Vancouver, BC, Canada – Range Energy Resources Inc. (“Range” or the “Company”) (CSE: RGO) (FWB: YGK) announced today that, Gas Plus Khalakan (“GPK”), the sole contractor of the Khalakan PSC in the Kurdistan Region of Iraq, issued an end 2017 operations update regarding the Shewashan field.
The GPK operations update is repeated below and can be found at the NewAge’s website: http://www.newafricanglobalenergy.com/.
Total payments received by GPK for oil sales now amount to $9.0 million representing
190,115 barrels of GPK entitlement oil sold through to the end of September 2017. Sales from October to December has been invoiced through the traditional operating procedures in place with the KRG Ministry of Natural Resources.
In total, cumulative field production to date exceeds 1,300,000 barrels of oil. Current total field production is 1,000 barrels per day. Total oil production for the 3rd quarter
2017 was 81,207 barrels and 422,027 barrels have been produced in 2017, up to and including 1 December 2017.
These amounts are significantly below that required to meet forecast annual production targets and break-even economics. There are two main reasons for this lower production. Firstly, water production rates in the Qamchuga formation have limited oil production rates. The Qamchuqa formation is heavily fractured and many of these fractures are connected to the aquifer. Secondly, production rates from the Shiranish and Kometan reservoirs have been limited, due to these formations having a tight matrix, with their fracture network being not as developed and extensive as in the Qamchuqa reservoir. GPK continues to recomplete the four Shewashan wells to limit water production in the Qamchuga and stimulate the Kometan and Shiranish reservoirs to facilitate greater production rates. This activity is summarized below:
Current production rate: 350 bopd and <5% water cut from the Qamchuqa reservoir. Recompletion plans include: perforation and acid stimulation of the Kometan reservoir.
Current production rate: 650 bopd and low water cut from the Kometan reservoir. Recompletion plans include: Larger acid stimulation in the Kometan to increase the production from perforated intervals (45m) and a possible propped hydraulic frac in the Shiranish reservoir which has yet to be tried in the field.
Current production rate: 200 bopd and 30% water cut from Kometan formation. Recompletion plans include: isolation of the Qamchuqa reservoir to reduce the water production and further stimulation of the Kometan reservoir.
Currently producing at low, water free oil rates on a small (12/64”) choke from the Kometan. This well produced initially from the Qamchuqa reservoir but due to high water production it was recompleted and stimulated in the Kometan reservoir. Recompletion plans include: much larger acid fracturing on the Kometan or alternatively this well is also a candidate for a propped hydraulic frac in the Shiranish reservoir.
2018 Production Forecast:
The production forecast for 2018 is 665,400 barrels of which 1,800 barrels per day is the forecasted average for the first half of 2018.
The Gross 2018 Operating Budget is $20.8 million, which includes the fixed and variable costs for production, as well as recompletion activity to increase production rates.
Expenditure by quarter is as follows:
|TOTAL PSC BUDGET
Breakeven field economics are estimated at 2,152 barrels per day, at an assumed Brent price of $50.00/barrel reducing to 1,761 barrels per day at an assumed Brent price of $60/barrel.
GPK has engaged DeGolyer & MacNaughton to revise the 2017 Reserve Audit. This study commenced in November and is expected to be delivered in March 2018.
The Company is a 24.95% indirect shareholder of GPK through its ownership of 49.9% of the shares of New Age Alzarooni 2 Limited (“NAAZ2”). NAAZ2 owns 50% of the shares of GPK.
Production rates and quantities, reserves and resources, both projected and historical are provided in this release according to disclosures provided by GPK. Range expects GPK to utilize reporting procedures that are in compliance with the COGE Handbook standards and NI 51-101 (National Instrument Standards of Disclosure for Oil and Gas Activities).
The Company also announced that it does not plan to proceed with the cash call it received for the month of November and December to fund the current drilling program, and it does not plan to do so in the foreseeable future. Future capital calls will be dependent upon the Company’s ability to raise additional capital and successful operations in the field.
For further information on Range Energy Resources Inc., please visit the Company’s web site at www.rangeenergyresources.com.
On Behalf of the Board of Directors:
This news release contains certain statements that may be deemed to include “forward-looking statements”. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although Range Energy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of Range Energy’s management on the date the statements are made. Except as required by law, Range Energy Resources Inc. undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.