not going to happen IMO, but to be honest it's no longer our potentially biggest project anymore.

The alleged spudding this year will be targetting 300mmbls recoverable. Range would have 60mmbls of this (20% stake).

But what's the risked valuation, and what price will be given to oil in the ground in a wartorn country? Let's go with a 20% CoS, which is pretty generous given the wildcat nature of this drill. So it's 12mmbls net to Range as a risked value (20% of 60mmbls).

At the most, the value given by the market will be $5 a barrel. It's more likely to be $2.50-$3 in my opinion. $5 is pretty standard practice in regions that won't be producing for many years, but which don't have the political problems that Somalia has. There will be a discount applied. But even taking $5 a barrel, that makes the drill worth $60m to Range (i.e. roughly £40m or 2p a share).

Success would be worth 10p a share (for the initial well). But the spudding is only worth 2p and that's before you factor in the time discount applied (the results will take months to come out).

Compare that to one of the Herrera wells. The presentation says one Herrera Formation target has a potential 10-30mmbls recoverable.

- Producing region, easy to start adding cash to the balance sheet right away.
- Very low political risk.
- We own the rig, so it's not going to cost a fortune in drilling costs.
- The targets are shallower, so one would hope it will take less time to drill.

And most importantly- the market will assign a much higher value to the oil in the ground. The recent increase in P1 reserves at Beach Marselle was independently valued at $22 a barrel. Even halving that to account for the poor market situation, you're still getting double the value for your oil than even the most optimistic Puntland estimate.

What Range needs to focus on now is Trinidad (and getting Texas ready for sale). Puntland and Georgia will be nice if they come off, but due to our smaller stakes in these projects, and the increased cost of drilling because we have to hire the rigs, it makes much more sense to focus on Trinidad.