Range Resources (LSE: RRL) shares are rising today, after the company announced that non-executive chairman Sir Sam Jonah is stepping down after the company’s annual general meeting next month.
Jo
nah will be replaced by Graham Lyon, who joined the board in February as a non-executive director. Mr Lyon brings plenty of experience to Range as he has been working in the oil & gas industry for more than three decades. Over this time Mr Lyon has worked at some of the industry’s largest players including Royal Dutch Shell and Chevron.
And at first glance it appears as if this is a great move for Range. While the outgoing chairman has plenty of management, as well as political, experience, he lacks a specific oil & gas industry backcground. In this respect, Mr Lyon appears to be the better man for the job.
Funding news
Along with today’s management changes, Range has also announced the completion of its $15m financing deal revealed last month. As well as guaranteeing the $15m in financing, management has been able to agree to loan on improved terms.
For example, Range will now be able to repay the loan at any time and the loan will be drawn in two separate tranches, rather than one bulky instalment, increasing the company’s financial flexibility. Tranche one involves a one-off payment of $5m at the closing of the deal, with a further $5m to be drawn down on a monthly basis over 10 months. Tranche two, worth $5m, will be available on a monthly basis from April 2015.
Unfortunately, even though this financing deal is great news for Range, the company is still struggling on many fronts, although the additional cash should help the company meet its production targets.
Struggling
Since announcing that the company was in discussions to secure financing, Range’s share price has slumped by around 50% and it’s easy to see why.
Indeed, over the past few months the company has revealed that it will miss production targets for this year, as operational issues have impacted the company’s operations in Trinidad. Management hopes that the $15m in financing will help the company get production and operations back on track, which should help the company repay the loan and move forward.
However, there’s no denying that Range still has a lot to do before it can be said that the company is back on the road to growth. Additionally, the new management team will have to prove that they know what they are doing, before investors can fully throw their weight behind the company.
Nevertheless, Mr Lyon’s previous experience should help Range push forward, although it may not be the time to buy just yet as Range has a long road ahead of it.
