Range Resources (LON:RRL), the AIM and ASX listed oil and gas group, has reported the results of an independent valuation of the East Texas Cotton Valley Prospect in Red River County, Texas, US. The update follows Range’s acquisition of a 13.56% stake in the project for $US254,000, which was announced to the market on June 17. A reserves report by Lonquist & Co estimates that total gross commercially recoverable reserves (1P, 2P and 3P) at the prospect stand at 5.4m barrels of oil, with 0.7m barrels attributable to Range. An independent PW10 discounted cashflow valuation of Range's net interest in the East Texas Cotton Valley Prospect totals US$18m. Shares in Range moved 2.5% higher to 5p on today’s news.

A multi-well development programme is currently being planned for the 1,570 acre project in an effort to shift possible (P3) reserves into the probable (P2) and proved (P1) reserve categories. Initial work on the shallow oil reservoir in the Cotton Valley formation is expected to begin in the third quarter of 2010, with the drilling of a horizontal appraisal well in the field.

Range’s executive director, Peter Landau, said: “Range is pleased that from an initial investment of US$256k for leasehold acquisition costs, plus an estimated US$220k (Range's net share) to drill and develop the first well scheduled for 3Q 2010, we have been able to achieve a significant uplift in shareholder value, based on independently assessed reserves and valuations reported on the East Texas Cotton Valley Prospect. We feel that the upcoming appraisal activities will add additional value to Range and complement the company's existing Texan interests, as we continue to add reserves, production and cash flow to create a balanced portfolio of lower-risk development and production projects in the US with high potential exploratory prospects in Puntland and Georgia.”

Range has been active in Texas since September 2009 when it acquired a 25% interest in the first well on the North Chapman Ranch project, Smith #1. It also holds a 20% interest in all subsequent wells, subject to certain clawback provisions by joint venture partners based on the current success of Smith #1.

In May, Lonquist & Co carried out an independent reserves and valuation report on the North Chapman Ranch Field, which estimated that total gross commercially recoverable reserves stood at 215 billion cubic feet (bcf) of…

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