Members Only Post.
Not for general release until 12 pm this afternoon. Now on General Release.
It’s been a tough 12 months or so for Range Resources share-holders with failed drills in Georgia & Puntland driving down the Range SP to all time lows. Funding and cash concerns have added to the woes. Online commentators, brokers, financial bloggers, writers, facebookers, tweeters, share-holders & traders have been at each others throats with claim, counter-claim & blame apportioned hither & thither. So just what is going on home on the Range?
Ever intrepid we left no stone unturned in the search for honest answers to genuine legitimate share-holder questions. Yesterday Mountie Dan got his man. I gave Peter Landau, Range head honcho, the infamous BMD third degree “angry” Interview.
I have in the past, pre Puntland/Georgia, waxed lyrical about the potential of this company to become a real value proposition for genuine investors however over the last year or so I’ve become increasingly despondent with the mish mash news service as Range tried to hide and massage away the pain of exploration duds in Puntland/Georgia. Make no bones about it if Puntland & Georgia had come in we would all be sat on an sp trading in pounds rather than pence.
I’ve interviewed and spoke to many in the City of London; Directors, Brokers, Analysts, Chairmen & CEO’s on & off the record over many years but I must say that I’ve never spoken to a CEO with as much genuine commitment & belief in their company to come through these troubled times as Peter Landau has in the Range Resources story. It was hard to stay angry with this guy as it became abundantly clear that Landau was & is as gutted about Puntland/Georgia as his share-holders are as a matter of fact I’d say that he was even more so.
As I’ve written previously, post Puntland/Georgia, there’s a sea change happening here. The goalposts have moved. Landau is a man with a plan. As determined as ever to regroup the company and push on to glory (Major oil production/exploration discoveries) The whole emphasis of the company is now being focused on Trinidad and Columbia with Somalia & Georgia being spun off into a separate entity with free shares for all. What this should do is to take the cost of these assets out of the financial picture and allow Range to coalesce around the “jewel in the crown” Trinidad; which Landau believes to be an absolute stone cold “company maker” I pushed him on why he believed this? Without confirming but also without denying it, it is clear to me that the oil in place and the current bopd figures must be known to be on the up. The company must know that they can significantly increase both.
Yesterdays RNS may give us all an insight into this. “The Company is extremely pleased with the progress made in the first year of operations and the material increases in reserves and resources that we have added to the existing reserves and resource base. As development continues, so to will the increase in reserves along with the reclassification of the prospective resources into reserves following discoveries on our deeper exploration targets.” The $15 million dollar loan agreement announced this week should go some way as to prove the point. There’s a 1500 bopd clause in the agreement that triggers extra funding of $10 million dollars on top of the £15 million dollars.
I can also exclusively reveal that far from having no cash in the bank, Range are as of today holding about $10 million dollars which once again is set to increase as the sale of the USA assets is all but completed. Bids have been short-listed & finalised they range (forgive the pun) from about $30/$50 million dollars. Expect news November. The financial position of the company can only improve further as the Trinidadian government are known by the BMD site to be about to improve Range Resources fiscal terms, which means that there’s going to be more money flooding into their coffers. Range could have access to about $100 million dollars over the next few years which by the way doesn’t include production, so there’s absolutely no chance whatsoever of this company going belly up. (Sorry Tom W to piss on your parade). The phoenix is about to rise the news time-line here will see to that.
Peter Landau freely admits that Range “rolled the dice in Georgia & Puntland” they now have to keep evolving and build back confidence. A New leaner meaner Range Resources beefed up through increased oip and bopd initially from Trinidad with exploration activity in Columbia with at least one well and the 3D seismic program being completed on the Putamayo blocks over the coming 12 months. The first well at putamayo should be the re-entry well as this historically contains 8.5 million barrels of oil. Common-sense.
Range secured a 65% (possibility to increase to 75%) farm-in opportunity (350m of 3D seismic, 2 new wells and 1 well re-entry)on two highly prospective licenses in the on shore Putamayo basin in Southern Columbia. The Company will undertake a 350km 3D seismic program across the two licences and drill one well per licence. The Putamayo basin could turn out to be third time lucky for Range. There’s no doubt that the oil is there it’s all about interpreting the data and locating it.
It needs to be said that Range are a bona-fide oil exploration & production company with a competent Board. Even though Puntland failed to shine it’s to the company’s’ credit that they were able to go into one of the most dangerous countries on the planet and successfully negotiate and drill two wells with their partners. That’s no mean feat. Based on that alone Landaus’ competency to lead and get things done must be given a 10 out of 10 for effort. The company is back on track.
My faith has been restored I wandered from the righteous path and at times doubted my own sanity investing here. But I’m happy to say that like Peter Landau I have come through the belly of the beast unscathed. The angry red mist has dissipated and once again my faith has returned. “There’s oil in them thar hills!” She’s going back up in value.
I see real value returning here over the coming months. It can only get better.