Range Resources has issued an exploration update for the Puntland area, offshore Somalia.
The Company's joint venture partner, Africa Oil, completed its 2D seismic program in Puntland’s Dharoor Valley. A total of 782 km of good quality vibroseis data, comprising a grid of 15 lines were recorded.
Africa Oil is currently processing the new survey and combining the results with 555 km of older seismic data previously acquired.
Mapping of this combined survey is scheduled to commence in early 2009 and drilling locations will be selected before the end of the first quarter 2009. A more definite timetable for rig mobilization and drilling will be announced as drilling locations are finalised by the end of the first quarter 2009.
Range notes that the current world financial crisis combined with recent low oil prices has meant that rig availability has increased significantly while budgeted drilling costs have decreased significantly, thereby providing Africa Oil greater flexibility in finalizing its program.
Range has commenced contributions to the expenditure program on the Dharoor Valley (subject to finalization of cost allocation under the joint operating agreement with Africa Oil). It should be noted that Africa Oil's expenditure to date includes a rig mobilization fee and purchase and delivery of inventory (mainly well heads and casing) sufficient for 4 wells.
Work is underway to compile and review previously collected seismic data in order to design a new 2D seismic acquisition program for Puntland's offshore oil and gas areas. Discussions regarding possible joint ventures with third parties are expected to be finalised first quarter 2009. The key point to note is that, in line with the world economic situation referred to above, the proposed costs of any proposed offshore program have reduced significantly and, to this end, the Company is looking at alternative operators in addition to renegotiating the current offer from the Chinese geophysical group. The Company (with the input of its new management team) believes that one or more joint ventures with industry partners in offshore Puntland would allow the Company to explore while reducing exposure to exploratory risk and significant capital expenditures.
The new management team are promoting Range at the NAPE expo in Houston, Texas for the first time in February 2009. The Board remains confident that the oil and gas potential of offshore Puntland matches that of other successfully developed international offshore oil and gas areas.
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