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Chinese insurer lends Range US$50m

Published: 
Friday, January 2, 2015

Onshore T&T explorer, London-listed Range Resources Limited expects to pump 3,000 barrels of crude oil per day from its Beach Marcelle acreage in deep south Trinidad, the company announced in an update on the London Stock Exchange (LSE).

Range also told investors it has secured funding for Beach Marcelle and other waterflood projects “through (a) US$50 million credit facility with Sinosure.” State-owned Sinosure is also known as the China Export and Credit Insurance Corporation.

Range also announced Tuesday that with LandOcean, it is “finalising proposed plans for extended waterflooding of its Trinidad licences, with subsurface studies successfully completed.” The next key step in the waterflood programme will be commencement of surface studies which will include well integrity surveys and sourcing injection water, the company said. “Forecasts indicate oil production could exceed 3,000 bopd for the Beach Marcelle waterflood project,” Range said. “The company has received all environmental and government approvals to proceed with the Morne Diablo waterflood expansion project.”

Dr Wang Guohui, a deputy general manager of LandOcean with more than 25 years of experience in oilfield production analysis and management, has been appointed as LandOcean's head of Trinidad project to complement Range’s Trinidad team, the company also told investors. Wang was previously head of strategic production planning department at the research centre of the China National Petroleum Corporation (CNPC), the state-owned fuel-production corporation and the largest integrated oil and gas company in China, where he focused on production planning study for CNPC.

Following a review of its business plan, Range’s board of directors has determined that the drilling business does not fit with the strategy of the exploration and production (E&P) company, and the time and resources will be best spent on efficiently running its upstream assets. “As a result, Range has agreed to sell its drilling services company in Trinidad for total cash consideration of US$7.2 million and these proceeds will be invested primarily into development of our core Trinidad assets,” the company said. “The drilling services company will continue to provide full oilfield operations services to Range in Trinidad, to accelerate Range’s planned development and exploration drilling programmes.”

Strategic partnership with Land Ocean
Range told the LSE it is making “significant progress on the proposed waterflood programmes in Trinidad with its strategic partner LandOcean Energy Services Co.” The company said it “has entered into the second purchase order, for the provision of technical services by LandOcean to implement waterflooding plans in Trinidad, including reservoir geology, reservoir engineering, drilling engineering, production engineering, surface facilities engineering and economic evaluation. Subsequently, the senior management of Range and LandOcean have held a series of workshops, finalising proposed plans for extended waterflooding of Range’s Trinidad licences.”

Investors were told: “LandOcean has recently completed an extended waterflooding study on the South Quarry and Beach Marcelle licences. In total five prospective areas were identified and evaluated both technically and economically between the licences. Blocks identified are C, NE, and SE blocks in Beach Marcelle; and Ⅱand blocks in South Quarry. 

“Based on several geology-reservoir engineering studies completed by LandOcean, two waterflooding plans have been designed, with Plan 1 using existing wells for injection, whilst Plan 2 involving a combination of new and existing wells. The choice of the preferred plan will be made after completion of an onsite well condition survey, anticipated to take place in Q1 (the first quarter of) 2015.”
The next key steps in the programme will be to finalise preferred plan for waterflooding and commence surface studies, which will include well integrity surveys and sourcing injection water, the company said.

The proposed Beach Marcelle waterflood project has received a certificate of environmental clearance from the Environmental Management Authority, Range said. Regulatory approvals are currently pending review.

The company said it has received “all approvals to proceed with the Morne Diablo waterflood expansion project. The company had previously completed a successful pilot waterflood scheme, and can now proceed to expand this project to the remaining shallow wells. The waterflood will be conducted in a phased manner with the conversion of the downdip producers to water injection wells which is expected to commence in  Q1 2015.”

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