So there's 3 rigs currently drilling things, with another set to start this month, and then 2 more by 'mid year', whatever that means in PL-time.
I see the target of 1400-1800bopd has been scaled down to 1000bopd. Probably inevitably given the slowness in rig drilling, but annoying for investors nevertheless.
There's progress, but it just feels at the rate of a snails pace sometimes. Once all 6 rigs are in operation things should move quicker, but the thing is 'mid year' could easily mean November in PL-time, and 'Q3 2012' for a Herrera could easily become Q1 2013. Don't believe me? The Georgia well was scheduled for Q4 2010 and didn't drill until Q2 2011.
It's a dodgy one. Nice to see some progress (though please, let's end the 'blame PetroTrin' excuse for delays, as there clearly hasn't been loads of action on the ground) but a high cash burn period of company evolution is coming up. Second Georgia well of which we're paying most of the costs for (Strait were carried for 2 drills IIRC). Seismic in Puntland offshore and Columbia will cost a lot of money. Range are carried for the second Puntland well to some degree because of the revised agreement with AOI, but by the end of the year a decision will have to be made regarding Puntland, which will obviously mean asking questions about funding.
1000bopd according to Landau generates $12m in cashflow to Range over a year. That's nice, but it's a drop in the ocean compared to funding requirements. Another Georgia well will cost $8m, Puntland will be another $3m or so. General cashburn for working capital will be another $7m. That's $18m and we've not even considered future Puntland funding past the second well, or the start of Columbia or offshore Puntland seismic (although I'm pretty sure we'll get farm-in partners for both to cover some costs).
Then of course there's the continual costs of Trinidad- paying all these employees can't come cheap. And we still need to know what the terms of Range's farm-in is for Columbia.
Until Range gets up to around 2000bopd in Trinidad, they'll still be funding concerns IMO. Hopefully they'll manage it sooner rather than later.
RRS Price at posting:
18.5¢ Sentiment: None Disclosure: Not Held
