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Message: Update #2 Texas

Update #2 Texas

posted on Sep 25, 2009 12:02PM

continued expansion ...Georgia and now TX....

21 September 2009

Company Announcements

Australian Securities Exchange

Exchange Plaza

2 The Esplanade

PERTH WA 6000

Range acquires interest in a strategic US asset

Highlights:

  1. Range acquires a 25% interest in well known Texas oil and gas field, with drilling at project already underway,
  2. Low entry cost
    1. To fund drilling of Smith #1 Well (AUD$1m) and in the event of a discovery fund costs to production (AUD$350,000),
    2. Significant infrastructure in place and timing to first sales will be approximately three months upon a discovery being made, with an estimated payback period of 8 – 10 months,

    Australian based oil and gas company Range Resources Limited (

    ASX:RRS, AIM: RRL

    ) ("Range" or "the Company") continues to enhance its international oil and gas portfolio, reaching agreement with U.S. based private oil and gas company Crest Resources Inc ("Crest") to acquire a 25% working interest in the North Chapman Ranch project located in Nueces County, Texas.

    The project area encompasses approximately 1,280 acres in one of the most prolific oil and gas producing trends in the State of Texas.

    Smith #1 Well – Currently Drilling

    Range will participate in the Smith #1 well, which has already commenced drilling and is expected to confirm an apparent discovery made by Crest and its partners earlier this year. The well is currently at 8,000 feet with a target depth of 14,000 feet. Range anticipates target depth being achieved in the next three weeks and will provide updates to the market as they are received.

    North Chapman Ranch Background

    North Chapman Ranch is situated within the prolific Frio producing trend just north of the Chapman Ranch in the Mobil David and Doughty Fields. The Mobil David field was discovered in 1965 when Mobil drilled the Chapman #1B and completed the well in the Laureles Sand (now the Howell Hight). Since then, an estimated 250 billion cubic feet of natural gas and more than 10 million barrels of oil have been produced from this field, primarily from the Anderson sandstone. Recently, several operators in the area have been successfully developing the deeper Howell Hight formation, with some wells exhibiting flow rates in the 6

    9 million cubic feet per day range. The currently drilling Smith #1 well is programmed to test the Howell Hight formation in a location near that of the recently drilled Zdansky #1 well. Crest was unable to complete the Zdansky well due to hole problems.

    If successful, the Smith #1 well could trigger significant oil and gas production and development drilling with very attractive economics, at a time when exploration and development costs in the U.S. have dropped dramatically. In addition, the favorable operating and regulatory environment in Texas serves to mitigate perceived political risk associated with Range's other international exploration projects.

    Fax: +61 8 9324 2400

    Benefits for Range

    The cost for Range is AUD$1m which includes the cost of the current well. In the event of a discovery, costs to production will be approximately AUD$350,000. The low cost relates to the significant infrastructure (eg. pipelines) already in place. Timing to first sales will be approximately three months upon a discovery being made with an estimated payback period of 8 – 10 months. With winter approaching in the US, timing may be expedited with increased gas prices. Range can limit its exposure to the Smith #1 well or continue with its participation interest in an exploration area which is targeting a minimum of 80 BCF of gas (undiscovered gas in place).

    Moving Forward

    With Range anticipating that Africa Oil and the Puntland Government will agree to the proposed drilling programme on the onshore Puntland oil & gas blocks shortly, the recently acquired Georgian blocks being prepared for a seismic survey and the Smith #1 well about half way to target depth, the Company is excited with its portfolio and the activity planned for the coming months.

    The Company received over subscriptions with its latest placement and will

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