By Stewart Dalby

Since the new management team under CEO Rory Scott, a former Shell manager, took over at AIM and ASX- listed Range Resources last February it has been sifting through the rubble of the broken company, and trying to do three things.

First, it has been re-ordering the group’s portfolio by cutting costs, jettisoning uneconomic projects and disposing of non-core acreage. Second, it has been clearing or recycling the toxic legacy of numerous short term and dilutive debt facilities. And third it has been trying to come to grips with boosting production from its licences on its core asset, Trinidad.

As for the asset base, the company is hanging on to the once key, potentially high impact acreage in Puntland, the semi- autonomous region of Somalia. But the group does not have the wherewithal to do much on the licences in the foreseeable future. Colombia and Georgia look like going the same way as Texas, that is, sold off, while Guatemala is under review.

Much progress has been made in re-cycling the debt and CEO Scott Russell has said: “Under the completion of the recently announced US$50 million fund package from Core Capital we will be in a position to expand our operational activity further, including the execution of a water-flooding project.”

Here Scott Russell is talking about the third item on his agenda – Trinidad. Shareholders in Range have had a lot of disappointments to put up with in the past couple of years. Many investors were further crestfallen when in September Range confirmed it won’t hit its 2014 exit rate of 1,000 bopd.

But it is not all gloom and doom. Range has a large land holding in Trinidad, much of it as yet unexploited. But even on the acreage it is exploiting there is plenty of scope for the Caribbean island to right the company’s finances – there are 22 million barrels of 2P reserves, an impressive 19 million of which are in the 1P category, and plenty of upside. The company now seems it has the investment funds needed to keep the drill-bit spinning, rehabilitate old wells and invest in second recovery techniques.

Recently the company announced that production continues to increase following successful drilling operations. Since the last reported production figures (September 30 2014) there has been a 5 per cent increase from 564 bopd to 592 bopd. This represents nearly a 15 per cent increase in production since January. The increase in production is a result of continued development drilling and workover operations. Work continues with technical studies related to the water-flood projects and the company remains on track to begin water injection in 2015.

With the decline of LNG exports from Trinidad to the US because of the shale gas revolution in the US, Trinidad has become something a re-discovered oil and gas province, particularly for small cap companies like Range and Trinity Exploration and Production. These have started to achieve output by revisiting, with development wells, old discoveries on field that have long been dormant.

Range’s current production profile is redolent of another Aim company now called LGO Energy. This group acquired acreage in Trinidad in 2012. It spent a lot of 2013 picking the low lying fruit in the shallow Goudron Sands zone on its Goudron field and achieved modest production through workovers. In 2014 LGO achieved an exponential jump in output by drilling into deeper zones like the Gros Morne.

Scott Russell has not specifically said he intends to emulate the LGO model, but he is looking forward to chasing down some of the upside in the portfolio.  The upcoming onshore exploration well on the Guayaguayare licence, due to spud by Q1 2015, will be the deepest well to be drilled by Range to date and will test two sandstone targets in the highly prospective Gros Morne formation with a combined P50 resource estimate of 22 million barrels.

If this comes in, it would be highly material for the company, not just because of its volume but also the productivity of these sandstones, which have been known to deliver IP rates of 200-400 bpd.

At all events, Scott Russell is confident he can achieve the 1000 bopd target in 1h 2015. The shares have perked up a little on recent developments. Last Friday they were 0.04p higher at 0.73p. But they are still some way off the 52 week high of 2.52p. This, of course way, way below a level once portended by the previous management.