Dec 10 Quarterly Activities & Cashflow Report

31 January 2011 QUARTERLY REPORT FOR PERIOD ENDING 31 DECEMBER 2010 Issued Capital 1,218 M* ASX Code RRS Closing price $0.12* AIM Code RRL Closing Price Â£0.08 * Market Cap A$146m* * as at 31 December 2010 Gross Production for the Quarter Gas 235k mcf Range Interest - 53k mcf Oil 11,597 bbls Range Interest - 2,588 bbls The Board of Range Resources Limited ("Range" or "the Company") is pleased to provide the following commentary to be read in conjunction with the Appendix 5B which is attached. Texas North Chapman Ranch As reported above, production for the quarter was 53k mcf and 2,588 barrels net to Range. This production has come from just the middle of three zones on the Smith #1 Well and only an 11ft perforation on the bottom of four zones for the Russell Bevly Well, with both wells flowing under natural pressure. The joint venture has successfully secured a team to fracture stimulate the Russell Bevly well which is aimed at significantly increasing flow rates from the current levels. This team is scheduled to be on site early February 2011, with results from the operations to be reported once available. It is then planned that the team will come back to the Smith #1 Well in April, once the joint venture has had a chance to observe the performance of the Russell Bevly Well. During the quarter the Company received a revised reserve report on the North Chapman Ranch field in Nueces County, Texas, following the successful drilling and completion of the Russell-Bevly #1 appraisal well in 2010. As previously reported the Russell-Bevly well confirmed the Company's structural and stratigraphic models and established additional Proved oil and gas reserves across the northwest flank of the closure. After integration of data obtained from the Russell-Bevly #1, and as shown in the tables below, oil, natural gas, and natural gas liquids reserves net to the Company's interest, as certified by Lonquist & Co LLC ("Lonquist"), the Company's reserve auditor are set out as follows: Lonquist's independent reserves report has estimated the following gross commercially recoverable reserves from the North Chapman Ranch Field: Category Natural Gas Oil (Mmbbls) Natural Gas (Bcf) Liquids (M mbbls) Proved (P1) 62.4 4.8 4.5 Probable (P2) 34.6 2.7 2.5 Possible (P3) 142.5 10.9 10.3 Total Reserves 239.5 18.4 17.3 Set out below is Range's attributable interest in the gross recoverable reserves on 25% of the Smith #1 well and on 20% of the remaining wells assuming the exercise of certain clawback provisions by joint venture partners occurs following the success of the Smith #1 and Russell-Bevly wells: Category Natural Gas Oil (Mmbbls) Natural Gas (Bcf) Liquids (M mbbls) Proved (P1) 12.7 1.0 0.9 Probable (P2) 6.9 0.5 0.5 Possible (P3) 28.5 2.2 2.1 Total Reserves 48.1 3.7 3.5 Based on the reserve numbers cited above, Lonquist's estimated net undiscounted cash flow value to Range, along with PW10 discounted cash flow (at a 10% discount rate) using the same commodity price deck as used in the May 2010 report, following reductions for royalties, opex, capex, production taxes etc are as follows: Reserve Undiscounted PW10 US$ US$ Category Proved (P1) 100m 69m Probable (P2) 60m 37m Possible (P3) 252m 142m Estimated Future Cashflow (Range's net interest) $412m $248m Changes to reserve estimates at North Chapman Ranch include a significant movement of Probable Reserves into the Proved category, as well as new reserves established by the Russell-Bevly #1. East Texas Cotton Valley Prospect Also during the quarter, the Company looked to acquire an additional 8.19% in the East Cotton Valley Prospect which was subject to pre-emptive rights from the Prospects other partners. Subsequent to quarter-end, none of the partners exercised their pre-emptive rights and Range completed the acquisition of the additional 8.19% for a total cost of $148,000 in lease acquisition costs and an overriding royalty retained by the seller, bringing Ranges total interest to 21.75%. The acquisition represents an opportunistic additional investment in the prospect and is expected to provide an immediate increase to the Company's oil reserves, such increase to be reported at a later date. The joint venture has identified a rig to perform the horizontal well Ross 3H well, which was due to spud in January 2011, following the receipt of all necessary permitting, however the rig demobilisation from its current drilling location has been delayed. It is envisaged that mobilisation of the rig to the East Cotton Valley Prospect will commence early February 2011. The joint venture is pleased to announce that the rig has been drilling horizontal wells for other third parties previously and comes with a highly experienced crew and testing equipment, highly capable with respects to horizontal wells. Georgia During the quarter, the Company received the results from the report entitled Seismic Interpretation, Field Mapping and Evaluation of Prospective Hydrocarbon Volumes across the Company's two Georgian blocks (Block VIa and Block VIb) completed by leading International Oil and Gas Seismic Consultancy firm RPS Energy ("RPS"). RPS has identified a total of 68 structural culminations across the two blocks each of which potentially contains stacked reservoirs. Total combined best estimate of gross unrisked oil-in-place across these 68 indentified structural culminations amounts to 2,045 million barrels. Recovery factors for oil in place can be conservatively estimated at 30%. Of the 68 identified prospective targets across the two blocks, 6 structures have been prioritised as being ready for drilling. Of these 6 structures, total gross unrisked oil-in-place has been estimated at 728 million barrels. A breakdown of the gross unrisked oil-in-place for these 6 `ready to drill' prospects are as follows: Prospect Unrisked Oil-in-Place (gross) Kursebi 1 (K1) 123 million barrels Kursebi 2 (K2) 160 million barrels Kursebi 3 (K3) 42 million barrels Vani 1 (V1) 171 million barrels Vani 2 (V2) 89 million barrels Vani 3 (V3) 145 million barrels TOTAL 728 million barrels Figure 1 - Numerous Prospects and Leads with Mean Estimated Oil-in-Place (mmbbls) Commencement of Geochemical Activities Range engaged international geochemical company, Actual Geology International Limited ("AGI") to carry out a "helium" survey on the 3 top multi-stacked prospects as identified by RPS Energy which have estimated undiscovered oil-in-place in excess of 450 mmbbls (mean 100% basis). AGI were given the co-ordinates of three of the six identified "ready to drill' prospects and commenced mobilisation and field operations in early December. AGI completed all field work subsequent to quarter-end in early January and then began laboratory analysis which has all but been completed with the final report now being prepared with an aim for completion in the coming weeks. The survey was a "blind test" where AGI shot the survey without any prior seismic info on the co-ordinates provided by Range/Strait. After the survey and results were compiled by AGI they were then integrated with the existing seismic results to produce the best possible target locations to be drilled. Subsequent to quarter end - Red Emperor Farm-in Subsequent to the quarter-end Range and its Georgia partner Strait Oil and Gas UK Limited ("Strait") announced they had entered into a Heads of Agreement ("HOA") with Red Emperor Resources NL ("Red Emperor") (ASX: RMP) to acquire a 20% farm-in interest (10% from Range and 10% from Strait) in Block VIa and Block VIb in Georgia. The key terms of the HOA will see Red Emperor contribute 40% of the drilling costs for the planned two well program (capped at total gross costs of $14m - RMP contributing $5.6m) to acquire the 20% interest in the two blocks. The Company believes the transaction significantly reduces the Company's financial exposure to the two well drilling program through the favourable two-for-one farm-in terms, whilst still maintaining a significant 40% interest in the two blocks. Puntland Subsequent to quarter-end Range, together with its joint venture partners, Africa Oil Corp. ("Africa Oil") and Lion Energy Corp., entered into amending agreements with the Government of Puntland, in respect of the production sharing agreements ("PSAs") for the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area. The key amendments were as follows: * Under the PSAs, as amended, the First Exploration Agreement has been extended for a further 12 months, from January 17, 2011 to January 17, 2012. * Under the amended PSAs, a minimum of one exploratory well must be spudded in the Dharoor Valley Exploration Area by July 27, 2011. A second exploratory well is required to be spudded in the Nugaal Valley Exploration Area or, at the option of Africa Oil (as operator), in the Dharoor Valley Exploration Area, by September 27, 2011. Range has also agreed with its joint venture partner and operator Africa Oil that the second exploration well due for spudding on of before 27 September 2011, will be included as part of Africa Oil's exploration commitments under the Joint Venture Agreement between Range and Africa Oil Under this agreement, Africa Oil is obliged to spend US$22.5m in both Dharoor and Nugaal before Range reverts to a contributing basis. Africa Oil has satisfied their commitments with respect to Dharoor, however to date, still has circa US$15m expenditure commitments on Nugaal, with expenditure to date on Nugaal being circa US$7.5m. With the second well being able to satisfy the joint ventures obligations under the Nugaal PSA, Range will be carried for the first US$15m spent on the well. Trinidad Subsequent to quarter-end, fellow Australian Listed Entity, Monitor Energy Limited ("Monitor") (ASX: MHL), announced that it had entered into a mandate with major UK based broker and Investment Bank, Renaissance Capital to raise A$90m, with marketing of the offer being undertaken throughout North America and Europe. Following successful completion of the raising, Monitor will look to acquire 90% of SOCA Petroleum Limited - of which Range already holds 10%, however more importantly, funds will also be used to accelerate development across SOCA's three onshore licenses, which will see an immediate increase in production, that is part of a work program which is aimed at increasing production from the current 700 barrels per day to in excess of 4,000 barrels per day within 36 months on the known 2P reserves. As previously announced, the Company will be carried on this initial development expenditure. Corporate During the quarter the company raised just short of $3m through the exercise of circa 53m $0.05 options. Subsequent to quarter end, Range was included in the FTSE AIM All Share Index ("the Index") in the UK. In order to qualify for inclusion in the Index the Company must meet certain liquidity requirements over a twelve month period, which the Company met during 2010. The board believes this to be a significant milestone for the Company with the inclusion in the Index increasing Range's exposure to AIM Index Funds along with increasing the Company's profile amongst institutional investors. Appendix 5B Summary - Consolidated Statement of Cashflow Current Quarter Year to date $A'000 (6 months) A$'000 Cashflows related to operating activities Receipts from product sales and related 388 812 debtors Payments for: * exploration and evaluation (2,400) (7,706) * development (176) (521) * production (240) (465) * administration (667) (1,643) Dividends received - - Interest and other items or a similar nature 71 140 received Interest and other costs of finance paid (87) (175) Income taxes paid - - Other - - Net operating cashflow (3,111) (9,558) Cashflows related to investing activities Payments for the purchase of: * prospects - - * other fixed assets - - Proceeds from the sale of: * prospects - - * other fixed assets - - Loans to other entities - - Other - - Net investing cashflows - - Cashflows related to financing activities Proceeds from issue of shares, options etc. 2,835 10,002 Proceeds from sale of forfeited shares - - Proceeds from borrowings - - Repayment of borrowings - - Dividends paid - - Costs associated with issue of shares (refer - (319) to note) Net financing cashflows 2,835 9,682 Net increase / (decrease) in cash held (276) 124 Cash at the beginning of the quarter / year to 7,798 7,398 date Exchange rate adjustments - - CASH AT THE END OF THE QUARTER 7,522 7,522 Yours faithfully Peter Landau Executive Director Contacts Range Resources Peter Landau Tel : +61 (8) 8 9488 5220 Em: plandau@rangeresources.com.au Australia London PPR Tavistock Communications David Tasker Jonathan Charles Tel: +61 (8) 9388 0944 Tel: + 44 (0) 20 7429 6611 Em: david.tasker@ppr.com.au Em: jcharles@tavistock.co.uk RFC Corporate Finance (Nominated Advisor) Old Park Lane Capital (Broker) Stuart Laing Michael Parnes Tel: +61 (8) 9480 2500 Tel: +44 (0) 207 493 8188 Range Background Range Resources is a dual listed (ASX: RRS; AIM: RRL) oil & gas exploration company with oil & gas interests in the frontier state of Puntland, Somalia, the Republic of Georgia and Texas, USA. * Range holds a 25% interest in the initial Smith #1 well and 20% interest in further wells on the North Chapman Ranch project, Texas. The project area encompasses approximately 1,680 acres in one of the most prolific oil and gas producing trends in the State of Texas. Drilling of the first well has resulted in a commercial discovery with independently assessed gross recoverable reserves in place of 240 Bcf of natural gas, 18 mmbbls of oil and 17 mmbbls of natural gas liquids (mean 100% basis). * Range holds a 21.75% interest in the East Texas Cotton Valley Prospect in Red River County, Texas, USA, with the prospect's project area encompasses approximately 1,570 acres encompassing a recent oil discovery. The prospect has independently assessed gross recoverable reserves in place of 5.4 Mmbbls of oil (mean 100% basis). * In Puntland, Range holds a 20% working interest in two licences encompassing the highly prospective Dharoor and Nugaal valleys with plans to drill two wells (TSXV:AOI) - 45% Operator, in 2011. * In the Republic of Georgia, Range holds a 50% farm-in interest in onshore blocks VIa and VIb, covering approx. 7,000sq.km. Currently, Range has recently completed a 410km 2D seismic program with independent consultants RPS Energy identifying 68 potential structures containing and estimated 2.045 billion barrels of undiscovered oil-in-place (mean 100% basis). * In Trinidad Range has entered into a HOA to acquire a 10% interest in holding companies with three onshore production licences. The licences areas have independently assessed gross recoverable P2 reserves in place of 4.8MMbls (mean 100% basis). The reserves estimate for the North Chapman Ranch Project and East Texas Cotton Valley has been formulated by Lonquist & Co LLC who are Petroleum Consultants based in the United States with offices in Houston and Austin. Lonquist provides specific engineering services to the oil and gas exploration and production industry, and consults on all aspects of petroleum geology and engineering for both domestic and international projects and companies. Lonquist & Co LLC have consented in writing to the reference to them in this announcement and to the estimates of oil, natural gas and natural gas liquids provided. These estimates were formulated in accordance with the guidelines of the Society of Petroleum Engineers ("SPE"). The SPE Reserve definitions can be found on the SPE website at www.spe.org. The reserves estimates for the 3 Trinidad blocks referred above have been formulated by Forrest A. Garb & Associates, Inc. (FGA). FGA is an international petroleum engineering and geologic consulting firm staffed by experienced engineers and geologists. Collectively FGA staff has more than a century of worldâ€“wide experience. FGA have consented in writing to the reference to them in this announcement and to the estimates of oil and natural gas liquids provided. The definitions for oil and gas reserves are in accordance with SEC Regulation Sâ€“X. RPS Group is an International Petroleum Consulting Firm with offices worldwide, who specialise in the evaluation of resources, and have consented to the information with regards to the Company's Georgian interests in the form and context that they appear. These estimates were formulated in accordance with the guidelines of the Society of Petroleum Engineers ("SPE"). ABN 88 002 522 009 www.rangeresources.com.au London 5th Floor, 23 King Street, St. James House, London SW1 6QY t: +44 207 389 0588, f: +44 207 930 2501 Australia Ground Floor, 1 Havelock Street, West Perth WA 6005, Australia t: +61 8 9488 5220, f: +61 8 9324 2400 e: admin@rangeresources.com.au