Edison Investment Research comments on Range Resources' oil frontier potential in Somalia’s Puntland.
Edison Investment Research described Range Resources (LON:RRL, ASX:RRS) as primarily a frontier exploration play, with a growing and potentially cash-generative US adjunct. The research house believes that the company’s 20% stake in two large licence blocks in Puntland, Somalia, could prove to be a ‘company-maker’.
“Puntland is believed to be one of the last remaining lightly explored onshore regions that have large sedimentary basins capable of hosting multi-billion barrel reserves. Puntland’s sedimentary basins are considered analogous to the prolific petroleum producing basins to the north in Yemen”, Edison state.
According to Edison, Range Resources is now entering a very interesting phase, with a wildcat well scheduled for late 2010 in Somalia. “We believe un-risked recoverable reserves could be around 4.6bn bbls based on independent assessments of oil initially in place of 18.2bn bbls”.
Elsewhere, Edison said that Range Resources has a ‘quasi-frontier’ zone at its early stage exploration project in the Republic of Georgia. Range’s JV with Strait Oil & Gas holds two very large licence blocks - V1a and V1b - covering 7,000km2 in the middle of Georgia. Edison also noted a ‘tentative’ estimate, carried out by RPS Energy, of 383mmbbls potentially recoverable resources from 14 prospects in V1a.
“Significantly, in addition to the oil potential, the review pointed to the prospectivity of the blocks for both conventional natural gas and coal bed methane.”
In terms of the Range Resources share price, Edison said that the ‘stock is still very much at the undiscovered stage and reflects little value for the Puntland and Georgia plays’. According to Edison, Range Resources can justify a valuation of £137m, equating to 15.5p/share.
Range Resources
Range Resources Limited (“Range” or “the Company”) is an ASX (ASX: RRS RRSOA) and AIM (AIM: RRL) listed exploration Company, with its principal activity directed towards finding and delineating natural resources in the oil, gas and mineral sectors in Puntland, Somalia.
Range Resources currently has a 100% interest in the sole and exclusive rights to all mineral and hydrocarbon exploration and development in the Somali state of Puntland which covers an area of approximately 100,000km2. Puntland is believed to have all the geological requirements to become a commercial oil-producing region.
Somalia, and in particular Puntland, remains one of the last under-explored countries that has a high potential for considerable reserves of hydrocarbons which can be subsequently developed for the benefit of both the people of Puntland and Range Shareholders. The Company believes that through the generation of work and government royalties from hydrocarbon and mineral exploration and development numerous social and economic benefits will result.
Source: proactiveinvestors.com
Puntland has no authority to sign any contracts that have not met with the aproval of moqadishu. Range resources are exploiting the lack of proper governement in effect in somalia since 1991.
i vote you stop pretending and follow s.land and seek to totally disfranchise yourself from Somalia.
not the arid deserts of Bari and Eastern Nugaal nor Mudug which falls under somalia territory. The only other oil deposits are in Galgadud.
