(MENAFN - ProactiveInvestors - Australia) Range Resources (ASX: RRS) continues to unlock the value of its Trinidad assets with the discovery of a new oil reservoir and the addition of another oil producing well.
"We are extremely pleased with the results of the ongoing drilling program in Trinidad, and particularly with the discovery of new oil reservoir." executive director Peter Landau said.
"The QUN 135 well confirms once again that the development potential on Range's Trinidad blocks remains largely untapped.
"Once production testing of this new zone is complete, we will make a determination as to how best to develop the reservoir as part of our expanding portfolio of exploratory, development, and secondary recovery opportunities in Trinidad."
QUN 135 had intersected 50 feet of previously unseen oil pay in the Middle Cruse Formation with porosities in the 2123% range.
Notably, offset well control indicates that the identified reservoir section has significant areal extent.
Production casing has been run and Range will now starting testing operations.
Range had previously encountered more than 80 feet of net oil pay in the Lower Forest, Upper Cruse and Middle Cruse formations after drilling QUN 135 to a depth of 3,500 feet before deciding to deepen the well when logging indicated the presence of additional resistive oil sands.
Lower Forest Development Update
Range has also enjoyed further successes with shallow wells targeting the Lower Forest Formation with the QUN 138 well successfully perforated and placed into production at initial rates of about 85 barrels per day (bpd) of oil over the first five days on a 6/23 inch choke.
Well performance will be monitored and the company may look to increase the choke size to increase output depending on the performance of the well.
The company has also intersected 70 feet of high resistive oil sands in addition to 190 feet of lower resistive oil sands in the Lower Forest at the QUN 139 well.
Casing has been set and cemented and approvals received to perforate the well and be placed into production later this week.
Importantly for Range, QUN 139 is contiguous to the QUN 119 and QUN 129 wells that had produced at initial rates of 129bpd and 138bpd under natural pressure respectively with current production of 45bpd and 65bpd of oil.
Approvals have been received to start drilling of the QUN 140 and QUN 141 wells, which will continue the development of the Lower Forest trend, being contiguous and updip to the recently completed and successful QUN 138 well.
Range is also looking to start remedial work on four wells that have experienced comingling of oil and water sands. This is expected to improve the performance of the wells and add further to production.
The company will use a small workover rig to carry out the work, which will also include additional perforations at two of the four wells.
As part of this, Range has perforated the Lower Cruse formation of the QUN 133 well, which experienced oil and water sands comingling in the Upper Cruse and will now assess performance under pump.
Range had advised earlier this month that it is working to regain the drilling and completion momentum established during the third quarter of 2012 by having all six of its rigs up and running as soon as possible.
As such, it expects to bring 10 to 12 new wells into production at its Trinidad operations during this quarter, well above the five wells completed in the fourth quarter.
Further updates are also due shortly on the progress of the MD 248 well, finalisation of the sale of its Texas interests, the finalisation of the GIG joint venture in Georgia as well as well performance in Guatemala.
Taking Range's ongoing successes in adding new producing wells and the prospect of considerable increase in the number of wells being completed during the current quarter, the company appears set to mark a sizeable production increase in the short term.
This is further reinforced by the discovery of a new oil reservoir as well as workovers of existing wells.
With these catalysts in play, Range Resources appears to be an affordable buy at the current price of A0.056.