Range Inks MOU with Taqah to Farm-In to Oman Block 57
The Board of Range Metals Inc. announced that its wholly-owned subsidiary Range Oil and Gas Inc. has entered into a Memorandum of Understanding with Taqah Oil Exploration to farm in to exploration block 57 in Oman.
Under the MOU, Range will pay 100% of the costs associated with drilling up to 3 exploration wells on Block 57 and will earn a 50% working interest in the Block. The total cost of the program is estimated to be in the order of US$ 14 million. Range will be appointed operator of the Block, subject to Oman Government approval.
Block 57 is held under a Production Sharing Agreement entered into between Taqah and the Oman Ministry of Oil in 2006, and is located on the west flank of the prolific south Oman salt basin, close to existing oil production infrastructure.
Roger Bethell, geologist and director of Range Oil and Gas, believes that this area of Oman is analogous to the Mississippian sub crop play in Eastern Saskatchewan where unconformity traps contain several billion barrels of oil. The current seismic coverage with 2800km of 2D seismic and 31km of 3D seismic over Block 57 indicates 16 prospect leads with three of them having sufficient control to elevate them to drillable prospects. An ongoing seismic program is planned to upgrade the other leads to drillable targets.
The three initial wells are targeting unconformity traps in the Upper and Lower Khuff reservoirs. The first two wells will be drilled to approximately 1500 meters, and the third well to 3,400 meters to test deeper targets. Sub crop plays of the magnitude identified by seismic in this area of Oman may, by analogy with similar geological areas, contain large reserves of hydrocarbons.
The transaction is subject to agreement on definitive documentation, necessary regulatory and government consents and Range's ability to raise the funds necessary to advance the project. Range is in final negotiations with a Canadian brokerage house to provide the necessary financing for the project.
Don Sheldon, Chairman of Range Metals, stated, "We are delighted to have entered into this agreement with Taqah to pursue a high quality exploration opportunity. The opportunity was made available to Range through the efforts of Mr. Ala Nuseibeh (recently appointed to the Board of Range Oil and Gas), and we expect this to be he first of a series of opportunities generated for the benefit of shareholders.
"Within the next few days I hope to announce an additional senior appointment to the Board, which will emphasise the experience and access available to the Company."