Range Resources – Proven Reserves In Trinidad Up 490%

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Range Resources Limited (LSE:RRL) shares shot up 16% to 10.2p this morning following their announcement of a 490% increase in proven reserves at their Trinidad site.  After the initial increase, shares settled down in mid-morning trading, up 7.8% to 9.5p at 10:38 am GMT.

Trinidad Site Proven Valuable

The company’s Proved Reserves in Trinidad were previously reported as 2.6 million barrels, however, following extensive independent engineering studies of their existing oil fields, the reserves were confirmed to hold a total of 15.4 million barrels, a 12.8 million barrel increase.

This increase in reserves follows a recent study of the company’s Beach Marcelle Block. Through its wholly owned subsidiary, Los Bajos Oil Limited, Range Resources is seeking all approvals needed to begin development in early 2012 and intends to commit to a $12 million development program over the next 12 months, according to the statement.

Secondary Reserves Discovered

The independent reserve auditor, Forrest A Garb & Associates, confirmed that significant secondary reserves of oil remained in the Beach Marcelle Field, recoverable through recovery techniques including water flooding. The water flooding program is expected to produce between 1 and 1.5 million barrels of oil per year for the next 8 years, with an attributable valuation of $290 million. This valuation includes estimations for capital and operating expenditure and production taxes, and assumes an oil price of $85 per barrel.

A Message From The Managing Director

Range Resources Managing Director, Peter Landau commented on the news:

“We are extremely delighted with the addition of around 13 million barrels of recoverable oil to the Trinidad Project. Adding 1 – 1.5m barrels per year of production for the first 8 years, whilst not impacting on our other production and exploration initiatives already in place is a significant boost to the Range portfolio.

The development programme to bring these reserves into production will be a key near term focus for Range. This Project will result in the creation of significant local work opportunities and skills development.”

Company Spotlight

Range Resources Limited is an Australian oil and gas exploration company listed on both the AIM and the ASX, with operations in Puntland Somalia, the Republic of Georgia, Texas, and Trinidad.

↑ Range Resources Announcement

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