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Message: Q&A from Range on Puntland


1) What is the situation with offshore Puntland? What stage are negotiations at?

An offshore PSA, incorporating an indicatively agreed work program and fiscal terms, is in the process of being prepared and the Company is targeting the end of the quarter for this to be finalised and signed off by both parties.

2) RSDD‐H Satellite technology is becoming a major advantage, when used along with seismic, for on‐shore oil exploration. Have Range Resource considered using this technology for the Puntland exploration?

The company constantly evaluates both proven and emerging technology for its exploration programs and will recommend to its partners all tools that are deemed to be cost effective for the mitigation of exploration risk.

3) Did HRN perform electrical logging analysis over the 50m of Jesomma Sands encountered in Shabeel North before performing the Drill Stem Test and if not then why?

Open hole log evaluations were performed by the operator prior to selection of zones for testing in Shabeel North.

4) Why does the company think the wireline formation testing failed at Shabeel? Was it a mechanical failure or because of the characteristics of the reservoir?

Formation testing is difficult and often produces results that are not immediately clear. The operator experienced mechanical difficulties during testing, but a combination of mechanical difficulties and reservoir characteristics are the most likely explanation for the lack of success to date.

5) Why was drilling stopped to test a 50m gross section which contained oil shows, then 72 hours later its clear water with no oil shows? Why was drilling not completed to TD then tested?

Oil shows while drilling do not necessarily correlate with positive test results. Oil may be present in the reservoir but the rock may lack sufficient oil saturation and/or permeability to yield commercial tests or flow rates. The operator determined that enough data had been collected to warrant suspension of drilling and completion of testing prior to drilling ahead to target depth.

6) Will we go to Nugal regardless of Dharoor results?

Until the full results are known with respect to the current two well program, the Joint Venture will only then look to determine the next step in the Puntland exploration program in conjunction with the Puntland Government. As per previous Q&A, operating updates for the Puntland project, including future drill program plans, will be provided in Company announcements as and when such information becomes available through the project operator, Horn Petroleum.

7) Have you cased the well?

To a level just above the Jessoma formation (above the previous testing point).

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