News of an 8% fall in production from its Trinidad operations didn’t do Range Resources (LSE: RRL) much good, and the shares are down 8.5% to 0.6p as I write. Over the last 12 months we’re looking at a 62% fall, although for some of that period the shares were suspended for technical reasons.

Fall in production

The firm said it is disappointed by the production drop, from 620 barrels per day to 570 in the past two months, but reckons it’s still cashflow positive. And with four new development wells lined up for drilling in the third quarter, Range “believes that the next six months will show substantial improvements in operational performance“.

Analysts were forecasting a very tiny profit for 2016, though the further deterioration in the oil price casts surely doubt on that for now — but on the other hand, there’s little point in trying to work out a 2016 valuation based on today’s oil price. And with its recent funding package in place, Range looks safe enough for now, though certainly not an investment without risk.

A safer bet?

An oily I have liked the look of for a while is Falkland Oil & Gas (LSE: FOGL), which is sitting on some very nice sounding discoveries around the Falkland Islands — the firm’s find at Isobel Deep in the North Falkland Basin, which it shares with Premier Oil and Rockhopper, beat all expectations and could indicate up to 1 billion barrels of recoverable oil in the whole region.

The share price brightened up in the first couple of months of the year, but since March it’s slipped back from around 37p to 24p today as the uptick in the price of oil has reversed itself — it was fetching more than $60 back then. But the firm has plenty of cash to fund its 2015 drilling programme, and its assets make it look attractive.

A five-bagger

Amur Minerals (LSE: AMC) is one of those rare miners whose share prices have risen this year. In fact, at 16.3p it’s up more then fivefold in 12 months — but its success was all contingent on gaining a licence for its Kun-Manie prospect in Russia. It got that in June, and the price spiked much higher and even reached 44p before settling down to today’s levels, so there’s plenty of volatility.

The finance for developing the project is not settled yet, and the mere fact that it is in Russia adds risk. But the company’s “operational blueprint” published in late June sounded provisionally optimistic, and there could be nice gains for those willing to take on a potentially exciting ride.

The post Is It Time To Buy Range Resources Ltd, Falkland Oil & Gas Limited And Amur Minerals Corporation? appeared first on The Motley Fool UK.

Part of the road back to health has been a new funding package from Beijing Sibo Investment Management, which has already handed over £5.2m ($7.9m) in return for 650m news shares at 0.8p each, in an investment that could eventually be worth up to $35m.

This comes on top of the news that Range’s production in Trinidad reached 620 barrels of oil per day and that “For the first time in Range’s history and despite the challenging oil price environment, the Company has positive operating cashflows…“.

Is Range good value today? Sibo seems to think so, and is putting its money where its mouth is.

Falling oily

Sound Oil (LSE: SOU) shares soared to 24.4p on 5 May, but since then we’ve seen a fall of nearly 25% to 18.2p. The latest update on the firm’s second Nervesa appraisal well in Italy confirmed it had found gas shows in multiple intervals, but went on to tell us that the perforated intervals it had tested are “of relatively low permeability“. The firm must now decide whether to “initiate a well test directly or to utilize stimulation techniques beforehand“.

The company has also entered into a farm-in agreement at the Tendrara licence in Morocco, with the Moroccan Oil and Gas Investment Fund, so things look to be developing nicely.

But the recent uncertainty at a time when Sound Oil is extending its current open offer seems to have unnerved investors — but if things come good, the latest dip could turn out to have been a nice buying opportunity.

Cheap gold?

Gold miner Pan African Resources (LSE: PAF) has seen its shares lose 21% over the past 12 months, to 10.9p as I write, so is there are bargain to be had here? Well, the firm released a profit warning on 8 June telling us that its EPS and Headline EPS for the year ending June 2015 are “expected to be between 40 per cent and 60 per cent lower” than the previous year.

But there’s a fairly healthy Buy consensus out there from brokers right now, and with an increasing number of commentators suggesting stock markets are getting a bit toppy and the gold price stabilising over the past quarter, could we see interest in gold pushing Pan African shares back up?

The post Do Price Falls Make Range Resources Ltd, Sound Oil plc And Pan African Resources plc Good Value? appeared first on The Motley Fool UK.

The reason? Two major news releases revealing a new exploration license and the raising of $50m in new funding.

Oil-rich Trinidad

The company was been awarded an exploration and production licence for the St Mary’s Block in Trinidad. Initially for six years during which Range will drill four exploration wells, the licence will last for 25 years should a commercially viable discovery be made. The company will also conduct 2D and 3D seismic analysis, together with other technical studies.

What’s especially exciting about this is that Trinidad sits on multiple valuable oil plays, and other oil firms have done extremely well there. Leni Gas & Oil has seen its share price rise sixfold in the past few months after successes in its Goudron field and the Cedros Peninsula — both in Trinidad.

Range’s new block has multiple possible targets and the area has already yielded several significant finds, and Range already has significant infrastructure in the region which should ease the exploration and production effort.

Plenty of cash

How about the cash to pay for it?

Range has also announced a $50m investment from Chinese investor Core Capital Management, with $20m covered by a new share issue and $30m as convertible bonds — Core Capital will own 19.99% of the share capital.

As well as helping finance ongoing Trinidad exploration work, some of the new cash will be used to repay debts.

We could now be at the start of a price recovery, after Range Resources shares have lost two thirds of the value since the middle of July — and they’re actually down 96% since April 2011!

A share to buy?

Before today, Range was forecast to report a pre-tax profit for the year ending June 2015 — only a modest £11.5m, but it’s a start. Things will need to be re-evaluated now to account for the costs of the new exploration, but it did put the shares on a forward P/E of just 3.2.

With Trinidad very much today’s hot oil prospect, this is definitely one to keep an eye on — Core Capital clearly thinks it sees a good thing at today’s valuation levels.

The post Range Resources Ltd Spikes On New Licence And $50m Investment appeared first on The Motley Fool UK.

Jonah 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.

The post Is Range Resources Ltd A Buy As Price Jumps On Management Change? appeared first on The Motley Fool UK.

Higher financing costs and a major asset write-off were the reasons given for the widening losses. Financing costs rose from $4m as reported last year, to $21.8m for 2014. Assets written off cost the company $24.3m.

Unfortunately, during the period the Range’s revenue also declined by around 19% as the company restructured its portfolio and sold off a number of non-core assets.

Making progress

However, while today’s results are disappointing, Range is moving forward, albeit slowly, and if the company can meet its own self-imposed targets, the shares could be good value at present levels.

Indeed, Range is targeting production from its assets within Trinidad of 1,000 barrels of oil per day by early 2015, which City analysts believe will translate into a pre-tax profit of £6.4m for full-year 2015.

Nevertheless, the company has plenty of work to do before it hits this target and management has acknowledged that the company’s recent performance has been disappointing. Still, asset disposals over the past year have streamlined the company, allowing it to build a better understanding of core acreage within Trinidad, where Range has a 100% working interest in the Morne Diablo, South Quarry and Beach Marcelle licenses.

Financing in place

Alongside today’s results, Range’s management announced that the company had secured a $15m loan from Lind Asset Management LLC. This loan provides Range with medium-term financing to carry out development plans within Trinidad and supports the company’s growth plans. Actually, according to Range’s management this loan will allow the company to accelerate development plans, as the cash will enable the company to improve its rig fleet.

That being said, an additional $15m in debt could only add to Range’s problems if the company fails to meet production targets. Indeed, Range’s financing costs are already constricting the company’s growth and additional debt is will increase Range’s hefty interest bill.

What do to?

So, what should you do following today’s news? Well, Range has clear objectives for the next year, the company wants to double oil output, reduce capital and operating expenditure to enhance financial returns.

If Range can meet these targets, City forecasts predict that the company will report a pre-tax profit of £6.4m next year. With a current market capitalisation of £56m, this indicates to me that Range looks attractive at current levels, trading at a pre-tax P/E ratio of 8.8. The company trades at P/B ratio of 0.8. 

The post Why Shares In Range Resources Ltd Slumped 30% Today appeared first on The Motley Fool UK.

What: Shares in Range Resources (LSE: RRL) dropped 10% — making the oil and gas explorer one of the top fallers on the AIM market — after extending the repayment date of a loan to International Petroleum (IOP).

So what: Range Resources lent $8m to IOP as part of a proposed merger last year, but this was subsequently aborted and the loan, which was due to have been repaid with interest by 30 April 2014, remains outstanding due to IOP’s “financial constraints”.

The new payment date is 30 November 2014 to allow IOP time to dispose of its Russian assets, after which IOP will make a cash payment of $500,000 and the balance will convert into ordinary shares of National Stock Exchange of Australia (NSX) listed IOP.

Now what: Range is happy to have recovered “as much value from this difficult situation as possible”. The chief executive, Rory Scott Russell, added: “IOP holds an international portfolio of exploration and production licences including a large acreage position in Niger, a highly prospective and under-explored country with considerable onshore oil potential.”

Range Resources is expected to hold around 9% of IOP with a further 5 million options exercisable at $0.06 two years from the issue date.

Even after this morning’s price movement Range Resources shares are still sitting on a handy 11% gain year-to-date, whereas the FTSE All-Share has contracted 1%.

The post Why Shares In Range Resources Ltd Plummeted Today appeared first on The Motley Fool UK.

Range Resources’ issued ordinary share capital will be 4,964,816,681.

The company also said that Amy Just has been appointed joint company secretary, effective from today. Ms Just replaces Sara Kelly.

Furthermore, the dual AIM and ASX listed firm announced the change of registered office to 945 Wellington St, West Perth WA 6005, Australia.

The share price is up 72% year to date and I’ll leave it to you to decide if the time to buy has passed.

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