.

Investor Q&A available on website

22 October 2012
INVESTOR Q&A
Range Resources Limited (“Range” or “the Company”) is pleased to provide its on-going investor Q&A setting out responses to questions from investors, where investors are invited to submit questions via email to the Company. It should be noted that the wording of several questions has been amended (and/or amalgamated) where the Company believed they could better reflect a broader spread of investor interests.
Trinidad & Tobago (“T&T”)
1.
Can you please give an update on status of T&T fiscal terms negotiations? A collective group of farm-out operators is engaged in continuing negotiations, of which Range is part. We are targeting the next 2 months for an agreed position, allowing Range to update its financial models for 2013 and beyond.
2.
What's the current Water Oil Ratio on the MD block Lower Forest Trend? 8% of total daily production of the new wells.
3.
How is the water currently produced dealt with? Treated and disposed of on-site.
4.
Given the upcoming waterflood program, if water produced is currently dealt with offsite, will it be processed and re-injected onsite? We are proposing to utilize all field produced water for injection purposes.
5.
The recently issued Trinidad Consolidated Monthly bulletin (to August) reportedly shows just Rig 1 currently in use. Is this information accurate? During the month of August, Range had three drilling rigs in operation and following the spudding of the MD 248 well, now has 4 rigs in operation. Rig 2 will be placed back into service following current repairs.
6.
Can you please give an update on when Rig 7 will be operational? Expected to be operational in the next 4-8 weeks.
7.
QUN131 was stated as being under test. What is the result of these tests and is this well now in production? The well is under intermittent pump test with a high water cut. It is currently being analyzed for remedial action to shut off the water inflow.
8.
What is the update on MD248 well? Cemented 9 5/8” surface casing at 1022 ft. Rigging up to drill deeper.
9.
When is the update on current production figures? Quarterly production figures will be released with the September quarterly report due end of October.
Puntland
1.
There have been stories in the press stating that the Somali government is looking to give priority to the pre 1991 contractors when awarding exploration licenses offshore next year. How secure is Range’s position with regard the current MOU? There have also been press stories where the Transitional Federal Government (TFG) officials categorically refute the comments of the one TFG official suggesting the pre 1991 return. The position is clear with both the current Puntland constitution and the recently adopted federal Somali constitution. As with onshore licenses, the matter sits with the Puntland Government and we are comfortable with our position of tenure especially given our joint onshore activities over the last 7 years.
Texas
1.
What is the current status of Texas sale - is this still progressing to the stated schedule of sale completion and announcement Nov/Dec 2012? Yes – a number of interested parties have been through the dataroom and are in discussions with the Company’s advisors with regards to finalizing offers for our interest.
Colombia
1.
When do you expect operations to commence in Colombia? The consulta previa process is nearing completion which involves liaison with the various indigenous communities within the license areas. Once completed, the Company expects to initiate preparations for the seismic program, with planned mobilisation to occur early 2013.
2.
It had been stated that a 'target for Range would be to re-enter/twin the well on block Put7 before end 2012. Is this still a target that can/will be met? Did this well flow in the 80s (when it was abandoned in the 80s due to low oil prices), and if so what were the rates or was it plugged prior to TD and assessment? A review of all existing data is currently being completed by third party technical consultants with results available in the next 4-6 weeks. The results of this review will determine the path forward with respect to this well, which may result in initial drilling in 1H 2013.
General
1.
The half yearly accounts show a deferred tax liability of $85,949,107 for Trinidad relating to the acquisition of SOCA. The recent annual report shows this as being $44,146,582 in total. Is the reduction due to amortisation following expenditure - and will we expect to see this reduced to zero (or nearly zero) over the coming year following further planned investment? As disclosed at the half year, the company reflected provisional amounts in the half year accounts, as the business combination accounting was in the process of being finalised and goodwill on acquisition was not yet determined The acquired assets were ‘grossed up’ to reflect the ("Deferred Tax Liability” or “DTL”) difference between the carrying amount for accounting treatment and cost base for tax treatment.
In the annual accounts, Range had made an assessment of goodwill on the acquired assets which was taken from the acquired asset base, thus decreasing the ‘gross up’ in DTL to reflect the goodwill assessment, hence the significant reduction on the DTL between the accounts. As stated in the accounts, on virtually all of the Deferred tax balance, the Group does not have a tax payable in relation to the deferred tax liability at 30 June 2012 and it is anticipated that the deferred taxation liability associated with the business combination will be reduced to nil in the future as the deferred exploration and development costs are amortised in future periods.
2.
Can you give any clarification about recent Loan agreement? Will it involve more dilution? As announced, the Company has the option of repaying the loan either through cash or the issue of the shares, thus providing the Company the flexibility of repayment terms allowing for cash needs / excess cash to be taken into account. The loan was entered into with intention of maximizing the use of debt and minimizing the issue of equity.
3.
Could assurances or clarity be provided that Range will look to use the loan facility ahead of the SEDA facility to prevent dilution, and that the loan will be taken up in the smallest chunks required, to minimise the amount of warrants issued at low prices. See above - the loan was also structured to coincide with any sale completion of Range's Texas interests.
The date for the next Investor Q&A session will be announced on the website depending on the upcoming newsflow of the Company.

Range Resources Q and A – It is all about cash (or lack of it) – sell at 4.75p – target 1.5p

Another month goes by and AIM listed oil producer/explorer Range Resources serves up another investor Q&A. The Range groupies on the Bulletin Board will lap it up, oblivious to the fact that it more or less directly contradicts what the Q&A of just two months ago says. The issue is cash, or rather lack of it. And that is why the shares remain a strong sell at xxp with a target price of 1.5p. Let’s start with the Q&A.

Apparently these are questions sent by Range shareholders to CEO Peter Landau which he endeavours to answer. I start from the premise that Range was more or less out of cash when it announced the other day that it had secured a $15 million loan. That thesis is based on the following analysis from a few weeks ago:

At the year-end the balance sheet showed cash of $10.41 million and net current assets of $14.88 million – with the directors believing the company “is in a strong and stable financial position to expand and grow its current operations”. Well I am not really so sure about that. This company that saw a net cash burn of $70 million in financial year 2012 (call it $6 million a month). Now of course output has risen during the year and it can pare exploration expenditure but the bottom line is that if there was $10.4 million in the kitty (oh heck let’s assume net current assets were 100% converted to cash and call it $14.88 million) at 30th June then three and a third months down the track my guess is that net cash is not a lot different to sod all.

You can read more on that HERE

So we turn to the terms of this loan and today’s Q&A:

Mug Punter: Can you give any clarification about recent Loan agreement? Will it involve more dilution?

Overpaid CEO: As announced, the Company has the option of repaying the loan either through cash or the issue of the shares, thus providing the Company the flexibility of repayment terms allowing for cash needs / excess cash to be taken into account. The loan was entered into with intention of maximizing the use of debt and minimizing the issue of equity.

Mug Punter: Could assurances or clarity be provided that Range will look to use the loan facility ahead of the SEDA facility to prevent dilution, and that the loan will be taken up in the smallest chunks required, to minimise the amount of warrants issued at low prices.

Overpaid CEO: See above – the loan was also structured to coincide with any sale completion of Range’s Texas interests.

I draw your attention to a number of matters.

Firstly the idea that the loan will be drawn down in small chunks to avoid Range having to issue stacks of warrants to whichever shylock provided this expensive debt. Mug punters take note: this company burns cash at a rate of several million dollars a month. If US assets are not sold it will have drawn down all $15 million by very early 2013.

Secondly we now see that Landau is suggesting that the sale of Texas assets could be used to repay the loan. Really? Back in August in the Range Q&A we were offered the following gem:

Mug Punter: Could Range use its debt facility now to purchase stock at current low prices below A$0.08 as part of a small buy back, to discourage share price manipulation?

Overpaid CEO: The current intention would be to utilise any initial debt funding to continue to progress the development of the Company’s assets. Part of any Texas project sale proceeds (if received) would possibly be used for a buy back/ consolidation

So just two months ago we were told that the sale of Texas would go for share buybacks. Now there is no talk of buybacks. Instead Texas will go to repay this (expensive debt)( and fund Range’s ongoing PLC losses/capital programme.

But what of Texas? Er… In August we were told:

Given the usual summer slowdown in the US, the process we are undertaking with an appointed broker should see indicative offers made in September. The US A&D markets are highly liquid, and there are always qualified buyers available. The challenge remains to capture a price for the assets that maximizes shareholder return on the Texas investments while generating capital to be redeployed.

And now:

Mug punter: What is the current status of Texas sale – is this still progressing to the stated schedule of sale completion and announcement Nov/Dec 2012?

Overpaid CEO: Yes – a number of interested parties have been through the dataroom and are in discussions with the Company’s advisors with regards to finalizing offers for our interest

So in fact we do not have a firm offer yet and we are at the end of October. They may strike a deal in November or December but at what price? When will the cash arrive? When it does it will go on clearing down debt and providing the resources for capex and supporting the bloated PLC costs ( c$1.5 million a month). In my view the only share price manipulation going on here was Landau’s talk of share buybacks.

How much will Texas realise? We do not know. Let us say that it is $25 million ( and personally I doubt that). A company that burned $70 million last year and which started October with sod all in the kitty needs more than that. I note today’s Q&A discusses both seismic and drilling in Colombia in H1 2013. That will not come cheap.

As ever the twin issues with Range remain: lack of cash and valuation. Today’s Q&A flags up quite clearly how the story with regard to cash is ever changing and never satisfactory.

As to valuation I remain of the view that this stock is worth no more than 1.5p. That is explained in detail here.

A little late with this gibby.........Came out on Monday, SP has dropped since, stabilised now IMO.

A mega "Deramp"...........1.5p target; that's why he is out of work and lost his investors millions!

Anyway, if, and it is a very BIG if, the share was to drop to 1.5p..........That will be a hell of a lot of shares being bought by me, that is for sure. Too much good to come from Trinidad and Texas sale all IMO.

We just need to let this turbulence settle down.

I am just seeing if the share drops a little further, then I will buy more.......My current average is now 5p so can afford to wait.


Good luck all with this share.......Gerponville18

Released by Edison Investment Research.....25/10/2012

http://www.edisoninvestmentresearch.co.uk/researchreports/Rangeupdate251012.pdf

They tip the share to be worth 13p?


Enjoy the read.



GLA........Gerponville18

Miscellaneous !!!

Still on a slope down, not going to upturn over night. Get the feeling investors will believe the talk when results materialize.

hmm any views on the activity going on in Trinidad lately, Leni & Oil Gas and Bayfield selling up other assets and focusing on TT and merging with another company to expand oil acreage respectively. Does this show that there is a lot of oil out there and RRL are onto something !

Sorry pumden I can't help you, have not got one clue as to what is going on and obviously nobody else has. We will have to sit it out unfortunately carrying an extremely high loss for most of us, for now!!!!

Fox-Davies 9th Nov 2012


May be of some interest, although fell asleep reading it, goes on a bit.


With improvements in TT’s fiscal terms pending, and the sector opening
up to smaller players, Trinidad is fast becoming the “go to” destination
for juniors. Range’s acreage provides a solid springboard for bolstering its
cash flow, and together with Colombia, the Company appears to be
developing an axis around which it could develop a sustainable portfolio.
Following this visit, we are reiterating our 25p Target Price and BUY



http://www.fox-davies.com/media/41917/oil_monitor_091112.pdf?__utma=159696636.629304393.1352668773.1352668773.1352668773.1&__utmb=159696636.1.10.1352668773&__utmc=159696636&__utmx=-&__utmz=159696636.1352668773.1.1.utmcsr=lse.co.uk|utmccn=(referral)|utmcmd=referral|utmcct=/ShareChat.asp&__utmv=-&__utmk=244701765

Georgia, Puntland and Financing Update

Another few squillion shares!

No comments DC - Your Diverse Portfolio has obviously swayed you away from RRL.

89,130,175 new shares to be admitted to
trading on the ASX and AIM. Trading in the new shares is expected to commence
on or around 21 November 2012.

Ouch!

Hi 3m, what can you say ? I'm just keeping a eye on them with a finger on the sell button for if ever they get to my selling price. This company sadly has been disappointment after disappointment. As skinny states '' Another few squillion shares''
IMHVO I dont sadly hold a lot of hope, would love very much to be wrong. Any of yours picking up in these turbulent investor times at the moment. Hope they will go well for you 3m.

Ouch does not come in to it, think we are stuffed for a very long time. Hope you are well in Welsh Wales. Just spent another £27 to irradicate pets which I never see thank Goodness but they love the bait. Extremely Peed Off Me. GL

Agree 3m.

I think you must be feeding them extra tasty bait 3M! We've got a little Welsh visitor in our attic, wakes us up at 6am on the dot. Don't know what it is yet but it sounds like an elephant!

I hope the attic situation relates to bats and not the preverbial other crettins. Golly gosh at least my whatevers are outside. Changed bait from Pasta to some blue blocks bought yet again fron SW Lancs Farmers. Such a shame they are not listed on the stock exchange hahaha!!!!! SWLF. Good Luck Kim.

You too 3M!