Range announced the following with respect to the extension of the production sharing agreements (PSA) for the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area, as announced January 18, 2011.
Range has agreed with its joint venture partner and operator Africa Oil Corp. that the second exploration well due for spudding on of before 27 September 2011, will be included as part of Africa Oil's exploration commitments under the Joint Venture Agreement between Range and Africa Oil Corp. Under this agreement, Africa Oil Corp. is obliged to spend US $22.5m in both Dharoor and Nugaal before Range reverts to a contributing basis.
Africa Oil Corp. has satisfied their commitments with respect to Dharoor, however to date, still has circa US $15m expenditure commitments on Nugaal, with expenditure to date on Nugaal being circa US $7.5m. With the second well being able to satisfy the joint ventures obligations under the Nugaal PSA, Range will be carried for the first US $15m spent on the well.
Completion of £20 million Equity Line Facility with Dutchess Opportunity Cayman Fund
Range has also secured a three year Equity Line Facility of up to £20 million with Dutchess Capital. The ELF has been arranged by First Columbus, Dutchess' joint venture partner in the UK.
The ELF offers the Company ongoing access to capital as it enables the Company to obtain funding from Dutchess at any time during the next three years by way of subscription for new ordinary shares in the Company. Subscriptions will be priced at a 7 per cent discount to the market price and will take place at timings and intervals and in sizes determined by the Company, subject to the agreed mechanisms specified under the ELF.
The ELF may be drawn down in tranches linked to the Company's average daily trading volume in the three days prior to the notice of draw down or in other specified amounts. The Company is able to specify a minimum acceptable price for each tranche to prevent shares being sold in the market at an unacceptable discount. Each drawdown is limited to 2.99% of the issued capital at any one time.
Peter Landau, Executive Director of Range Resources LTD, commented, "alongside our existing funds, this facility will allow the Company to continue its rapid development of assets. Importantly the facility allows the Company flexibility to draw only as needed and therefore protect our shareholders from unnecessary dilution as well as restrictions on the lender with regards to the borrowing and short selling of Range shares."
Douglas Leighton, Managing Partner Dutchess stated, "We are pleased to be partnering with Range Resources as it looks to advance its asset development program through the utilization of our ELF financing. We are delighted to continue our expansion into London by funding listed companies such as Range Resources."
This facility, coupled with existing funds, the Red Emperor farm-in in Georgia as announced 10 January 2011, the Africa Oil carry on the second well referred to above, option exercise monies and revenue from Texan operations, leaves the company very well placed to funds its comprehensive drilling and development program during 2011.
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