Range acquires producing assets from Trinity in $4.6m deal
(ShareCast News) - Range Resources announced on Friday that it has entered into a binding sale and purchase agreement to acquire certain producing assets from a wholly-owned subsidiary of Trinity Exploration and Production, for a cash consideration of $4.55m.
The AIM-traded firm said it would fund the acquisition from its existing cash resources.
Pursuant to the acquisition, the company would acquire a "significant interest" in two offshore producing licences, Brighton Marine and Point Ligoure-Guapo Bay-Brighton Marine - collectively the 'West Coast Assets'.
Both licences are located offshore the West Coast of Trinidad, the board explained, with a combined current production of approximately 200 bopd.
Range would be the operator of both blocks.
"We are extremely pleased to have agreed a second acquisition of upstream assets this month," said Range Resources chairman Kerry Gu .
"Expansion of our existing portfolio of producing assets in Trinidad will not only provide additional production, cash flows, reserves, drill targets and enhanced oil recovery potential, but it is also expected to result in further improvements to the cost structure across our Trinidad business."
Range said the acquisition increased the company's current production in Trinidad by approximately 33% to over 800 bopd, whilst also increasing its footprint in Trinidad, providing "significant" operational synergies with the company's existing operations.
Net 2P reserves at the assets stood at 2.6 mmbbls, as reported by Trinity as of 31 December 2016.
The West Coast Assets are "profitable at current production levels and oil prices", Range said, as a result of recent optimisation and cost reduction exercises undertaken by Trinity.
They were located near to shore in easily-accessible shallow water, with full infrastructure and facilities in place.
Range claimed there was "significant potential" to increase production through low-risk workovers of existing wells, along with longer-term opportunities to grow reserves and production through further development and exploration activity.
Looking at the figures, the West Coast Assets had a low per barrel acquisition cost of $1.75 per 2P barrel, and Range's board also highlighted the "high working interest" being acquired, at 100% for BM and 70% for PGB.
The board also said the acquisition would provide additional options and drill prospects for the RRDSL drilling business, which was also being acquired by the company.
"We see significant potential within the West Coast Assets to grow production and believe that these assets are highly complementary to our existing portfolio," Kerry Gu said.
"We look forward to welcoming the skilled West Coast operating team to Range."