Business
SOMALIA: Range to spin off Puntland region assets
May 30, 2012 · 31 Comments
Photo: Range Resources chief executive Peter Landau says the spin-off will shift attention to the company’s other assets (Marie Nirme/The Australian).
SYDNEY — THE Australian market’s affair with the controversial Somalia exploration assets of Range Resources looks set to come to an end as the company prepares a spin-off of the projects on to London’s AIM board.
Speaking to The Australian at the ASX Small to Mid Caps conference in Hong Kong, Range executive director Peter Landau said the spin-off would help focus attention on the company’s other assets in Trinidad and Colombia.
Range became one of the first Western companies to move into Somalia, in 2005.
The company’s efforts to operate in the war-torn nation have regularly attracted controversy, with the local authorities at one point accused of being linked to piracy in the region. Range’s perseverance resulted in the company and its joint venture partners this year drilling the first exploration well in the country for more than 20 years.
But with production from Range’s Trinidad oil fields continuing to grow, Mr Landau said a spin-off of the Somalia interests would allow the market to provide more uncluttered valuations of the assets.
“What we’ve seen is Trinidad doesn’t get valued because all the punters trade Range on Puntland. So let’s take Puntland out, give (Range investors) the free stock, and have a separate AIM-listed stock,” he said.
Range’s joint-venture partners in Somalia, Horn Petroleum and Red Emperor Resources, are covering the company’s share of costs in the first two exploration wells.
The first well this year intersected oil-bearing sands, but it remains to be seen whether the reservoir is capable of flowing oil at commercial rates.
Drilling of the second well is to begin soon.
Away from Somalia, Range is focusing on lifting production in Trinidad from about 800 barrels of oil a day to about 2500 by the end of the year, a lift that would see the company generating about $30 million in free cashflow.
“Trinidad is always going to be the focus. It’s got 15 million barrels of (proven reserves), so we can’t spend the money quick enough,” Mr Landau said.
“Every time we put another well in we’re getting between 50 and 100 barrels a day.
“These wells are paying back in two to three months, and they’ll keep going for 20 years.”
Range is also set to shortly begin a sale of its oil and gas assets in Texas, which Mr Landau said should fetch about $50m to $70m in the current market.
The proceeds from that sale would be invested into Range’s recently acquired acreage in Colombia. Range has the right to earn a 65 per cent interest from two licences in the Putumayo basin.
By Paul Garvey
The Australian
May 30, 2012
Follow @somalilandpressTags: Australia, Horn Petroleum, Oil, Puntland region, range resources, Red Emperor Resources, Somalia, Trinidad
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Mr. Landau is basically telling the investors there's no enough oil in Puntland, therefore, the shareholders won't receive dividends this quarter, however, the loss we had sustained thus far in there will be mitigated by auctioning our assets in Texas, revamping our oil production in Trinidad and acquiring more oil potential acreage in Colombia in which the stakeholders might get insignificant returns in the next quarter should the the company forecasted plans funneled through. All this pep talk sermon is a lame excuse.. I'm glad I cashed out my few battered shares I had with Range resources before I almost quit my day job…
Folks, I'm going to go big now, to recoup my loss, how? the stakes are the very following question:
Is Somalia going to have a functioning government before the end of 2012? yes or no. My choice is NO. I'll bet very penny I've got on this choice. I can see myself becoming an instant millionaire overnight. you don't have to even wish me a good luck because this is a sure bet.
Osman Qaal
Spin off means abandoning yea? Meaning no oil found in Puntland of Somalia proper. But De Jure
1960 Somaliland Republic could prove high potentially Oil rich (Sea/Land). Let's see what happens.
Cheers.
nooooooooo!
is not abandoning it is more like separating their investment portfolio or in other words diversification of assets in their portfolio. in this case their portfolio consists of Colombia Trinidad and Georgia and punt-and Somalia if they spinoff puntland ( puntland operations are less advanced and commercial oil is not proven yet, portfolio will be more profitable ) for example when they reached rock bottom of drilling last month in daroor they could not prove oil traditional way and needed special equipment to check commercial oil so they stopped and ordered equipment and moved to second well this caused investors to panic and share devaluation. by the way i work for investment bank in London and follow Somalia oil closely
Yes they did abandon that trouble area of Puqland, because they realized that prospective area belongs to the Somaliland, and the dry well that they drilled in Puqland area has no potential prospect at all. No oil company will allow themselves to risk were they see, there is a risk at the horizon, and crazy Faroole only sees the dollar sign, and believes he will enrich himself fast. He does not know, the brain and acknowledge behind those who run oil companies.
You will see him now liking the red lips ass soon, because of this new development, because the future he thought he has, is now burned to ashes.
Nothing was abandon They shift drilling different area 3km to north This area has largest oil reserve in somalia.so stop This childish mind you will get your share of The revenue from This oil so Atleast silanyo whould not rob or bush poor people of Their land in hargiesa.
which language are you writing and what is puqland?
fix yourself and stop the hate we are all somali and brothers.
This is not true just it is part of smearing campaign by some news outlets , i can confirm to you that i have contacted to Range resource LTD and it says that it is committed to its work in Puntland, This company holds 100% working in interest of the off- shores of Nugaal region pf Puntland, Somalia. you the people of secessionist enclave of north western Somalia always support anti Somali issues and propaganda and this portrays your hatred to our people, this report comes a days after the Horn Petroleum confirmed the presence of oil systems in the Dharoor Basin of Puntland , the company is drilling the second well of Shabeel-norh. Horn Petrolum says it is now undertaking the testing of the oil in Shabeel-1 of Dharoor basin. in other reports suggest thta Puntland itself is ranked at the top of 20Th oil richest countries in the world. in Somaliland they are our brothers we dont have any big problem with them , we can work with them to secure mutual development. Our president Mr Farole have been repeating his commitment to share the oil returns with his fellow brothers in South and north west regions , this is very impressive , so my brothers there is no reason to welcome in joyful manner to this fabricated news i urge you to maintain some courtesy . thank you
@AL-hakim.
your right bro how you palance your comments it seems your civilize person in all direction & well manner.on The other hand we have osman5 whenever he sees any artical about Puntland whether negative or positive gets Analytic shock probably suffering dissociative identity disorder or could be schizophrenia as a Psychologist i know when person speakes or writes.
Ok.If your sentiments are true then say what you guys think of kayse.
Al-hakim,
Range resources will pack up and leave from Puntland in a month or so, it will no longer pursue oil explorations in Puntland at the end of July 2012.. I hate to be the one who brings this to you but that's the fact.
Osman Qaal
@osman5
What a cock you are. You sound bitter over your losses on Range. I am invested in AOI, RMP, RRL and HORN and I can tell you that this is the beginning of a new oil frontier. They don't grow overnight. Stop talking rubbish.
They didn't abandon it. Spin off is when you create a sub-company or subsidiary that operates independently. Range is doing this to cover themselves from any lawsuits and other issues that could arise from Puntland because after all its a disputed assets.
If they find oil and Somali government decides to block it, Ranges will just distance itself from it and say we have nothing to do with that minor company.
Ranges is now moving its main focus on Trinidad. This news is just a business way of saying there is little hope in Puntland.
I am surprised! Kayse this the first comment of yours I have read which is not biased but fair and accurate… lool
Putland+Piracy=Couruptionland
you enjoy every negative news about Puntland. this is the path of the Satan with Adam, This is not good I saw so many young people from Somaliland working in Garowe and Bosaso restraunts, if we get oil it is good for all Somali speaking people, so //i think it is time should focus what each somali would do about their development not wasting time in politics and intercaln competition. We are the victims of our ourselves
Although it is the 21st century we Somalis still have the same pre modern mindset we had when we were Pastoralists fighting over meagre resources. The sad truth is even within Somaliland, Puntland or any other place when it comes down to it we would not be united with one another to exploit any resources there will always be clan and sub-clan suspicion that will hinder progress.
Forget about the spin off of the Daroor Valley Basin…it proved no oil found and remains standstill,
not risking farther meaning as good as abandoned. But if Makharboy Warooz territory of Nugaal,
doesn't all Warooz and their District townships fall within the Sanaag Province (Capital Erigavo) which's
integral parts of the Somaliland International De jure 1960 demercation Colonial borders? Then how come
the Nugaal Valley basin is claimed by the rogue thieft of Puntland de facto breakaway Somalia proper?
Somaliland Republic should sue Puntland for this illegal mafia thieft scandal. The TFG should also be
concerned of the bad behavour dare devil attitudes of the Puntland pundit authority headed by
ruthless Faroole and his monsters teamesters group. Puntland was created to make fitna between
Hargeisa and Mogadiscio legit Govts of all inclusive Somalia.Behold Puntland..your fitna time is up no more.
It has to be down-sized downgraded to zero tolerance.
Cheers.
cheeeers d jure 1960.
s/land region is somali region so stop taking your never ending grievences to Puntalnd.
There are conservatively 70-130 million barrels of oil from Shabeel-1 alone. I don't know what your source is but you're sadly misinformed.
Oke we need to quit this stupid mentality. I am from Somaliland and Puntland/Somalia have found oil why cant we say alhamdoullilah for them. Not everybody in the south is Siyaad Bare. If they can find oil than they wi not have to rely on kidnapping ships in the see for randsom money and the people them selfs will have enough money to kick al shabaab but back to where ever they came from.
Things happens, wars happen, hatred happen although i hate haters of any other Somali people. But we ask Allah all the time to forgive us for our mistakes, but why cant we forgive their mistake too. Some of them where driven by hate and therefore attacked us and wanted to kill us all. But thanks to Allah that is not did not became the realty and they got they got what they diserve for the last 21 years. Enough though, i really dont want other Somalis to die. They hurt themselfs enough. I think the best Idea is to help our brothers and sisters to regain stability and prosperity again and than talk to them to go on our way as Somalilanders. I mean 1 more Muslim country (58th Muslim) wont hurt eventually and after that we must still work together to became like Qatar and the UAE ;) … Why not? We really news to stop fighting, enough is enough. Inshallah, viva Puntland/Somalia, viva Somaliland, viva Djibouti, viva Ethiopia 30 million brothers and sisters, viva to Kenya Somali brothers and sisters. I love all Somalis, the past is not for nothing the past, today is here and let talk, work and walk together for a better Somali future. The future will be therefore bright for us all, including Somaliland and Puntland/Somalia inshallah.
Spoken like a trueeeeee somali brother
What he is saying is simply lets all hope they find oil so that they dont have to resort to stealing and piracy, which is what they do now. Puntland is basically a criminal enterprise and a cancer to all Somalis in general, allah does not bless those who do mischief in the land, and anybody who supports it is simply condoning blatant criminality.
On the topic of this article, Range resources are not abandoning puntland but spinoff is simply a financial jargon for a polite way of saying we messed up so that the Puntland enterprise alone will not effect the shares of the company by offering shareholders options to buy shares of other prospective plots in different regions, because they dont want their abilty to raise capital for other ventures tainted by puntland.
Here we go agian,another lose angry bitter confuse hate Embeded to his bone dog(too much cuqdo).calling people They are cancer shame on you degenerate lowlife person,Puntlanders work hard what They got now with no infrastructure Today 3.8 million people inhabit with beace & tranquility,first somali state to drill oil will get soon waiting new equipment from abroad, piracy incident does not happen usualy in Puntland put galmudug,Puntland could seek if it wants independent state from rest of somalia no They want to keep somalia intact Also not interested becoming member of Delusionist club.
naah hesspoken like a true faqaash.
This guy is definitely spinning off lies and foolhardy. So far the only stock that has material value in Puntland is piracy business. We will beleive you when we see a gushing oil from the desert of Nugal valley.
And when they stop kidnapping and piracy acts. Puntland recently kidnapped a Somaliland chartered ship and charged a hefty ransom to release it. Please tell where is the brotherhood in that. Puntland is nothing but a cancer on Somalis back.
cimraan
every time you insult million of muslims calling them all pirates because you have hate in your heart
so much hate it is is eating you inside. why dont you tell us how it feels to be bitter man?
i am puntlander and in akhira you will answer in front of Allah. you and me will be in front of allah and you and lots of people in this website testify to allah when i was pirate. see u in aakhira
Truth hurts baby. I mentioned an incident that happened. And please tell me what is the nationality of most pirates captured. You can pay a visit to Hargeisa Main prison and start counting the number of pirates from puntland. Are you going to deny that and repeat the stupid lie that they are marines guarding our sea shore. Yes, we will go to AKHIRO AS YOU SAID, and I trust in Allah’s justice. I can tell you right now I hate pirates, thieves and those who do nothing else but Fitna.
everyone knows the pirates in hargeisa prison are not from puntland. they are poor people from south and your tribe are pinping them
@borama.
Tell Them some of These creatures who are obsessed Puntland is doing That This and so forth.taking Their never ending some old movie grievances to somali society who are trying to heal.small amount of pirates held in hargeisa not from Puntland put galmudug & south,i don’t Think if There’s any puntlander will Accept go hargiesa as a prisoner, puntland goverment have The facility to do so already There’s agreement between Puntaland & maritime Authority.
AntoninusPius,
My feedback or comments are always fair and balanced walaal. You might not agree with it when your at the receiving end but they always on the subject.
Ranges is running away with no significant discoveries. They feel its not worth any more risk or investment and they must focus on Trinidad which has proven deposits that will return them the values that they need to keep their investors happy.
Wan baxsanaaya lakin garankan ku reebaya weeye…wont leave you empty handed because if they do that, their shares will temple—so they don't want to send a signal that will force shareholders to sell off all their shares and run away.
This is slowly disconnecting.