Range Resources (LON:RRL), the AIM and ASX quoted oil group, has unveiled a significant increase in Proved (P1) and Probable (P2), reserves for its North Chapman Ranch Project in Texas, US, which it now plans to divest.
Range holds a 20-25% interest at North Chapman and engaged consultants Forrest Garb to review the reserves following the successful completion of the Smith #2 and Albrecht wells. That has seen a significant reclassification of the previous Possible (P3) reserves into the Proved and Probable categories.
Set out below is a comparison of the gross reserves (100% basis) for the Company’s North Chapman Ranch asset between the previous reserve update in December 2011 and the current gross reserves update for June 2012.
On the proved numbers, Range’s net attributable interest in oil reserves has increased by 57% to 1.1m barrels, in natural gas by 54% to 11.7bcf and in natural gas liquids by 57% to 1.1m barrels. In the probable category, oil reserves increased by 20% to 0.6m barrels, in natural gas by 16% to 6.4bcf and in natural gas liquids by 16% to 0.6m barrels.
Range said that with the drilling of the Smith #2 and Albrecht #1 wells, gross current average production from the field increased to approximately 4.5 million cubic feet of gas per day and 394 barrels of oil per day.
With the field having now been largely appraised and value demonstrated, the company has commenced with the sale of its North Chapman Ranch interests targeting completion in Q3 2012 so that it can focus its capital on higher value adding opportunities in its portfolio.
Work also continues in the company’s East Texas Cotton Valley project area, where additional sections of the Ross 3H horizontal well were recently fracture stimulated and are currently unloading frac fluids. If successful, the Ross 3H well is expected to form the basis of a new horizontal development of the shallow oil reservoir within the Cotton Valley formation. The project is considered to be analogous to the neighbouring Clarksville Field, which is expected to ultimately produce more than 7m barrels of oil.
Peter Landau, Range’s executive director, said: “We are extremely pleased with the recent results from our Texas drilling programs, which has confirmed what the company had strived to do in increasing shareholder value through the increase in the company’s share of Proved and Probable reserves from the North Chapman Ranch Project. This now paves the way for the company to commence divestment of the company’s interest in the project during Q3 2012. The sales prices of similar production assets in the region have been encouraging, and any such divestment will provide significant funding that could be applied to Range’s current activities and other possible corporate initiatives such as an on market share buy back.”
