Range Resources Ltd (ASX: RRS; AIM: RRL) said testing has confirmed a commercial discovery for its Smith #1 well in the North Chapman Ranch area in Texas and that the government of Somalia's Puntland State has now ratified the previously announced changes to the production sharing agreement (PSA) over the Dharoor and Nugaal valley exploration areas.
Regarding the Puntland PSA, Range said the ratification of the changes have now paved the way for Africa Oil to commence operations and drilling of the first exploration well in the region for 16 years, planned to occur by mid-2010.
Last week, Range said it and Africa Oil have modified the terms of the existing PSA over the Dharoor and Nugaal valley exploration areas, where they hold 20 percent and 65 percent, respectively, with Vancouver-based exploration company Lion Energy (TSX-V: LEO) holding the remaining 15 percnet interest.
The amended agreements now provide for initial exploration periods in respect of both blocks that have been extended from 36 months to 48 months with a revised expiry of 17 January 2011. The terms of the exploration programmes have also been altered so that Africa Oil can opt to drill one exploratory well in each of the Nugaal and Dharoor exploration areas, or two exploratory wells in the Dharoor valley during the initial exploration period.
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