Red Emperor flotation offers strong leverage into Range Resources’ exploration portfolio

AIM and ASX listed oil and gas group Range Resources (LON:RRL) this morning reported the initial results of an independent survey of its licences in the former Soviet state of Georgia. Range, which already has exploration an production operations in Texas, US and big hopes for drilling projects in the Somali state of Puntland, secured its Georgian licences in July 2009 in a move to diversify its portfolio.

AIM and ASX listed oil and gas group Range Resources (LON:RRL) and its partner in the former Soviet republic of Georgia, Strait Oil and Gas UK, have agreed the terms of a deal to each sell 10% of their holdings in Block VIa and Block VIb to ASX listed Red Emperor Resources NL. The news triggered a 4.2% fall in the value of the company’s shares to leave them trading at 7.9p. The key terms of the heads of agreement will see Red Emperor contribute 40% of the drilling costs for a planned two well drilling programme to acquire the 20% interest in the two blocks.

Range Resources (LON:RRL) is a dual listed (ASX: RRS) Exploration and Production company with interests covering 4 geographical areas; onshore Texas USA, The Republic of Georgia, Puntland Somalia and Trinidad. The major near term focus for Range Resources and its partners will be the high impact exploration drilling in Puntland and Georgia, targeting combined potential structures amounting to multi billion barrels of oil.

Range Resources (LON:RRL) , the AIM and ASX listed oil and gas group said this morning that it had secured a three year £20m equity line facility to help fund the rapid development of its assets. The deal has been set up with Dutchess Capital and will allow Range to access cash when it needs it by issuing shares at a 7% discount to market value. In today’s update, Range said it was also now set to be carried on the second of two wells planned to be drilled on its licences in the Somali state of Puntland later this year.

Range Resources (LON:RRL) has hired international geochemical company, Actual Geology International to carry out a “helium” survey on the three top multi-stacked prospects identified on its acreage in the former Soviet state of Georgia. The move comes ahead of plans by the AIM and ASX listed oil and gas group and its partner Strait Oil amp; Gas to begin drilling targets next year, with rig mobilisation expected in February 2011.

Ascent Resources (LON:AST) the AIM listed oil and gas exploration and production company with an European based portfolio of assets has recently updated the market with the results of two recent fracture simulations at its key Petišovci project located in Slovenia in which it holds a 75% interest.  Following the two recent announcements Scott Richardson Brown, the Executive Finance Director of Ascent Resources, has taken time out to discuss various aspects of the business, including, the key Petišovci project, Hermrigen drilling, Ripi oilfield redevelopment, funding and shareholder value creat

Since Jurie Wessels took the reigns as chief executive of Goldstone Resources (LON:GRL) in May 2009, the company has snapped up a collection of prospective gold projects in west and central Africa that have given its investors a reason to get excited. Together with exploration director Dr Hendrik Schloemann, Wessels has built a shimmering prospector’s portfolio that started in Ghana and now stretches west to Senegal and south to Gabon.

Regency Mines (LON:RGM) offers decent upside in the coming months from its stakes in Oracle Coalfields which is due to list on AIM shortly (April?), from its 20% stake in Red Rock which is expecting gold pour news from Colombia and its interim results due next week. Drilling in Mambare will start in April. To sum the investment case up in a nutshell, most of the market cap seems covered by RGM's stake in RRR, with only a small portion of the market cap covering the stakes in Oracle, Direct Nickel, Mambare and other projects.