In our Value Proposition on 6th January we identified the main areas of the Range Resources' business, namely Texas USA, Georgia and Puntland Somalia. The potential was significant and we likened the Range scenario to a Cinderella story, always working hard in the background and finally it seemed, able to go to the ball!
The downside of going to the ball is that you will certainly need a new dress. But without a fairy godmother to foot the bill, (alas, she lost her magic wand in 2008), where would you expect to get the money from?
Well in the case of Range Resources the funding has now arrived by way of a placing of A$2million announced on 5th January 2010 and also a further A$7million via a rights issue covered in the same announcement.
The problem however is that rights issues can be a little hit and miss. What you need to see is a fully underwritten rights issue whereby no matter how many holders take up rights the company is guaranteed to receive the money. Well that piece of the jigsaw was confirmed today in the latest news release and the overall funding of A$9 million is confirmed.
Range have now built a portfolio which would turn many oil and gas Execs green with envy:
1. Texas USA (25% Range) - a commercial oil and gas discovery expecting to enter production in the coming weeks and a resource estimate due shortly;
2. Georgia (50% Range) - seismic testing underway and results expected shortly in an exciting oil and gas environment;
3. Puntland Somalia (Onshore 20% Range / Offshore 100% Range) - following signature of PDAs and parliament ratification, onshore drill ready targets are in place and spudding of the first well is expected in a few months. Not forgetting the search for a third party for the offshore licences the results of which are expected in the coming months also!
Now, with A$9million in funding confirmed, they have the resources to secure progress in all three areas, something that should certainly inspire investors over the coming weeks and months. And what impresses Mining Maven is the fact that private investors are able to participate in this fundraising (at a discounted price) through the rights issue. Such private investor participation is something…
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