Range Resources Ltd

Range Resources Limited (“Range” or “the Company”) is both an ASX-listed (ASX: RRS) and AIM-listed (AIM: RRL) exploration and production company with assets in Texas- U.S, Republic of Georgia, Trinidad and Puntland- Somalia.
 
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 Puntland Summary

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PostSubject: Puntland Summary   Tue Jun 15, 2010 10:33 pm

Puntland
Range entered into a Heads of Agreement in October 2005 to acquire a 50.1% interest in the sole and exclusive rights to all mineral and hydrocarbon exploration and development in the Somali state of Puntland. In July 2006, the Company reached an agreement to acquire the residual 49.9% interest in the rights to the exploration and development of Puntland’s natural resources.

Somalia is situated in the most northeastern part of Africa; know as ‘the Horn of Africa’. The Democratic State of Puntland is located in the northeastern sector of Somalia and covers approximately 212,000km2. The area is believed to have all the pre-requisites to become a major oil producing province whilst its other mineral potential is largely unexplored.

Somalia, and in particular Puntland, remain one of the last under-explored countries that have high potential for vast reserves of hydrocarbons. During the late 1980’s the State was divided into a number of concessions for oil exploration. Significant exploration was undertaken but this effectively ceased due to political instability that arose in 1991. The mineral potential has been investigated during the 2006 by Range’s team of geologists based in Bosasso on the northern coast .The geological work has identified the potential of large silver rich lead zinc deposits analgous to the Jabali deposit in southern YemenI. The agreements that Range has entered into follow intense negotiations between the Parties and their legal advisors. As part of this process the Parties have satisfied themselves that all previous mining concessions have lapsed.

Oil and Gas Potential
In a 1991 a World Bank coordinated study intended to encourage private investment in the petroleum potential of eight African nations Somalia and the Sudan topped the list of potential commercial oil producers. Sudan is now a producer primarily due to the relatively calmer political climate of that country in the last decade.

The earliest indication of oil in Somalia was a large oil seep southeast of Berbera and several other seeps in various locations within the country. However, early exploration concentrated on an anticline structural approach since this had met with success in the Arabian Peninsula it took the oil companies a number of years to abandon this approach in Somalia. There is no evidence of large scale compressive folding in Somalia and the anticlines in the north of the country appear to be associated with the Miocene separation of Africa and Arabia and hence post-Mesozoic and early Tertiary oil and gas accumulations. Therefore, hydrocarbon accumulations must be sought in older structures and strata graphic traps.

Somalia had been previously identified to possess all the requirements for a petroleum province. Hydrocarbons had been generated in the Jurassic, Cretaceous and Tertiary rocks and has a sedimentary column thickening to 8830m. Many porous reservoirs are known both in carbonate and clastic rocks and various types of traps are believed to be present.

This view was further reinforced in the mid 1980’s following the successful exploration efforts of Hunt Oil Corp across the Gulf of Aden in Yemen. There Hunt discovered multi- billion barrel oil reserves that their geologists believed were part of a great underground rift or valley that arced into and across northern Somalia.

Several major oil companies obtained exploration concessions and conducted considerable exploration and drilling over large parts of the State both onshore and offshore during the late 1980’s and early 90’s. These companies included AGIP, Shell (Pecten), Conoco, Phillips and Amoco.

Range has been able to obtain through Government sources previous exploration documentation relating to the hydrocarbon exploration in the Nogal Valley area in Puntland up until 1991. The documentation includes original seismic tapes, well logs and processed seismic sections identifying major targets found prior to exploration activities ceasing in Somalia. Upon review of the data it was noted that the Nogal Valley area demonstrated:

■Abundant oil shows;
■Thick, high porosity reservoirs;
■Many large structures; and
■An excellent regional seal.
Range believes that the data provides further evidence of the large potential for hydrocarbons in the Nogal and Dharoor Valley areas. The data is currently being reviewed by Range and its JV partner and if possible will be reprocessed with the benefit of modern computer techniques and knowledge gained in the similar basins in Yemen. Range is of the view that this data will prove to be extremely valuable in fast tracking exploration activities in Puntland and commencing the first drilling program.

Mineral Potential
The mineral potential of Puntland was largely unexplored prior to Range’s involvement with some known lead-zinc mineralisation but no proven ore deposits. The Company set up an office in Boosaaso in late 2005 where the minerals exploration program is now based. Mineralisation occurs in the northern area of Puntland which is a rugged arid landscape and access to areas has been logistically difficult and road access is limited. However a number of potential projects have been identified and subsequently visited. During 2006 Range has made significant advances in our understanding as to the regional geology of Puntland and its mineral prospectivity.


During this period, Range has made some significant discoveries of mineralisation at:

■Magia Yahan
■Qandala
■Aantarra

Range has also discovered some interesting anomalous uranium results at Yalho, however, the main potential at Magia Yahan, Qandala and Aantaara is Mesozoic silver rich lead – zinc mineralisation along the lines of the Jabali deposit in Yemen. The potential of these areas for a significant deposit is regarded as quite high.

Exploration and Development
Range’s clearly defined goal has been to facilitate the exploration and commercial development of the State’s natural resources to bring the commensurate benefits to the people of Puntland and shareholders of the Company. It has always been the view of the Company to facilitate the use of third party farm ins and joint ventures to assist in funding its on going obligations under the Heads of Agreement.

In October 2006 Range signed a Memorandum of Understanding with Africa Oil in relation to an US$50m 80% farm in right in the Nogal Basin and Darin Basin Blocks. This has since resulted in a Joint Venture project being formalised between Range and Africa Oil which saw the formal signing of the Product Sharing Agreement between Range, Africa Oil and the Puntland Government take place on 17 January 2007. The formal signing of the PSA cemented the ongoing co-orperative and committed relationship between Range, Africa Oil and the Puntland government and confirmed the willingness of all the parties involved to develop the natural resources of Puntland.

Key terms of the MOU with Africa Oil are as follows:

■Africa Oil will be the Operator of the on shore oil and gas exploration effort with an obligation to spend US$50m to earn an 80% interest in the two main basin areas in Puntland (the Nogal and Darin Basins). The US$50m includes a minimum of 4 exploration wells to be completed (2 in each basin), a sign on bonus to be confirmed upon finalization. There is a further US$3.5m payment upon commercial production. Range free carried until exploration moneys spent;
■Of the Africa Oil 80% farm in right, 20% (in one or both basins) is available to farm out to third parties on terms to be agreed between Range and Africa Oil. Any sign on bonuses with third parties will be split 60% Range, 40% Africa Oil.
Africa Oil is currently reviewing recent data acquired in Puntland consisting of seismic sections and tapes done by Conoco. Upon completion of this review a drilling program can then be determined.
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PostSubject: Re: Puntland Summary   Sat Jun 26, 2010 5:53 am

Those that might be interested in an historical background read may care to read this.
http://bailey83221.livejournal.com/70509.html

Of note is the reference to the quality of the exploration areas here -
"Beginning in 1986, Conoco, along with Amoco, Chevron, Phillips and, briefly, Shell all sought and obtained exploration licenses for northern Somalia from Siad Barre's government. Somalia was soon carved up into concessional blocs, with Conoco, Amoco and Chevron winning the right to explore and exploit the most promising ones."
If you are going to push a drill into the ground in a previous Conoco license area, this is the sort of thing you might like to know before you started. pirat
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