Range Resources gets cash for Trinidad

Well, it was hardly a secret, but Range Resources confirmed Tuesday it has secured $15 million (£9.25 million) of loan financing to bankroll investment in a rig fleet needed to ramp up production. Eagle-eyed investors had already spotted an inadvertent reference to the news last Thursday, tucked away in the properties of a boring statement advertising a company audiocast.

A subsequent spike in the share price forced the oil explorer to rush out a further statement Friday confirming it was "continuing to explore various financing options (which may result in financing of up to $15 million)." Now, American institutional investor Lind Asset Management has agreed to put up the money, available for 24 months in two tranches.

The total amount repayable is $18.375 million. Lind will also be granted up to 46.5 million share options and another 38 million as security for the facility.

"The financing provides us with the necessary funding to progress our near to medium-term ambitions in Trinidad - notably increasing our production and improving our drilling efficiency," said chief executive Rory Scott Russell. "Once we have successfully made progress in these areas, we believe that we will be in a strong position to obtain longer-term finance."

Range made a net loss of $102.5 million in the year to June, up from $20.3 million last year, although that did include $36.9 million of write-downs and expenses in respect to discontinued operations in Georgia and Texas, plus another $24.3 million write-down on two assets in the Putumayo Basin, Colombia.  Finance costs ballooned by almost $18 million, too.

At least the core Trinidad operation made a "credible" performance with cash profit of $2.1 million. "I believe this is a very encouraging result given the lack of investment in the business during the year and it underlines the potential for significant growth in profitability that can be achieved through increased production," said the CEO.

"Going forward the company is debt free and has secured financing from both Lind Partners and LandOcean Energy Services," adds Emily Ashford at house broker Cantor Fitzgerald. "We expect to see the real fruits of the new management's labour in the half year report for 2015. We reiterate our 'buy' recommendation and place our target price under review."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.