Range Resources, dual listed exploration and production energy company with the largest private onshore acreage in T&T, has signed an agreement with state-owned Petrotrin to reduce the overriding royalty rates (ORRs) on its producing Morne Diablo, Beach Marcelle and South Quarry fields.
The revised ORRs, which will apply when the received oil price is below US$50 per barrel, became effective from March 16 and will apply retrospectively to sales made from February 1 onwards.
“Assuming a WTI (West Texas Intermediate) price of US$45 per barrel, this change will have minimal net revenue benefit to Range at current production levels. However, the impact will progressively increase at higher production levels with the net revenue benefit estimated to be approximately seven per cent at 2,500 bopd, assuming the same oil price,” the company said a media release yesterday.
It added that the reduced ORRs are particularly encouraging because Range Resources is committed to growing production in T&T. It said it was a “welcome incentive introduced by Petrotrin during this period of sustained lower commodity prices.”
The company also noted comments by Finance Minister Colm Imbert in his mid-year budget review held on April that Government plans to review the level of supplemental petroleum tax (SPT) on crude oil prices moderately higher than US$50 per barrel. This review is expected to be completed by September.
Range Resources, which has been operating in T&T since 2011, currently operates three producing onshore licences at Morne Diablo, South Quarry and Beach Marcelle, with exploration acreage on its Guayaguayare and St Mary’s licences.
The company’s growth strategy is based on oil production, cashflows and developing discovered resources, underpinned by ongoing large scale work programme, combined with substantial reductions in operating,general and administrative costs. Range Resources has identified implementation of its waterflood projects as highest priority.