This article is a few months old ,( miningmarven.com ) however...

This article is a few months old ,( miningmarven.com ) however it illustrates just how significant the reserve update could be to RRS and upon confirmation may surprise many ..


After reaching target depth with the Smith 1 Well in the North Chapman ranch area of Texas in November the markets were made to wait until 21 December 2009 before an rns confirmed a commercial oil and gas discovery.


Initial test results showed flow rates of 2.4million cubic feet of gas and 191 barrels of oil per day. No estimates were given as to the side of the finds but Range is to conduct additional testing of the well into the sales line whilst finishing completion. The company has confirmed that reservoir size and reserve figures will be released once completion operations are finalised this month (January 2010). Also, first production and sales are expected to commence later this month. So Range will become, at some time in the next few weeks, a revenue earning producer. Quite a change given the difficulties of the past.



Drill costs are supplemented by costs to production and Range has incurred expenditure of just A$1.3million, a figure they expect to recover in around nine months from their share of production and sales revenues. Quite a feat!



Now heres a few extra points to note. Firstly, the initial well test measurements were conducted using a small choke size, so the full potential flow rate could be materially higher. Secondly, only one of the three pay zones has been perforated and tested, so more upside there. Thirdly, they are planning additional wells thus speeding up the potential production and sales revenues (of course they have to fund their share of cost for all wells drilled).



And finally, Range and its partners have just increased their Texan acreage from 1,120 acres to 1,680 acres, a 50% increase. Evidently they like what they see!!



There is much speculation as to the extent of reserve and of course speculation can lead to desperation. That said its worth noting that the original target for the drill campaign was to find a minimum of 80 billion cubic feet of gas. Initial speculation is that the find could exceed this target substantially and of course, there is also the oil to consider, something of a bonus.



Many investors are optimistically hoping for 200 billion which sounds a stretch until you consider that the Mobil David field just north of North Chapman ranch produced 250 billion cubic feet and over 10 million barrels of oil. Food for thought, but without doubt, the Texas success could be a mini company maker in its own right!