In July 2009, the Company entered into a Heads of Agreement with the private UK Company Strait Oil and Gas Ltd. to acquire a 50% interest in two oil and gas blocks in the Republic of Georgia which was subsequently reduced to 45% interest.
Range's License Blocks
During the second half of 2011, the Company, along with its joint venture partners, successfully spudded the first exploration well Mukhiani 1, on the Vani 3 Prospect on Block VIa with a planned target depth of circa 3,500m. The Mukhiani Well reached a total depth of circa 1,550m, and following the analysis of the re-interpretation of the seismic supported by the Mukhiani-1 Vertical Seismic Profiling (“VSP”), results indicated that the well encountered previously unrecognised faults that led to possible basement being encountered far earlier than predicted.
The Company engaged new independent technical consultants, NTD Energy during the year, to provide overall technical support with respect to current operations. During the year, the Company along with its joint venture partners and NTD performed a strategic review of the current operations in Georgia and has embarked on a revised strategy which will focus on low-cost, shallow appraisal drilling of historically defined Contingent Resources around the Tkibuli-Shaori (“Tkibuli”) CBM field, which straddles the central sections of the Company’s two blocks.
Tkibuli has been estimated by Advanced Resources International to contain Contingent Resources (mean) of approximately 0.4 trillion cubic feet (“tcf”) of coal-bed methane (“CBM”) gas (Range’s attributable 40% interest is 0.16 tcf). Sand horizons have also been identified around the coal beds, which could add additional, conventional hydrocarbon resources to those estimated for CBM at Tkibuli alone.
Range and its partners also executed a conditional agreement with the Georgian Industrial Group (“GIG”) regarding the joint development of the project and providing a commercial offtake for 100% of the gas produced.