Growing E&P company with solid funding in place and focused strategy on production growth

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1 Growing E&P company with solid funding in place and focused strategy on production growth AIM: RRL, ASX: RRS 1

2 Disclaimer This presentation may contain certain forward looking statements with respect to Range s expectation and plans, strategy, management s objectives, future performance, production, costs, revenues, reserves and other trend information. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this presentation should be construed as a profit forecast. Past share performance cannot be relied on as a guide to future performance. Range disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The words believe, expect, anticipate, indicate, contemplate, target, plan, intends, continue, budget, estimate, may, will, schedule and similar expressions identify forward looking statements. No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this presentation and no responsibility or liability is or will be accepted by Range in relation to it. 2

3 Attractive investment proposition The Company is on a solid footing to deliver on its growth plans in 2016 Range is the pre-eminent independent onshore operator in world class petroleum province of Trinidad Largest independent operator of onshore acreage of 475 km 2 The most active drilling campaign underway of over 20 wells to be drilled The only Company to be doing exploration work with the first exploration well scheduled to spud in Q Largest scale waterflood projects to be undertaken in recent times in Trinidad Solid 2P reserves base of 22 mmbbls Highly prospective exploration acreage prospective resources of 91.3 mmbbls Funded work programme and strong balance sheet Equity funding of US$30 million completed 12-month credit facility on drilling services in place Streamlined operations and reorganisation conserves balance sheet The sale of the drilling business removed the cash burden, reduced head count by over 200 staff and allowed Range to focus on upstream business G&A costs reduced by 32% during FY2015 with further reduction in the current financial year Sale of Texas assets, Citation Resources equity stake, and Puntland exit completed Georgia and Guatemala exits continue Liquid stock Combination of cornerstone / retail investors: Directors and Management invested personally Strong strategic partner Integrated Master Services Agreement in place with strong strategic partner LandOcean LandOcean provides full oilfield operations services to Range in Trinidad with four new drilling rigs addedto the fleet 3

4 Growth strategy and funding Strong balance sheet, short-term upside and significant growth potential Growth strategy 1. Production and reserves growth Grow current production in Trinidad (c.600 bopd) to 1,000 bopd by the end of Q1 2016, and more than double by the end of Q Infill drilling, workovers and waterflooding programmes underway Migration of prospective resources to reserves through exploration 2. High impact exploration Two exploration wells to be drilled during 2015 / 2016 with transformational potential (the Guayaguayare block) Work programme on the St Mary s block continues 3. New strategic asset acquisitions The Company continues to evaluate potential acquisitions of high quality assets at attractive valuations, which will create value for shareholders, provide Range with additional production and revenue, and leverage partner s capabilities and resources Funding in place Equity finance US$30 million funding completed with China-based fund at a 50% premium to the share price Supplier finance LandOcean provides 12 months credit on all issued invoices for drilling services, allowing repayment from future cashflows Trade finance (in progress) LandOcean in conjunction with Sinosure are looking to provide Range with up to US$50 million credit facility of two years principally related to the waterflood programme. To be in place prior to commencement of the main waterflood programme Focus on cost efficiency Driving efficiency and cost reduction by streamlining the scale and geographic footprint of non-core and cash draining businesses Continued reduction in G&A costs (materially decreased by 32% during the last financial year) 4

5 Board salaries (USD million pa) Lowest management costs against the peers Team focused on shareholder value Board and management invested in the Company personally Source: Range s internal research based on most recent publicly available audited statements 5

6 2016 production forecast Funded drilling programme Production expected to more than double by the end of 2016 Waterflood to commence in 2H 2016 Production target of 1,000bopd by the end of Q Effective volume/day (new & existing) (bopd) Total oil from exisiting prd (bopd) Total new oil from drilling (bopd) Total new oil from waterflood (bopd) 6

7 Trinidad assets overview Building significant E&P player Development drilling Shallow drilling in proven reservoirs with quick development from spud to production Active drilling campaign of over 20 exploration and development wells currently underway Focus on improving operational efficiency, and sub-surface evaluation to reduce risk and increase reward Access to a sizeable drilling fleet, with four new rigs added to the fleet Secondary recovery waterflood Waterflood is key to increasing production Majority of production growth to come from Beach Marcelle field Water injection planned for 1H 2016 Waterflood production expected to commence in 2H 2016 High upside exploration targets Exploration of the deeper potential of the existing licences Exciting exploration activity on Guayaguayare and newly awarded St Mary s licences First exploration well expected to spud in Q Location map of Range s licenses in Trinidad Largest independent onshore acreage in Trinidad (475 km 2 ) Operator and majority interest holder of all 5 blocks Producing assets with 2P reserves of 22 mmbbls Prospective resources of 91.3 mmbbls (excludes St Mary s and Guayaguayare blocks) Annual Production of 205,209 bbls (FY2015) 7

8 Drilling work programme Access to sizeable drilling fleet with four new drilling rigs Over 20 development wells planned to be drilled over the coming months, with drilling underway (2 wells drilled so far) Production target of 1,000 bopd by the end of Q LandOcean has acquired Range s drilling business in Trinidad in Q2 2015, transferring operational performance risk, improving financial stability and planning LandOcean provides full oilfield operations services to accelerate Range s planned development and exploration drilling programmes Four new drilling rigs added to the existing fleet, ranging in drilling capabilities from 1,000m to 4,000m The 4,000m rig expected to commence drilling operations during Q4 2015; the other three rigs expected to commence drilling during Q The addition of the new rigs is crucial to improving capabilities and limiting the downtime of Range s development and exploration operations New 4,000m rig at Morne Diablo field 8

9 Highly prospective exploration: Guayaguayare Shallow PSC Rights to a depth of up to 5,000 ft. Range holds a 65% interest and Petrotrin holds a 35% interest (subject to final approvals) Deep PSC Rights to a depth below 5,000 ft. Range holds an 80% interest and Petrotrin holds a 20% interest (subject to final approvals) Planned work programme The Canari North exploration well expected to spud in Q P50 risked estimated recoverable prospective resource of the Canari North Prospect is 2.16 mmboe Any success with the well will de-risk the Moruga sub-basin and result in material potential upside in the Guayaguayare block with multiple follow-on prospects and leads to be tested by further exploration drilling The second commitment well, the Guayaguayare deep well expected to be drilled during 2016 Location map of the Canari North well Structural cross section of the Canari North well 9

10 Highly prospective exploration: St Mary s The St Mary s block comprises 44,731 acres (180 km 2 ) spread over 4 subblocks contiguous to Range's Morne Diablo and Guayaguayare licenses Highly prospective acreage with multiple plays, on trend with several significant recent onshore discoveries Range was awarded the block via competitive tender The E&P licence has been awarded for the initial period of six years (until 30 October 2020) and in the event of a commercial discovery, the licence can be renewed for 25 years (until 30 October 2039) Range provided the required US$8 million performance bond in support of the minimum work obligations on licence Range has committed to drilling four exploration wells, shooting of 160 km 2D seismic and 60km 2 of 3D seismic, along with various other technical studies before the end of 2018 High potential leads and prospects of St Mary s Work programme 2015 (underway) Audit of existing field infrastructure, facilities and wells Preparation for submission of drilling and subsequent production environmental permitting Work Programme 2016 (planned) Tendering for drilling rig, equipment, and other oilfield services Reprocessing of existing seismic data Technical studies Development work (reactivation of 3 wells) Range s CFO, Nick Beattie, at the signing ceremony of St Mary s 10

11 Secondary recovery work programme Largest scale waterflood projects to be undertaken in recent times in Trinidad and will be a major contributor to the Company s production growth Range and LandOcean have been evaluating multiple waterflood blocks on the Beach Marcelle and the South Quarry fields, and expansion of the existing pilot project on Morne Diablo field Majority of production growth to come from waterflood programme centred on Beach Marcelle 76% (14.7 mmbbls) of Range s 1P Reserve base is found in Beach Marcelle First waterflood production is expected to commence in 2H 2016 Waterflood projects expected to add over 3,000 bopd of production Waterflood projects are subject to final government approvals Range applied for the approvals in August 2015 LandOcean in conjunction with Sinosure are looking to provide Range with up to US$50 million credit facility of two years principally related to the waterflood programme. To be in place prior to commencement of the main waterflood programme Waterflood technology Morne Diablo pilot waterflood 11

12 Morne Diablo Shallow Forest waterflood expansion The Company has pilot waterflood in place, which was put together to help gather data and test operational and reservoir parameters to aid in the planning of the larger expansion model Given success of the pilot scheme, the larger scale expansion in the Shallow Forest horizon is now underway The original oil-in-place in the expansion area is about 6.5 mmbbls, of which 1.35 mmbbls (21%) has been produced by primary depletion Studies indicate that this plan could produce another 1.15 mmbbls (18%) of reserves Surface construction and material and equipment preparations are on the way Injection expected to commence in December 2015 (once approvals are in place) and first production in 2H 2016 with anticipated peak production estimated in year 2 of 640 bopd Map showing expansion and pilot areas Locations of future injectors / producers 12

13 Beach Marcelle waterflood The Beach Marcelle field waterflood has been split into a number of individual projects, based on the fault blocks within the field Each project has been subjected to subsurface and simulation studies, and tested for economic viability at current oil prices 76% (14.7 mmbbls) of Range s 1P Reserve base is found in Beach Marcelle Phase 1 projects comprise the SE, NE and part of the SW blocks The SE block will be the first to be waterflooded. It is expected to produce up to 2,500 bopd and 5.5 mmbbls oil in an 8-year period. Up to 15,000 bwpd of water injection likely to be required source water from shallow aquifer, currently being tested The NE and SW blocks are expected to be waterflooded thereafter Phase 2 project comprises part of the NW area, previously partially waterflooded by Texaco in the 1960s The Company intends to use existing wells where possible to minimise the expenditure Fault blocks within the Beach Marcelle field Locations of future injectors / producers on SE block 13

14 BOPD Production makeup to date Production levels since December 2014 have declined due to natural decline rates Minimal number of new wells were drilled since December Production kept at approx. 600 bopd level through workovers, new perforations, pilot waterflood Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Pilot Waterflood New Perforations New Wells Since 2015 Old Wells Before

15 Actions taken to improve operational performance RRDSL added four brand new rigs to its drilling fleet and have been hiring senior drilling staff to operate it Repairs and upgrades have been completed on the existing two rigs, which will continue to be used for drilling Numerous management changes were completed in Trinidad during the year with addition of senior management staff and will continue as necessary New completion projects commenced on the existing wells to increase production (called new reserve tests) - involves perforation of promising oil zones which have not been previously tested Use of new technology such as Stratagem to minimise geological risk Optimisation of Morne Diablo pilot waterflood project Upgrades of electricity systems to minimise electrical outages underway Stringent reporting requirements put in place between Range and the drilling contractor to improve drilling efficiencies Expedited internal approval processes for well site location building Implemented project tracking to enhance planning and approval processes Range s HSE and gathering station teams won a number of awards at Petrotrin s annual HSE Leadership Forum, including the top award for best all round lease operator 15

16 Summary and outlook Focused on executing the strategy and delivering the plan Summary Focused strategy and simple plan Deliver production and reserves growth through implementation of waterflood projects and development and exploration drilling Financially sound Robust balance sheet, well funded work programme, and strong liquidity Coherent growth Multi-well high impact E&D programme in Trinidad underway (fully funded), waterflood projects to commence in 2016 (subject to funding through trade finance package) Board and management Experienced team, invested in the Company personally and aligned with shareholders interests Active ongoing newsflow campaign Commencement of drilling of four new rigs Multi-well drilling programme, aimed at production and cashflow growth Exploration programme on the Guayaguayare block, including drilling of two exploration wells Exploration programme on the St Mary s block Finalisation of US$50 million trade finance facility Implementation of large scale waterflood projects Potential asset acquisitions Continued focus on cost reduction Remaining non-core asset divestments 16

17 APPENDICES 17

18 Capital structure overview Share Price* / AU Market exchange Ticker Market Capitalisation* Ordinary Shares on Issue Options on Issue Cash (as at 30 September 2015) Debt (as at 30 September 2015) Year End *As at 20 November 2015 Major shareholders: Beijing Sibo Investment Management LP (China-based investment fund) 32% AIM / ASX RRL / RRS 30 m / AU 68 m 7.6 Bn c. 1.1 Bn US$24.9 m US$2.6 m 30 June Abraham Ltd (Hong Kong-based sophisticated investor) 9% Private Stakeholders c. 50% Directors and Management 0.5% Executive Team Yan Liu Chief Executive Officer and Trinidad General Manager Over 18 years of accounting and corporate advisory experience in China and Australia. Previously, Chief Financial Officer with AIM listed China Rerun Chemical Group Limited. Nick Beattie Chief Financial Officer Over 20 years of experience in finance working with a range of international banks. Most recently, a Managing Director in the BNP Paribas Upstream Oil and Gas team in London responsible for leading the bank relationships with UK focused independent E&P companies. Lijun Xiu Trinidad Deputy General Manager and Chief Geologist 30 years of geological experience working for Jilin Oilfield Research Institute of Petroleum Exploration & Development (a division of China National Petroleum Corporation), where most recently he was a Deputy Chief Geologist for Jilin oilfield located in Songliao Basin, China. Walter Cukavac Trinidad Director of Operations Geologist and geophysicist with over 18 years of experience in the growth and development of onshore projects in Trinidad, which includes initiation of the first waterflood EOR project by an independent operator, and drilling over 300 wells. 18

19 Strong strategic partnership with LandOcean Range continues its partnership with LandOcean, an emerging international provider of a wide range of technical and production services In 2014 Range entered into an Integrated Master Services Agreement, whereby LandOcean will act as the preferred oilfield services contractor to Range in Trinidad Under the first US$5 million Purchase Order, LandOcean provided geological and engineering studies of waterflood projects: Screening studies of all potential horizons and areas that could benefit from waterflooding Technical review of additional reserves and production rates that could be achieved by waterflooding priority areas, including new well requirements and re-use / recompletion of existing wells Identification of water volume requirements Cost estimates of subsurface and surface infrastructure requirements for each project, and screening economics In collaboration with Range, identification of priority waterflood projects Joint presentations to Petrotrin and the MEEI of detailed waterflooding plans for the priority projects Subsequently, Range entered into the second Purchase Order of further US$50 million, which covers a wide range of activities over the coming years In 2015 LandOcean acquired Range s drilling business in Trinidad and added four brand new drilling rigs to the fleet LandOcean provides Range with an extended 12 month credit facility on its drilling services, which allowed the Company to commence its drilling programme and make repayments from future cashflows 19

20 Trinidad reserves and resources (as at 30 June 2015)* Reserves mmbbls 1P P P 27.6 Resources mmbbls 2C 3.2 Prospective 91.3 These estimates do not include highly prospective St Mary's and Guayaguayare licences *The reserves and resource figures are based on the independent reserves report which was completed by Forrest A. Garb & Associates, Inc. effective January 1, 2014, as well as figures prepared by Company s staff, and external consultants, LandOcean Energy Services Co., Ltd, from production, wells drilled and waterflood studies. The information on petroleum reserves is based on and fairly represents information and supporting documentation reviewed by Dr Douglas Field. Dr Field is a petroleum and reservoir engineer who is a suitably qualified person with over 30 years experience in assessing hydrocarbon reserves, and holds a PhD in Organic Chemistry. Dr Field is a member of the SPE (Society of Petroleum Engineers) and the PESGB (Petroleum Exploration Society of Great Britain). Morne Diablo drilling operations 20

21 Why is Trinidad & Tobago attractive for independents? Trinidad and Tobago is an established oil & gas economy Leading oil & gas producer in the Caribbean (net exporter of oil and gas) Oil & gas accounts for 40% of GDP and 80% of exports Well developed infrastructure and large modern refinery capacity T&T key facts Capital Population (2015) GDP (2014) Port of Spain 1.2 million US$ 28.8 billion Operations dominated by national oil companies for a long period of time, increasing presence of international players in recent years Low risk onshore oil development opportunities Main focus has been on offshore gas, therefore onshore resources are relatively under-exploited and provide unique low risk development opportunities, including secondary recovery projects Ability to rapidly generate value from production Stable and increasingly attractive fiscal regime Recent changes to the fiscal regime improve the value companies can generate from their investments Country credit rating Crude oil proved reserves (2014) Crude oil production (2014) County comparison to the world on crude oil proved reserves S&P: A, Moody s: Baa2 728 mmbbl 112,000 bopd 42 Source: CIA World Factbook, S&P, Wood Mackenzie Incentives for investment in oil development projects included in 2014 financial bill (includes substantially increased capital allowances for development and exploration drilling) 21

22 Trinidad geology and oil prospects Trinidad lies within the Eastern Venezuelan Basin, with the petroleum of Trinidad generated by prolific Upper Cretaceous source rocks, equivalent to the La Luna and Querecual formations in Colombia and Venezuela Range s blocks are located in the mature Southern Basin. The total production to date from this basin exceeds 1.5 bn bbl of oil There are significant resources of oil and gas remaining to be found in the various geologic basins of Trinidad & Tobago There are estimated further 3 bn bbl of oil which is potentially recoverable using enhanced recovery methods (Krishna M. Persad PhD, President, Geological Society of Trinidad and Tobago) Trinidad lies within the Eastern Venezuelan Basin Range s blocks are located in Southern Trinidad 22