Oil and gas company Range Resources (ASX: RRS) has added fuel to the flame it lit under its share price yesterday, bringing forward a plan to reopen a producing oilfield in Indonesia to mid-year 2018.
The accelerated work program for its Perlak field in Indonesia will target first oil production by midway through this year, with estimated output put at 200 barrels of oil a day.
Indonesian government-owned oil and natural gas company Pertamina will buy the oil at the nearest receiving point.
Range chief executive Yan Liu said the work program was a first step toward unlocking the potential of the Perlak asset.
“We are hugely excited to be announcing an accelerated work program in Indonesia,” he said. “Following the completion of the initial study work, Range and its partners have developed a plan to target a rapid return to production by undertaking a low-risk, focused work program.
“This a first step towards unlocking the full potential of this highly prospective asset, which has the potential to deliver significant benefits to our shareholders in the form of increased production, cashflows and new development opportunities.”
The latest development add further fuel to a flame that the company lit under its share price yesterday, when it announced Range’s oilfield services business had scored a Shell drilling gig in Trinidad.
Range’s share price rocketed more than 66 per cent during intraday trading yesterday on the news.
The company, which is focused on its assets in Trinidad and Indonesia, said today it expected to start fieldwork at the Perlak oilfield next financial quarter.
Range acquired Perlak on 30 October last year and has now agreed on a work program and budget with the Indonesian state-owned oil and natural gas company Pertamina after building an experienced team in the country.
Pertamina will buy the oil at the nearest receiving point to the field, 160 kilometres away, with the oil to be trucked the sale point site.
The Pertamina-approved program and budget for Perlak will involve the reopening of 10 existing wells that previously produced oil, the workover of two previously producing wells, and geological, geophysical and integrity studies.
Range said the program was designed to swiftly restart production at the historic Perlak oilfield this year.
The company put total forecast expenditure at a gross $US6 million ($A7.75 million), including the well reopenings and required field work.
Range funds 60 per cent of the net costs of the operating company, PT Aceh Timur Kawai Energi.
The company had $US11 million cash on hand and in liquid assets on December 31, the company reported in its first-half report for the 2018 financial year.
Perlak is one of the oldest producing fields in the world, being discovered in 1899 and producing about 50 million barrels of oil from shallow depths of less than 3300 feet of very light oil and an average API of 45-50 degrees.
Range plans to soon provide the market further details of its 2018 work plan.
The company’s securities gained 0.1 cents or 20 per cent to 0.6c today by mid-afternoon trade on the Australian Securities Exchange.