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Range Resources ? 10+ Wells & Production

Range Resources (LON:RRL) is a dual listed (AEX & AIM) ISA valid oil and gas exploration and production company with interests covering 4 geographical areas; Texas USA, Republic of Georgia, Puntland Somalia and Trinidad.

When you look around for oil stocks with potential, RRL certainly fits the bill. Its two main high risk/high reward exploration assets to be drilled in 2011 are in Puntland (2 wells) Somalia, and in the Republic of Georgia (2 wells) which eventually have the potential to provide a multi billion barrel upside resource exposure. Over the next few weeks all eyes will be on Georgia and the imminent first spud, with the first well touted as a 150m barrel target on a recovery factor of 30/40%.

On securing the rig for its Georgia drilling programme Peter Landau the Range Resources Executive Director commented:

?This is a significant and exciting milestone for the Company, as it paves the way for the Range?s first exploration well in Georgia, following the successful seismic program and helium survey.? [3]

Other lower risk assets include interest in the North Chapman Ranch and the Cotton Valley in Texas at 25% and 21.75% stake respectively. The USA assets have already commenced production and are expected to be the subject of considerable exploration activity over the next 6 years (at least 4 wells in 2011) and certainly provide a good underpinning value to the investment case.

Now, yesterday?s news relating to Range?s interest in Trinidad has the potential to change the RRL investment case dramatically. Having entered into a Heads of Agreement to acquire 100% ownership interest in the three onshore production licences together with an associated local onshore drilling operation, Range has full access to a proven oil producing area covering a total of 16,309 acres. Current production from the Trinidad fields is approximately 600 bopd, however Range believe that following a minimal work program, production could be lifted to more than 4,000 bopd within 36 months on the known reserves. With multiple production wells planned for 2011 in addition to at least 1 exploration well targeting the highly prospective deeper Herrera formation, Range Resources is ultimately targeting an increase in the production level to between 8,000 - 10,000 bopd, which, if achieved, would surely change the status of Range Resources.

Range's Executive Director, Peter Landau commented on the Trinidad oilfields acquisition:

"With the recent strength and growth in Range's asset base and market capitalisation, the 100% acquisition represents an incredible opportunity to compliment Range's asset base of good value exposure to early stage, low risk production / mature exploration opportunities whilst retaining significant exposure to considerable measurable exploration upside."

"Onshore Trinidad is a low cost, high operating margin environment with oil production sold at the wellhead and transported to the Pointe-a-Pierre Refinery, which has capacity for all additional planned production."

"The Company believes that there is significant potential for value enhancement given the known management team and will target (subject to exploration success) an ultimate production profile of up to 10,000 bopd over the next 2-3 years ,?. [4]

Ticker code: RRL, Shares in issue: 1,604.92m*, Current SP: 19.88, Market Cap: ?319.06m, 52 Wk Low: 3.25, 52 Wk High: 25.25