Thursday, August 30, 2012
Range Resources Limited provides the following update on the Shabeel North well currently being drilled in Puntland, Somalia by the Company's Joint Venture Operator, Horn Petroleum Corp. (TSXV:HRN).
The Shabeel North well has reached a total depth of 3,945 meters and has encountered metamorphic basement at a depth of 3,919 meters. The well penetrated 149 meters of interbedded sands and shales of the Triassic Adigrat Formation with no oil or gas shows and only minor porosity exhibited on electric logs.
Accordingly, the well is being plugged. As noted in a previous Puntland drilling update, the Upper Cretaceous Jesomma sands did exhibit porosity and hydrocarbon shows but produced only fresh water on a drill stem test. These sands are similar to the Jesomma sands encountered in the previously drilled Shabeel well in respect of log response and oil and gas shows. It has therefore been determined that additional testing of these zones in the previously drilled Shabeel well is also not warranted.
Based on the encouragement provided by the Shabeel wells, the Operator (Horn Petroleum Corporation) and their partners, Range Resources and Red Emperor, plan to enter the next exploration period in both the Nugaal and Dharoor Valley Production Sharing Contracts ('PSC's) which carry a commitment to drill one well in each block within an additional 3 year term.
The current operational plan would be to contract a seismic crew to acquire additional data in the Dharoor Valley block and to hold discussions with the Puntland Government to gain access regarding drill ready prospects in the Nugaal Valley block. The focus of the Dharoor seismic program will be to delineate new structural prospects for the upcoming drilling campaign.
Keith Hill, President and CEO of Africa Oil, commented, 'While we were disappointed that we were not able to flow oil from the first two exploration wells in our Puntland (Somalia) drilling campaign, we remain highly encouraged that all of the critical elements exist for oil accumulations, namely a working petroleum system, good quality reservoirs and thick seal rocks.
We look forward to working with the Puntland government to move our exploration project to the next phase which will likely require us to focus on prospects in different areas of the basins. One should keep in perspective that it often takes a number of wells to find commercial hydrocarbons and we plan to continue our aggressive program to unlock the potential of this highly prospective region.'
Peter Landau, Executive Director of Range Resources noted, 'All the participants in the historic two well program in Puntland are disappointed that we didn't strike a commercial discovery first up. What shouldn't be underestimated is the achievement by both the Puntland Government and the joint venture in getting the 2 wells drilled and, more importantly, the continuing exploration program which should see another 2 wells drilled over the next 12 - 18 months.
From a Range perspective, the continued focus on Trinidad production and development, the exploration programs in Colombia and Georgia, and the Texas sale process will drive the Company moving forward in the short to the medium term. We will update shareholders later in the week with numerous positive developments in Trinidad and look forward to the imminent growth of our flagship Trinidad Projects both from a daily production and P1 Reserve perspective.'