Range Resources Share Discussion Threads

[thebreadmaker] 24/6/2018 14:10

From 2014 but it’s just as relevant today

Today’s epic disaster of an annual report from Range Resources (RRL) cannot have come as a shock to anyone. Worse is still to come. By any stretch of the imagination Range is vastly overvalued. At 1.07p (last seen), Range is valued at £53.4million. The company has just announced a $102.5million loss, has never been able to cover its costs, has substantially written down the value of its “assets” and has just been forced to borrow another $15million (what happened to the “game-changing” LandOcean deal?!). To top it all off Chief Executive Rory Scott Russell made the hugely embarrassing admission the company is “unlikely to meet [his] previously stated target of an exit rate of 1,000 barrels of oil a day by the end of 2014”. Apparently Mr Scott Russell is now confident of achieving this goal in H1 of 2015. Given the steaming mountain of manure he has had to shovel his way through since he took charge of Range in February, perhaps Mr Scott Russell has earned a little leeway in hitting his production target. This doesn’t change Range’s overvaluation problem. Nor does it solve the cash flow problems. Nor does it answer a far more relevant question. Just what has happened to all of Range’s money?

To Range’s credit, the latest accounts provide a full warts and all view of the company. Believers in “New Range” would do well to read through these thoroughly, including all the notes. Only the most deluded of shareholders will be able to find much positive in this horror story.

It is no wonder Range has shed one third of its value today.

In the long run, the release of this annual report might prove to be an astute move by Mr Scott Russell. As shattering as much of the information will come to those with high averages, one of the most troublesome aspects of “Landau’s Legacy” for Range’s board is the absurd valuation of the company. So long as Range’s market cap is bolstered by the false hopes, dreams and fantasies of long-term holders, no matter what the board does, a market reckoning is inevitable. Range’s market cap cannot defy gravity forever.

As of today, it looks like it is finally coming crashing back down to earth, as reality has dawned. Assuming the share price drops further and reaches a far more realistic level (at least half the current value would be my best guess), then Mr Scott Russell and “New” Range might have a base to start building from.

We shall see about this, but in the meantime extremely serious questions remain about what happened to all of Range’s money?

Remember that over the years, this company has raised tens of millions of pounds from the market. It has also devastated the pensions of countless retail investors. I accept the principle of caveat emptor has to apply to anyone buying shares on AIM, but let’s take a look at the staggering admissions by Range today concerning the multitude of dodgy deals done on its behalf. Some of these are already known, others simply provide more unpalatable details and some are new shockers to digest.

The $8million International Petroleum (IOP) loan – There is no escaping the utter disgrace of this transaction. Mr Scott Russell claims he reached a “a commercially satisfactory outcome”. As much as I want to give Mr Scott Russell a chance, the accounts prove what baloney this statement is.
In Range’s own words “IOP remains suspended from trading on NSX and given the uncertainty over the valuation of the shares once trading resumes, the loan has been written down to US$1,500,000 being the US$500,000 cash receivable as per the agreement plus US$1,000,000 which is equivalent to the Company's 9% shareholding interest in IOP's forecast net cash position following the sale of the Russian assets.“

IOP was in default of this loan. Mr Scott Russell should have taken nothing less than the full value of the outstanding $7.5million (plus interest) in IOP stock. Even though this stock is essentially worthless, the 9% shareholding he accepted looks incredibly weak.

The $13.08million lost in Colombia – Yesterday Range announced its relinquishment of its interest in the PUT-6 license, Colombia. In withdrawing from this project, Range surrendered the $3.48million performance bond (which has been appearing in Range’s cash balances for the last year or so, ho, ho, ho). It also had to write off the $9.6million spent on exploration.
Moving forward, I see the sense in this move by Range. It removes a huge future financial liability from the company’s budget, in terms of what it would have been expected to pay towards further work. But what about the so-called farm-out that was meant to be happening here? What about the $13million the company has wasted on this project? Of this $13million, how much was spent on corporate advisory fees I wonder…

The $37.2million write down of the Georgian and Texan “assets” – this is a corker, an absolute corker. According to the accounts, Range now values its holdings in Strait Oil & Gas (Georgia) and its Texan properties at $10,000,000 and $1,000,000 respectively. Rumours abound that Range (and Red Emperor) are on the verge of a $50million (or whatever the absurd figure being bandied about is) deal to sells their Georgian holdings. Given that accounting valuation rarely match up to transactional valuations, I’d be amazed if Range recoups even half the $10,000,000 it now claims its holding in Strait is worth. That is, if it can even find a buyer at all.
And then there is Texas. Oh Texas, what sadness are the fading memories of claims you were going to be sold for “$30mlllion221;, “$20million221;, “sorry, it’s back on the market”. Now Range values these “assets” at $1million. In other words they’re yours for a quid!

The $2.5million impairment to trade and other receivables – This just looks so bad. Generating revenue is challenging enough for Range, so it is most unwelcome news to hear that even when it issues invoices some of its customers or other debtors refuse or are unable to pay. In the grand scheme of a $102.5million loss, this $2.5million impairment looks like small change. But consider for a moment that in the last financial year Range’s total oil sales only equaled $21.2million….
The bloated cost base– Life is too short to itemise the individual amounts that Range spent on consultants, professional services and lawyers in the last financial year. Even so, of the millions that bled from the company in fees there are a few notable items worth mentioning.
Peter Landau earned $823,516 over 2013/14 and Okap Ventures scooped another $780,000. This is just too outrageous for words and I’m actually laughing writing this part.
$2.1million was spent on corporate advisory fees in relation to finance, up from $0 the year before. This is another laughable figure, when you consider the shocking state of Range’s finances.
$1.1million spent on travel; perhaps a little less time needs to be spent in the business lounge by certain directors and a little more time in cattle class, methinks.
The $3.5million lost in an equity swap, with Yorkville Advisors – Given how Range’s share price has cratered this isn’t too surprising, but it is yet another failed financial transaction from the Landau years.
The $7.3million spent on royalties – Perhaps I’ve saved the worst until last, but when you consider that Range sold $21.2million worth of oil, this means that one third of this evaporated in royalty payments. Interestingly enough it appears that Range didn’t explicitly say how much it paid in royalties in its 2013 accounts, but rather seems to have elected to these in with “costs of production”. Make of that what you will…
As appalling as the list above is, this isn’t the main problem facing Range’s shareholders today. Serious questions should be asked about where a lot of that money went, but it has now gone (apart from the royalty payments, which will be recurring). Range’s shareholders will try to look to the future.

This is where Mr Scott Russell’s admission that Range is not likely to hit 1,000bopd this year becomes a serious problem. A cursory glance at the cash flow statements reveals how dependent Range is on external funding to stay afloat. Without loans and equity investment this company cannot pay its costs.

In the last financial year, net cash outflow from operating activities was $6.2million. This was better than the $12.4million the year before, but hardly does much to lend support to the valuation case for Range.

Worse still was the net cash outflow from investing activities, which was $8.1million. Again this was an improvement on the $30.7million Range bled in the previous year, but if it weren’t for the $15.6million net cash inflow from financing activities (down from $34.3million in 2012/13) then this business would no longer exist.

This isn’t a matter of opinion.

This is a cold, hard fact.

Supporters of the company will claim that this is another backward looking view of the company. This is misguided.

In the last financial year “revenue from sale of hydrocarbons” was $21.2million. Total costs of sales were $24.8million and general and administrative expenses were $14.5million. This leaves a notional deficit of $18.1million. It is true that there is a lot of fat Range’s board can trim from the PLC costs (oh, those poor professional advisors, what will they do to survive?), but it is clear that improved operational performance in Trinidad isn’t just a nice to have. It is a vital necessity.

Thanks to the foresight of those in charge of the Australian Securities Exchange (London Stock Exchange please take note) we shall see, in a month, the next set of quarterly production figures for Range. Anything other than at least a small improvement in production will be a major disappointment, no matter what spin is put on it.

The numbers don’t lie. Unfortunately sometimes those producing them do.

[martini069] 24/6/2018 13:30

24th May 2018 RNS

RANGE EXCEEDS PRODUCTION TARGETS

[1manos] 24/6/2018 11:34

Trash talking is done by boxers trying to sell tickets.

Can't think of anyone trying to sell this pos to anyone daft enough to listen ha ha. Oh hang on. Slack Alice has... Doh lolzzzzzzzzz.

Right off to the high main the one on shields Rd ha ha

[thebreadmaker] 24/6/2018 11:26

Good report - doesn’t make great reading

hxxps://simplywall.st/news/is-range-resources-limited-asxrrs-a-financially-sound-company/

[thebreadmaker] 24/6/2018 11:20

From 2014 but it’s just as relevant today

Today’s epic disaster of an annual report from Range Resources (RRL) cannot have come as a shock to anyone. Worse is still to come. By any stretch of the imagination Range is vastly overvalued. At 1.07p (last seen), Range is valued at £53.4million. The company has just announced a $102.5million loss, has never been able to cover its costs, has substantially written down the value of its “assets” and has just been forced to borrow another $15million (what happened to the “game-changing” LandOcean deal?!). To top it all off Chief Executive Rory Scott Russell made the hugely embarrassing admission the company is “unlikely to meet [his] previously stated target of an exit rate of 1,000 barrels of oil a day by the end of 2014”. Apparently Mr Scott Russell is now confident of achieving this goal in H1 of 2015. Given the steaming mountain of manure he has had to shovel his way through since he took charge of Range in February, perhaps Mr Scott Russell has earned a little leeway in hitting his production target. This doesn’t change Range’s overvaluation problem. Nor does it solve the cash flow problems. Nor does it answer a far more relevant question. Just what has happened to all of Range’s money?

To Range’s credit, the latest accounts provide a full warts and all view of the company. Believers in “New Range” would do well to read through these thoroughly, including all the notes. Only the most deluded of shareholders will be able to find much positive in this horror story.

It is no wonder Range has shed one third of its value today.

In the long run, the release of this annual report might prove to be an astute move by Mr Scott Russell. As shattering as much of the information will come to those with high averages, one of the most troublesome aspects of “Landau’s Legacy” for Range’s board is the absurd valuation of the company. So long as Range’s market cap is bolstered by the false hopes, dreams and fantasies of long-term holders, no matter what the board does, a market reckoning is inevitable. Range’s market cap cannot defy gravity forever.

As of today, it looks like it is finally coming crashing back down to earth, as reality has dawned. Assuming the share price drops further and reaches a far more realistic level (at least half the current value would be my best guess), then Mr Scott Russell and “New” Range might have a base to start building from.

We shall see about this, but in the meantime extremely serious questions remain about what happened to all of Range’s money?

Remember that over the years, this company has raised tens of millions of pounds from the market. It has also devastated the pensions of countless retail investors. I accept the principle of caveat emptor has to apply to anyone buying shares on AIM, but let’s take a look at the staggering admissions by Range today concerning the multitude of dodgy deals done on its behalf. Some of these are already known, others simply provide more unpalatable details and some are new shockers to digest.

The $8million International Petroleum (IOP) loan – There is no escaping the utter disgrace of this transaction. Mr Scott Russell claims he reached a “a commercially satisfactory outcome”. As much as I want to give Mr Scott Russell a chance, the accounts prove what baloney this statement is.
In Range’s own words “IOP remains suspended from trading on NSX and given the uncertainty over the valuation of the shares once trading resumes, the loan has been written down to US$1,500,000 being the US$500,000 cash receivable as per the agreement plus US$1,000,000 which is equivalent to the Company's 9% shareholding interest in IOP's forecast net cash position following the sale of the Russian assets.“

IOP was in default of this loan. Mr Scott Russell should have taken nothing less than the full value of the outstanding $7.5million (plus interest) in IOP stock. Even though this stock is essentially worthless, the 9% shareholding he accepted looks incredibly weak.

The $13.08million lost in Colombia – Yesterday Range announced its relinquishment of its interest in the PUT-6 license, Colombia. In withdrawing from this project, Range surrendered the $3.48million performance bond (which has been appearing in Range’s cash balances for the last year or so, ho, ho, ho). It also had to write off the $9.6million spent on exploration.
Moving forward, I see the sense in this move by Range. It removes a huge future financial liability from the company’s budget, in terms of what it would have been expected to pay towards further work. But what about the so-called farm-out that was meant to be happening here? What about the $13million the company has wasted on this project? Of this $13million, how much was spent on corporate advisory fees I wonder…

The $37.2million write down of the Georgian and Texan “assets” – this is a corker, an absolute corker. According to the accounts, Range now values its holdings in Strait Oil & Gas (Georgia) and its Texan properties at $10,000,000 and $1,000,000 respectively. Rumours abound that Range (and Red Emperor) are on the verge of a $50million (or whatever the absurd figure being bandied about is) deal to sells their Georgian holdings. Given that accounting valuation rarely match up to transactional valuations, I’d be amazed if Range recoups even half the $10,000,000 it now claims its holding in Strait is worth. That is, if it can even find a buyer at all.
And then there is Texas. Oh Texas, what sadness are the fading memories of claims you were going to be sold for “$30mlllion221;, “$20million221;, “sorry, it’s back on the market”. Now Range values these “assets” at $1million. In other words they’re yours for a quid!

The $2.5million impairment to trade and other receivables – This just looks so bad. Generating revenue is challenging enough for Range, so it is most unwelcome news to hear that even when it issues invoices some of its customers or other debtors refuse or are unable to pay. In the grand scheme of a $102.5million loss, this $2.5million impairment looks like small change. But consider for a moment that in the last financial year Range’s total oil sales only equaled $21.2million….
The bloated cost base– Life is too short to itemise the individual amounts that Range spent on consultants, professional services and lawyers in the last financial year. Even so, of the millions that bled from the company in fees there are a few notable items worth mentioning.
Peter Landau earned $823,516 over 2013/14 and Okap Ventures scooped another $780,000. This is just too outrageous for words and I’m actually laughing writing this part.
$2.1million was spent on corporate advisory fees in relation to finance, up from $0 the year before. This is another laughable figure, when you consider the shocking state of Range’s finances.
$1.1million spent on travel; perhaps a little less time needs to be spent in the business lounge by certain directors and a little more time in cattle class, methinks.
The $3.5million lost in an equity swap, with Yorkville Advisors – Given how Range’s share price has cratered this isn’t too surprising, but it is yet another failed financial transaction from the Landau years.
The $7.3million spent on royalties – Perhaps I’ve saved the worst until last, but when you consider that Range sold $21.2million worth of oil, this means that one third of this evaporated in royalty payments. Interestingly enough it appears that Range didn’t explicitly say how much it paid in royalties in its 2013 accounts, but rather seems to have elected to these in with “costs of production”. Make of that what you will…
As appalling as the list above is, this isn’t the main problem facing Range’s shareholders today. Serious questions should be asked about where a lot of that money went, but it has now gone (apart from the royalty payments, which will be recurring). Range’s shareholders will try to look to the future.

This is where Mr Scott Russell’s admission that Range is not likely to hit 1,000bopd this year becomes a serious problem. A cursory glance at the cash flow statements reveals how dependent Range is on external funding to stay afloat. Without loans and equity investment this company cannot pay its costs.

In the last financial year, net cash outflow from operating activities was $6.2million. This was better than the $12.4million the year before, but hardly does much to lend support to the valuation case for Range.

Worse still was the net cash outflow from investing activities, which was $8.1million. Again this was an improvement on the $30.7million Range bled in the previous year, but if it weren’t for the $15.6million net cash inflow from financing activities (down from $34.3million in 2012/13) then this business would no longer exist.

This isn’t a matter of opinion.

This is a cold, hard fact.

Supporters of the company will claim that this is another backward looking view of the company. This is misguided.

In the last financial year “revenue from sale of hydrocarbons” was $21.2million. Total costs of sales were $24.8million and general and administrative expenses were $14.5million. This leaves a notional deficit of $18.1million. It is true that there is a lot of fat Range’s board can trim from the PLC costs (oh, those poor professional advisors, what will they do to survive?), but it is clear that improved operational performance in Trinidad isn’t just a nice to have. It is a vital necessity.

Thanks to the foresight of those in charge of the Australian Securities Exchange (London Stock Exchange please take note) we shall see, in a month, the next set of quarterly production figures for Range. Anything other than at least a small improvement in production will be a major disappointment, no matter what spin is put on it.

The numbers don’t lie. Unfortunately sometimes those producing them do.

[thebreadmaker] 24/6/2018 10:49

Don’t worry. All it is a 100:1 share consolidation and shares are technically 0.0576

It all makes sense to me

[1manos] 24/6/2018 10:43

Their averages are all over the shop as RB has shown up.
I do believe it's jolly bad form to mislead.
But the trail is still there in black n white, ( good colours)

No they would be buying up and highlighting their buys
At these 0,17 to 0,20 SP, s.
Actions speak louder than words.... DYOR IMHO the value of rrl can go sideways, as well as down.

[lewisyfawr] 24/6/2018 10:29

On posts on LSE this morning, current share price is showing as 57.6p. Now I am the last person to ramp or deramp Range, and have never known them exceed 2.75p in over 4 years, and usually well below a penny. Might be a mistake, although 57.6p is stated as a fact, and trashers love facts.

It made me smile, and dreaming what I could buy if I managed to sell at 57.6p. Think I would sell 1000 for 576 pounds and keep rest and hope for a pound party. :-)

[thebreadmaker] 24/6/2018 09:48

Lewis - I won’t buy Range shares with stolen money let alone my own but you keep taking your medication and believe what you want

You aren’t even buying otherwise you would of taken my charity bet on but you bottled it as you know this is go 0.15 in the near future

[1manos] 24/6/2018 09:12

Hahaha here he goes.
Mr. 3 average

[1manos] 24/6/2018 09:09

Think the lemon munchers will be choking on their sugar puffs.

Expect some heavy artillery.. Well a few cut and paste Malcys Frog blogs.

Proud to be a troll Coz the truth hurts

[lewisyfawr] 24/6/2018 09:05

All seems to be going so well at moment. Predict those trying to trash this board will buy a few this week and go mysteriously quiet for a few months.

[skinwalker] 24/6/2018 09:05

Nodding donkey? Is that one of Coco's multiple IDs?

[thebreadmaker] 24/6/2018 09:02

If everybody highlights the issues with Range and the posts by the Welsh mafia hopefully nobody will be sucked in and lose money on this share

[thebreadmaker] 24/6/2018 08:22

Natural Resources

Corruption in the natural resources sector is rampant in Indonesia. The lack of law enforcement in Indonesia promotes an enabling environment both for irregular activities and for opaque financial reporting by petroleum and mining companies, fostering corruption in the extractive industries; the 2009 Mining Law eliminated a requirement for mining contracts to be publicly available (NRGI 2017). A variety of governments regulations has made doing business in the natural resources sector difficult; as a result, Indonesia ranks near the bottom (91st out of 109) of the world’s mining countries in the Fraser Institute’s Mining Policy Perception Index (ICS 2016). An absence of any central authority to issue licenses concerning natural resource development has led to a vast problem with overlapping licenses; at times up to four licenses for the same concession have been granted to palm oil, pulpwood, logging, and coal mining companies (The Guardian, Apr. 2016). Officials, particularly close to election time, have been known to exchange land rights for financial contributions to their campaigns (The Guardian, Apr. 2016).

Extract from this report

hxxps://www.business-anti-corruption.com/country-profiles/indonesia/



Indonesia’s anti-corruption enforcement agency, the KPK, has been investigating corruption in over 4,000 mines nationwide and has shut down 721 mines so far after instituting a requirement for a so-called ‘clean-and-clear’ certificate (Greenpeace, Feb. 2016). As of March 2017, 3,203 companies are still operating without such a certificate; although lack of communication between miners and local authorities has also been blamed for this process (Indonesia Investments, Mar. 2017). Part of the problem is the decentralization of government tasks; it led to officials issuing more than 10,000 licenses, possibly motivated by rent-seeking behavior, some of which overlapped (Indonesia Investments, Mar. 2017).

[thebreadmaker] 24/6/2018 08:19

Would you want your company investing in this sector and country?

hxxps://thediplomat.com/2018/04/why-indonesias-energy-sector-is-so-corrupt/

[thebreadmaker] 24/6/2018 08:11

Thanks Manos

No awards for Range. I wonder why

hxxp://www.ttenergyconference.org/annual-awards/

[1manos] 24/6/2018 08:08

Some great research from TBM

Just goes to show how proper research can help investors.
Of course if you cannot read good research and are prone to lop sided oil views.

This good lead you to make horrendously bad investing decisions in fact it could lead you to go totally bonkers.

[thebreadmaker] 24/6/2018 07:51

A map to show how insignificant Range are in T&T

hxxp://ngc.co.tt/wp-content/uploads/pdf/publications/Energy-Map-of-Trinidad-Tobago-2017.pdf

[thebreadmaker] 24/6/2018 07:39

hxxps://oilprice.com/Energy/Energy-General/The-Fed-Is-Driving-Down-Oil-Prices.html

[thebreadmaker] 24/6/2018 07:34

With an over supply of oil I can see the oil price drifting down under $60 a barrel

[thebreadmaker] 23/6/2018 14:40

Ragingbear - be careful if you receive an invite to meet at a service station in South Wales!!

[lewisyfawr] 23/6/2018 14:36

Think Q&A can be useful for those that want to read the company spin. And potential investors would struggle to find anything on the boards - which are now quiet or spammed.
There is so much more the company could do. Obviously they have loads of investors on LSE and I guess many of those will be London centric (suspect manos might live in South Kensington and support Chelsea). Very few in Oz and yet AGM and office is there - and miles from anywhere in Perth.
I would like to see Eva organising a new progress video to support end of year results and perhaps a session in London to show and discuss video(her and Nick and Trinidad Chief Officer), one in Oz (perhaps Melbourne) with CEO and Chairman and same in China. You get the feeling that Lenigas (or CERP) and Trinity Mirror are much better at communication. They appear to see shareholders as key stakeholders, which we are. And we have ideas and knowledge - which just might be helpful to the current Board.