Range Resources confirms valuation of Cotton Valley Prospect at US$18m

Oil & gas exploration company Range Resources (ASX: RRS, AIM: RRL) has reported the results of an independent reserves and valuation report on its East Texas Cotton Valley Prospect in Red River County, Texas, carried out by Independent Petroleum Engineers Lonquist & Co LLC.

Range holds a 13.56% interest in East Texas Cotton Valley Prospect, with Crest Resources Inc. as operator. The prospect’s project area covers approximately 1,570 acres encompassing a recent oil discovery.

The reserves report estimates total gross commercially recoverable Reserves (1P, 2P and 3P) of the Prospect as 5.4 mmbbl of oil (attributable to Range – 0.7mmbbls).
The planned multi‐well program is anticipated to move Possible Reserves into the Probable and Proved Reserve categories, with the drilling of a horizontal appraisal well in the field scheduled for Q3 2010.

The independent PW10 discounted cash flow valuation of Range’s net interest stands at US$18m.

Peter Landau, executive director, said "Range is pleased that from an initial investment of US$256k for leasehold acquisition costs, plus an estimated US$220k (Range’s net share) to drill and develop the first well scheduled for 3Q 2010, we have been able to achieve a significant uplift in shareholder value, based on independently assessed reserves and valuations reported on the East Texas Cotton Valley Prospect.”

“We feel that the upcoming appraisal activities will add additional value to Range and complement the company’s existing Texan interests, as we continue to add reserves, production and cash flow to create a balanced portfolio of lower‐risk development and production projects in the US with high potential exploratory prospects in Puntland and Georgia,” Landau added.

Development of the shallow oil reservoir (which is a combination trap type) in the Cotton Valley formation is expected to begin in 3Q 2010, with the drilling of a horizontal appraisal well in the field.