Range Resources Share Discussion Threads

[thebreadmaker] 24/6/2018 19:30

Filter looks like it’s broke again lads

Why don’t you be honest and admit you can’t help yourselves looking at the posts in case I mention you?

You love the attention :)

[thebreadmaker] 24/6/2018 19:28

Great day in the sun watching England win at Cricket & Football

Tomorrow is another day with share price drop for Range when market opens

[lewisyfawr] 24/6/2018 18:21

I actually knew all that history that has spammed our board today. And I bought my first Range shares despite all of that. Probably because I had been told RSR was a sound finance man who would make a good CEO of Range. And I think he did very well in first few months and showed the Landau critics and RIG what could happen.
But the pressure of running Range is so intense and RSR was so often in media spotlight. I did not like the way that Chinese lady disrupted the AGM in Perth that led to RSR going and Chinese investment and Chinese management coming. And I hated the two supensions. But the new management clearly know what they are doing. They are turning the company round quite quickly, being quite hawkish about what Range can achieve and are largely ignoring critical voices off.
Have always enjoyed holding Range shares, even if made little or no money from them. But really enjoying holding them now and over next couple of years. It is like backing Foinavon at 200-1 for the Grand National. Worst thing is he falls and you lose your 10 pound stake. Upside is that you are very lucky and he romps in at 200-1 and you get a fistful of cash.
With price of oil and water flood and lots of excellent acreage, I feel that Range is a very lucky company. DYOR.

[celticheart07] 24/6/2018 18:11

Hi Lewis/Martini, Had a great day today in the sunshine, listening to live music. Came back to see a torrent of posts by thebreadmaker, not read a single post, why would I? Release date for the next quarterlies is July 31st, should make for good reading. Back out into the garden for an alfresco supper, catch you both soon.

[lewisyfawr] 24/6/2018 17:59

Nice post Martini. Had a look at one of the very many long historic cut and posts today from manos and they still have their heads stuck in 2013 and earlier. He sits in his mansion in S Kensington spewing out history lessons instead of having a jog round one of royal parks in the brilliant sunshine.

Price of our shares appears to be 57.6p a share according to LSE this morning. Sure manos will say that LSE price is not correct and price will open tomorrow at less than that. Self-fulfilling prophecy. They are always right, it seems.

[thebreadmaker] 24/6/2018 17:13

Still relevant today - Waterflood anyone?

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.

[thebreadmaker] 24/6/2018 17:12

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.

[thebreadmaker] 24/6/2018 17:12

So true from report

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.

[thebreadmaker] 24/6/2018 17:10

As Lewis is trying to stop posts here you go fellow posters

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 17:09

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

[martini069] 24/6/2018 16:57

Lewis

Its good to look back at previous full year financial reports - I say that because of the comparison from 2017 full year report and what we can expect in 2018

2017 Full Year Write off in P&L Account of Goodwill $28,985,014 (note 16 in accounts)
2018 Full Year Write off in P&L Account of Goodwill $ 0 (all written off in previous few years)

2017 Full Year P&L Revenue from Operations $ 8,435,309
2018 Full Year P&L Revenue from operations :
Qtr to Sept 17 $2.30m
Qtr to Dec 17 $2.70m
Qtr to Mar 18 $3.52m
Qtr to Jun 18 $4.00m MIN (90 days @ 800bopd ave x $65.50 WTI = $4.7m GROSS
So 218 is est to be 2.30 + 2.70 + 3.52 + 4.00 = $12.52m to $13.00m
As 2017 was $8.435 & 2018 $12.52 MIN thats $4.09m MIN increase or equiv of a MIN 48% INCREASE - as I have been saying for some time - approx 50% increase in Income & P&L better off by $29m by no write offs this year (all written off after last year)

BOPD
2017 Full year average was 522 barrels
2018 Full year average will be about 685 average (assuming 800 in current quarter)
I make that an INCREASE of 163 bopd per day or 31% INCREASE

BRING ON THE FULL YEAR ACCOUNTS

[lewisyfawr] 24/6/2018 16:26

Another history lesson from years ago. No relevance whatsoever to 2018. Or 2017. Or 2016. Or 2015. Or 2014. Or 2019. Or 2020. Board different, borrowing different, many shareholders probably different and have bought between .2p and .5p and wonder what these trolls keep on about.

[lewisyfawr] 24/6/2018 16:25

14:37 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 14:37

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 14:25

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 14:11

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 14:11

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 14:11

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.