TIDMRRL
RNS Number : 9748K
Range Resources Limited
02 September 2019
Range Resources Limited
('Range' or 'the Company')
3 September 2019
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE
("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
DEBT RESTRUCTURING AND TRINIDAD SALE AGREEMENTS SIGNED
Range, an international company with oil and gas projects and
oilfield service businesses in Trinidad and Indonesia, is pleased
to announce that following continued negotiations with the
Company's debt holder LandOcean Energy Services Co., Ltd.
("LandOcean"), the parties have successfully signed a binding
conditional Sale and Purchase Agreement for the sale of Range
Resources Trinidad Limited ("RRTL") to LandOcean (the "SPA") in
exchange for (i) offsetting all outstanding debt and payables
(including the convertible note) due from Range and its
subsidiaries to LandOcean and its subsidiaries, and (ii) a cash
consideration of US$2.5 million (the "Transaction").
Key highlights:
-- Binding conditional agreements signed with LandOcean for the sale of RRTL in exchange for offsetting all
outstanding debt due from Range to LandOcean (currently estimated at c. US$91 million) and cash consideration
payable to Range of US$2.5 million;
-- From the date of signing the SPA, all payables by Range to LandOcean under any debt agreements will be deferred,
pending completion of the Transaction;
-- Upon completion of the Transaction, the Company's indebtedness will be fully extinguished and all debt agreements
will be terminated;
-- The first tranche of the cash consideration of US$0.5 million will be payable upfront as deposit. Range will
provide mortgages over its workover and swabbing rigs as security, with such mortgages to be released upon
completion or termination of the SPA;
-- The completion is subject to shareholder and government approvals;
-- Range's shareholder meeting to consider the Transaction is planned for November 2019;
-- As part of a wider restructuring, the Company continues to evaluate new opportunities and to review its strategy
with regards to the drilling business in Trinidad and interests in the oil and gas project in Indonesia.
Range's Chairman, Kerry Gu, commented:
"I am delighted that we have been successful at signing this
milestone agreement with LandOcean, which (if completed) will allow
the Company to be completely debt-free and have sufficient cash
resources to progress with new opportunities. The removal of debt
is a fantastic outcome for the Company's shareholders and is vital
to restore our financial health, increase liquidity and improve
shareholder sentiment. I am also pleased with the consideration
value of RRTL of almost US$95 million which is a testament to the
quality of our Trinidad upstream assets.
Over the coming months, our focus will be aimed at securing the
necessary approvals to complete this transformative transaction. As
part of a wider strategy, we will also continue to evaluate new
acquisition targets and review opportunities for our drilling
business in Trinidad and interests in the Indonesian oil and gas
project.
I am very excited about the future of our Company and once again
would like to thank our stakeholders for their continued support
during this process."
Key terms of the SPA and revised debt agreements
West Indies Exploration Company Limited, a wholly owned
subsidiary of Range Resources Limited, registered in Trinidad and
Tobago, has entered into the SPA with LandOcean Hong Kong
Investment Holding Group Limited, a wholly owned subsidiary of
LandOcean, registered in Hong Kong, for the sale of 100% share
capital of RRTL.
On completion, all outstanding debt from Range and its
subsidiaries to LandOcean and its subsidiaries (including the US$20
million convertible note) will be fully repaid by offsetting
against the consideration and all underlying debt agreements will
be terminated. From the date of signing the SPA and up to the
completion date, all payables by Range to LandOcean under any
underlying debt agreements will be deferred.
The total current outstanding balance payable to LandOcean is
approximately US$91 million. This balance includes a US$20 million
convertible note. The maturity date of the US$20 million
convertible note will change to the earlier of the date on which
completion occurs under the SPA or the longstop date (being 30 June
2020). As part of the agreements, LandOcean undertakes not to issue
a conversion notice.
In addition, LandOcean will pay Range the total cash
consideration of US$2.5 million, payable in tranches as
follows:
-- US$0.5 million to be paid upfront as a deposit (the "Deposit");
-- US$1 million to be paid within five (5) business days of the
approval of the shareholders' meeting of LandOcean (the "First
Payment");
-- The Deposit and the First Payment are subject to Range
procuring mortgages over seven (7) workover and swabbing rigs of
Range Resources Drilling Services Limited, namely rigs 2, 3, 6, 9,
10, 11, 12. The rig mortgages will be discharged and released upon
completion or termination of the SPA;
-- If the key conditions for completion are not satisfied by 30
June 2020, the Deposit and the First Payment (together with
interest accrued at 8% per annum) will be repaid to LandOcean. If
all conditions are satisfied but LandOcean chooses not to proceed
with completion for any reason, the Deposit and the First Payment
will be retained by Range; and
-- US$1 million to be paid within five (5) business days of the
completion date (the "Final Payment").
Completion of the sale is subject to satisfaction (or waiver) of
the following key conditions:
-- Approval by Range shareholders at General Meeting of the
Company, as the Transaction would be a material disposal falling
under AIM Rule 15 and the ASX Listing Rules and Corporations Act
2001 (Cth), expected to be held in November 2019;
-- Approval by LandOcean shareholders at General Meeting of
LandOcean, expected to be held at the end of October 2019; and
-- Approvals by the government of Trinidad and Tobago.
The agreed long stop date for the Transaction is 30 June 2020.
Further details will be provided in the Notice of Meeting of the
Company and an Independent Expert's Report which will accompany the
Notice of Meeting, expected to be dispatched to shareholders during
October 2019.
Refundable deposit payment
Range and LandOcean have agreed that the US$2.8 million
refundable deposit will be allocated permanently towards the
consideration and will not be refunded to Range (further details in
relation to the refundable deposit were published in the
announcement on 21 December 2018).
RRTL
RRTL holds interests in all of Range's oil and gas licences in
Trinidad (onshore), namely Morne Diablo, South Quarry, Beach
Marcelle (where RRTL holds a 100% interest), and St Mary's (where
RRTL holds an 80% interest). In the quarterly activities report for
the quarter ending 30 June 2019, the Company reported that total
oil production by RRTL was 45,590 barrels (501 bopd). In the
Company's annual report for the period ending 30 June 2018, net
proven and probable reserves attributable to the Beach Marcelle,
Morne Diablo and South Quarry licences were reported as 15.2
million barrels. RRTL's losses for the year ending 30 June 2018
were US$14,810,577.
Related party transaction
LandOcean is a related party of the Company for the purposes of
the AIM Rules by virtue of its status as a substantial shareholder
holding 17% of the existing Ordinary Shares. The Directors
consider, having consulted with the Company's nominated adviser,
Cantor Fitzgerald Europe, that the terms of the Transaction
(including the mortgaging of the rigs) are fair and reasonable
insofar as the Company's shareholders are concerned.
If the Transaction completes, Range's residual business would
comprise its oilfield services business in Trinidad, and its
interest in the Perlak field in Indonesia.
There can be no guarantee that the Transaction will
complete.
Competent Person statement
The information contained in this announcement has been reviewed
and approved by Mr Lubing Liu. Mr Liu is a suitably qualified
person with over 24 years of industry experience. He holds a BSc in
Petroleum Engineering from the Southwest Petroleum University,
China and is a member of the SPE (Society of Petroleum Engineers).
Mr Liu holds the role of Chief Operating Officer and Trinidad
General Manager with the Company.
The reserves and resources stated in this announcement were
prepared in accordance with the definitions and guidelines in the
Society of Petroleum Engineers (SPE) 2007 Petroleum Resources
Management System (PRMS). The reserve figures are reported
according to Range's net economic interest, net of royalties and
net of lease fuel up to the reference point. The reference point is
defined as the point of sale to third parties. Petroleum reserves
are prepared using deterministic and probabilistic methods. Project
and field totals are aggregated by arithmetic summation by
category.
Contact details
Cantor Fitzgerald Europe (Nominated
Range Resources Limited Adviser and Broker)
Evgenia Bezruchko (Group Corporate David Porter / Rick Thompson (Corporate
Development Manager & Joint Company Finance)
Secretary) t. +44 (0)20 7894 7000
e. admin@rangeresources.co.uk
t. +44 (0)20 3865 8430
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCFMGGLGZVGLZZ
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September 03, 2019 02:00 ET (06:00 GMT)
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