By Jamie Ashcroft
August 28, 2012

Range Resources (LON:RRL) today revealed the disappointing news that the Shabeel North well, in the Puntland region of Somalia, did not encounter oil or gas in the well’s deeper target.

This comes after a shallower target encountered hydrocarbon shows but a drill stem test recovered only water. The previous Puntland well, drilled earlier this year, also had disappointing results.

The Shabeel North well will now be plugged and abandoned.

Range has a 20 per cent stake in the project which is operated by Horn Petroleum. And it now plans to focus its attention on its production and work-over operations in Trinidad.

The AIM quoted firm says it will continue to pursue interests in Puntland. And it will participate in more seismic and two more wells, within three years.

“All the participants in the historic two well programme in Puntland are disappointed that we didn’t strike a commercial discovery first up,” said executive director Peter Landau.

“What shouldn’t be underestimated is the achievement by both the Puntland Government and the joint venture in getting the 2 wells drilled and, more importantly, the continuing exploration program which should see another 2 wells drilled over the next 12 – 18 months.

“From a Range perspective, the continued focus on Trinidad production and development, the exploration programs in Colombia and Georgia, and the Texas sale process will drive the company moving forward in the short to the medium term.

“We will update shareholders later in the week with numerous positive developments in Trinidad and look forward to the imminent growth of our flagship Trinidad Projects both from a daily production and P1 Reserve perspective.”

Today, Range reported that the Shabeel North well was drilled to a depth of 3,919 metres. It penetrated 149 metres of interbedded sands and shales of the Triassic Adigrat Formation.

There were no oil or gas shows, and only miner porosity was exhibited on electric logs. These sands are similar to the Jesomma sands encountered in the previously drilled Shabeel well in respect of log response and oil and gas shows, Range said.

The drilling partners have concluded that the additional testing of these zones was not warranted.

Keith Hill, chief executive of Africa Oil (a 45 per cent stakeholder in Horn), said: “While we were disappointed that we were not able to flow oil from the first two exploration wells in our Puntland (Somalia) drilling campaign, we remain highly encouraged that all of the critical elements exist for oil accumulations, namely a working petroleum system, good quality reservoirs and thick seal rocks.

“We look forward to working with the Puntland government to move our exploration project to the next phase which will likely require us to focus on prospects in different areas of the basins.

“One should keep in perspective that it often takes a number of wells to find commercial hydrocarbons and we plan to continue our aggressive program to unlock the potential of this highly prospective region.”

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