Range signs up for Consort's Puntland contract

 

July21,  2006

 

 

 

Melbourne-based explorer Range Resources has signed a six-month option to acquire Australian partner Consort Private's 49.9% stake in the contract of work (CoW) governing its oil and minerals concession in Somalia's autonomous region of Puntland, writes Barry Morgan.

 

The deal requires a $30 million payment upon shareholder approval, plus raising about $25 million of capital and the completion of one well. A 2.5% net royalty is payable on all Puntland projects.

 

Range has, as expected, also appointed Sam Jonah, the Ghanaian non-executive chairman of NYSE-listed Anglo Gold Ashanti, as non-executive chairman.

 

Jonah enjoys a formal advisory role with several African presidents, including Ghana's John Kufuor, Nigeria's Olusegun Obasanjo, South Africa's Thabo Mbeki and President Mohammed Ali Hersi of Somalia's Transitional Federal Government.

 

The flexible four-year CoW has a repeatable option for easy extension upon the formal identification of exploration areas.

 

Range now controls both blocks 28 and 29, which lie in the Nogal Graben, and Agip's old blocks 31 and 34 in the Darin basin. Senior Range executive Mike Povey said the company "was now in a position to define its preferences and relinquish lower-prospectivity areas to the government, some of which have been drilled in the past, thus opening the area to new players".

 

Meanwhile, Korea National Oil Corporation has negotiated a one-month extension on its commitment to carry out diligence on a proposed 75% farm-in to the Puntland CoW.

 

©2006, Upstream.