shareprohets uk on texas sale? if ever

Range Resources & its US Disposal – where is the cash?
By John Crawford — Sunday 24 November 2013

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

If you are a shareholder in Range Resources (RRL) the last year has been a tragedy with the stock slumping from almost 5p to little over 1.5p. If you are merely an outside observer its public statements have been pure comedy. There are many to focus on but as an illustration I confine myself to the issue of its US Assets. Here is the timeframe – all statements below are from Range itself. 8th June 2012 Range announces a Forest Garb valuation of its US assets: $356 million on an unrisked basis , $169 million on a PV10 basis. It states in an RNS: With the field having now been largely appraised and value demonstrated, the Company has commenced with the sale of its North Chapman Ranch interests targeting completion in Q3 2012 so that it can focus its capital on higher value adding opportunities in its portfolio. Any such divestiture decision will be based on market conditions and the ability to achieve a sales price that appropriately reflects the value of the project interest. 1st August 2012 – Range publishes quarterly numbers and repeats the statement about US assets pretty much word for word. 24th August 2012 in an Investor Q&A (i.e. release not approved by Nomad): “Would it be possible to have an update on Texas. i.e. are there any buyers in the market at this time? Given the usual summer slowdown in the US, the process we are undertaking with an appointed broker should see indicative offers made in September. The US A&D markets are highly liquid, and there are always qualified buyers available. The challenge remains to capture a price for the assets that maximizes shareholder return on the Texas investments while generating capital to be redeployed. Part of any Texas project sale proceeds (if received) would possibly be used for a buy back/ consolidation.” 31st October 2012: Post quarter end the Company received a conditional offer which it is currently seeking to progress into a binding agreement. The conditional offer provides for a us$20m payment up front (settlement contemplated before year end) and us$20m in royalty payments from current and future production. Range will update the market on or about 30 November 2012 being the key final due diligence date. 14th December 2012 – no update from Range on that US sale but its shares wobble and it states: Range Resources notes the unusual trading activity of its stock in recent weeks and confirms that it knows of no reason for this trading. The Company remains focused on delivering shareholder value from its portfolio of assets and will be providing operational updates over the coming days. 18th December 2012: In Texas, negotiations are entering their final phase with regard to the sale of Range's North Chapman Ranch and East Texas Cotton Valley assets. The Company is currently negotiating an agreement for a cash / royalty combination transaction in line with the previously announced price range of between US$20m and US$40m expected to be completed in January 2013. 31st January 2013: With the field having now been largely appraised and value demonstrated, the Company is looking at the divestment of its North Chapman Ranch interests so that it can focus its capital on higher value adding opportunities in its portfolio and has engaged US based advisors to assist in the process, with a number of interested parties having reviewed the Company's dataroom. Negotiations are currently being finalised with regards to the sale of the assets, scheduled for this quarter. As previously announced, the conditional offer is for US$20m up front (settlement before current quarter end) and US$20m in royalty payments from current and future production. Range will update the market as soon as the transaction is finalised. 11st March 2013: Range is pleased to announce that it has now reached an agreement to sell its Texas producing assets for cash payments totalling $US30 million. Subject to final due diligence, the Company will sell its interest in the North Chapman Ranch and East Clarksville fields for $US25 million in cash at Closing plus $US5 million in royalty payments from future production with closing expected to occur in the coming weeks. 30th April 2013, the Quarterly report: During the quarter, the Company announced that agreement had been reached with respect to the sale of the Company's Texan interest with a total cash consideration of US$30m with US$25m payable at closing plus $US5m in royalty payments from future production. The Company is on track to complete in May with all key completion requirements signed off for payment. 1st August 2013, the Quarterly Report: The Company is on track to complete the sale of the Company's Texan interest with a total cash consideration of US$30m (US$25m payable at closing plus $US5m in royalty production payments to be received from future production). All key completion requirements have been concluded with finalization and cash settlement expected shortly. 9th August 2013: Range Resources Limited ("Range" or "the Company") is pleased to announce that the Company has finalised all documentation for the US$30M sale of the Company's Texan assets. Pursuant to the sale agreements, and in line with previous disclosures, the purchaser has agreed to pay US$25M at closing, being on or before 30 August 2013, plus up to a further $US5M in royalty payments from future production. The purchaser has paid a US$1M non-refundable deposit to Range in recognition of the previous delays in completing the transaction. 3rd September 2013: Further to its previous announcements, the Company is proceeding with completion of its Texas asset sale having received confirmation from the Purchaser of settlement. The Company will advise the market when the $25m upfront cash consideration has been received. 16th September 2013: Further to its previous announcements, whilst the purchaser of its Texas assets continues to indicate that it is proceeding to complete settlement of the acquisition, Range is still awaiting receipt of the final consideration for the sale of its Texan assets. Range has agreed to extend the settlement deadline and will update the market when funds are received. 10th October 2013: As previously announced, whilst the purchaser of its Texas assets continues to indicate that it is proceeding to complete settlement of the acquisition, Range is still awaiting receipt of the final consideration for the sale of these assets with Range agreeing to extend the settlement deadline (on a day by day basis by mutual agreement) and will update the market when funds are received. The Company understands that the delays have largely been a result of unanticipated banking procedural requirements for the international transfer of the funds and that these are currently expected to be resolved within the coming weeks. 29th October 2013: the Company has received assurances in recent days from the purchasers of the Texas asset that they are proceeding and we will advise shareholders as soon as payment is received. 31st October 2013: The Company is proceeding with completion of its Texas asset sale for a total cash consideration of US$30m (US$25m initial payment plus $US5m in royalty production payments to be received from future production) having concluded all key completion requirements. Subsequent to quarter end, the Purchaser has informed Range of the delays in completing the settlement which have largely been a result of unanticipated changes required for corporate restructuring by the purchaser which are currently expected to be resolved within the coming weeks. Range agreed to extend the settlement deadline and will update the market when funds are received. Hmmmm. It is now more than a year since Range received the first offer..what do you think? Where's the cash?