It is currently Fri Apr 27, 2018 4:01 am

World Stocks

Range Resources

RRL Debt profile

(ASX:RRS / AIM:RRL / PINK:RGRLF & RGRYY)
Informed Discussion. No ramping. No deramping.

RRL Debt profile

Post Thu Jan 04, 2018 8:37 pm

Within the recent presentation the following debt positions are shown:-

RRDSL Loans US$21.4m backed by rigs. No repayment date given

RRDSL Acquisition cost US$5.5m payable November 2020

Trinidad Investment cost US$40m repayable April 2020

Convertible Bond (£0.008/share) US$20m repayable November 2019

As at 30th September 2017 cash on hand was circa US$17m

With this level of debt the question is whether Range will be able to change its spots, after years of reporting large losses, and actually turn a profit to repay this debt.

When will the company provide shareholders with their plans to repay or refinance this debt?

When is the RRDSL loan due and will RRDSL make sufficient profit from its oil services business to repay it without relying on RRL funds?

Too many unknowns at present which along with the oil production remaining well below previously promised levels has resulted in a massive lack of confidence in this stock, hence the weak share price.
User avatar
Rexco
 
Posts: 2762
Joined: Mar 2013
Location: In AIM trying to get out

Re: RRL Debt profile

Post Thu Jan 04, 2018 9:29 pm

Rexco - glad you dug this huge pile of debt RRL has.... one of my intentions behind asking for RRLs financials...

if i am a new investor, why should i buy RRL? what are the earnings/revenues, expenses and how am i going to pay this debt back and at what oil price?

Thanks for pulling the debt part...

Best Regards, Fantasy!
User avatar
Fantasy
 
Posts: 2490
Joined: Mar 2012

Re: RRL Debt profile

Post Fri Jan 05, 2018 8:46 am

Let’s hope we are producing a lot of oil by then
kemp91
 
Posts: 1574
Joined: Apr 2013

Re: RRL Debt profile

Post Fri Jan 05, 2018 8:59 am

So against this debt is the income stream of hopefully 1000 barrels average. At current price how long will it take to pay off debt.

Also most companies operate with quite a number of loans. They are not all debt free.
Indi
 
Posts: 51
Joined: Nov 2014

Re: RRL Debt profile

Post Fri Jan 05, 2018 9:10 am

It is the ability to cover interest payments that is more important than the debt. LO can roll the debt as long as interest covenants are intact.
Zippy
 
Posts: 30
Joined: Nov 2017

Re: RRL Debt profile

Post Fri Jan 05, 2018 10:16 am

But LO sold the debt to a 3rd party who may not be so willing to roll the debt. That is the worry for me.
Canaries60
 
Posts: 279
Joined: Oct 2013
Location: Portsmouth

Re: RRL Debt profile

Post Fri Jan 05, 2018 11:41 am

Oh come on. If were increasing bopd and able to comfortably cover interest payments then we will easily find another co to borrow the money from and push out repayment dates at same time.
User avatar
Loadsamoney
 
Posts: 3394
Joined: Mar 2012

Re: RRL Debt profile

Post Fri Jan 05, 2018 12:01 pm

Indi wrote:
> So against this debt is the income stream of hopefully 1000 barrels
> average. At current price how long will it take to pay off debt.
>
> Also most companies operate with quite a number of loans. They are not all
> debt free.

Indi
I don't really think that anyone connected to RRL will be happy with a daily barrel rate of 1000 or even 2000. I think the last drill result plus waterflood will reinforce this.
On the debt side what people seem to overlook is the debt to asset ratio and Range's is actually quite sound.
We have a long way to go but for the first time momentum seems to be building.
Nedkellylandau
 
Posts: 1893
Joined: Mar 2013
Location: Lost on the Range

Re: RRL Debt profile

Post Fri Jan 05, 2018 4:13 pm

Disappointing volume again since relisting. Range didn't do the restructure/rebrand/reboot I was hoping for. As a value proposition, there's little I can see that has happened to drive the volume up.
User avatar
Momo
 
Posts: 4435
Joined: Mar 2012
Location: Had enuff......gla.

Re: RRL Debt profile

Post Fri Jan 05, 2018 6:33 pm

Momo wrote:
> Disappointing volume again since relisting. Range didn't do the restructure/rebrand/reboot
> I was hoping for. As a value proposition, there's little I can see that has happened
> to drive the volume up.

I was thinking along the same lines as you but a rebrand/rename would not only have been purely cosmetic it could have been misread as an attempt at deception. Better that the BOD just say that this is Range moving forward and has learned by past mistakes, particularly by former management and is going to be open and honest about the direction it takes.
Celticheart07
 
Posts: 141
Joined: Jul 2013
Location: Wales

Re: RRL Debt profile

Post Fri Jan 05, 2018 7:55 pm

Loadsamoney wrote:
> Oh come on. If were increasing bopd and able to comfortably cover interest
> payments then we will easily find another co to borrow the money from and
> push out repayment dates at same time.

Easily find someone to refinance and push the repayment out!!!
Yeah I bet they’re just queuing up PMSL
User avatar
boobs
 
Posts: 767
Joined: Mar 2012

Re: RRL Debt profile

Post Fri Jan 05, 2018 8:08 pm

Boobs

As long as we can prove we can repay the interest with ease then yes, I see no reason why we cant get another loan to repay existing ones and push repayments back further

I know its a different type of company but when NTL And TeleWest both emerged from Chapter 11 rescue & massive debts, they merged, paid to take on the Virgin name & spent the first year or so kicking the short term loans backwards thereby improving balance sheet.
IF we can get this bopd up to reasonable levels we can easily afford the interest payments

Lets say we increased bopd by say 1000 - thats nearly $22m revenue per year @ $60 a barrel. Interest on say the $80m loan at say 10% is only $8m a year. Example figures only

Im sure some on here think we've got 2 years to find $80m or go bust - and thats NOT the case, far from it
BUT we do need to see bopd moving up to at least 1500, pref 2000 bopd & with waterflood finally taking off and that latest well producing 120bopd on choke, im sure were on our way. New drill plans and targets will give us a clue & were getting those this month

Well see
Loadsa
User avatar
Loadsamoney
 
Posts: 3394
Joined: Mar 2012

Re: RRL Debt profile

Post Fri Jan 05, 2018 9:33 pm

Loadsa,

The fact is that a lot of the debt has come from working capital costs that should have been repaid over the short term. They used the Land Ocean funds to pay for operating costs and have now in effect capitalised those costs.

I am sure that most people looking to invest money will not be looking at companies that cannot repay their debt but can manage the interest payments. This indicates years going from hand to mouth with no dividends or share value.

I would hope that the RRDSL debt could be restructured so that it is on a repayment basis secured by charges over the rigs and over a longer term based on the depreciating value of the rigs.

The board also need to be transparent re the convertible bond and whether it will be converted into shares in a bit under 2 years.

I would expect the CFO to be able to answer all our questions on how they will restructure the debt profile going forward so that the debt has no undue stress on the company's financials. Debt interest payments do no good to the company's cash flow or share value.
User avatar
Rexco
 
Posts: 2762
Joined: Mar 2013
Location: In AIM trying to get out

Re: RRL Debt profile

Post Fri Jan 05, 2018 11:02 pm

Rexco
No point going over where we blew the money or value for money on LO etc. Its why the bonus's were voted down & Im pleased they were too - a kick up the arse is needed imo

The facts are we owe $80m ish and I was using some numbers to show how easy it will be to pay not only the interest but also repay the capital too

As the end of the day its a question of how much bopd we can get/increase by and hopefully we get realistic and achievable operation plans for 2018. Be good also to see how much sub contracting we do with rrdsl too

I don't like how the money has been wasted either but $80m isnt that scary in terms of interest or repayments. If we're stuck below 1000 bopd in a years time with no progress, then id be concerned

Time will tell

ATB
User avatar
Loadsamoney
 
Posts: 3394
Joined: Mar 2012

Re: RRL Debt profile

Post Sat Jan 06, 2018 7:10 am

Rex/loadsa

Whilst everyone is throwing around the headline debt figure of $80 million, we seem to be neglecting the fact that :

RRDSL Loans US$21.4m and RRDSL Acquisition cost US$5.5m Must also have an equal asset value and hence should have a nil effect on the balance sheet.

We actually had funds available to repay the $20million due loan when it was due but needed it for cash flow, hence we took the Convertible Loan of US$20m repayable November 2019 and some $17million is currently still in the bank. Therefore the net effect to balance sheet is $3 million.

Therefore is the net debt actually nearer $40 million LO outstanding loans, and the $3 million net difference between the loan note and current $17 cash in bank.

Add to this the early loan repayment we have made to LO, plus Indonesia down payment and the net figure of debt looks far more manageable. Of course these assets need refinancing to move the debt forward and be in line with the write down of the assets, but once BOPD starts to produce profit this will be achievable.

As far as the $40million due to LO is concerned, I believe this is way over value and should be disputed and renogiated to an acceptable figure and repayment made in line with earnings going forward.

Rex

Don’t have any illusions that the voting down of bonuses will have any effect on the BOD, as these will no doubt be taken as consultancy fees by the BOD in exactly the same way as Directors take multiples of their published salary.

Just my thoughts
GLA
NDT
NoDubaiTax
 
Posts: 435
Joined: Mar 2012
Location: Dubai

Re: RRL Debt profile

Post Sat Jan 06, 2018 10:54 am

NDT
Thanks for the clarification.
I wonder however if the nice little interest rate package offered by LO might stifle attempts to renegotiate the costs?
We certainly seem to have been well and truly screwed with what we got for $40 mil
Nedkellylandau
 
Posts: 1893
Joined: Mar 2013
Location: Lost on the Range

Re: RRL Debt profile

Post Sat Jan 06, 2018 6:13 pm

Its worth mentioning that we have over $80m of investment that we can claim a variety of taxes back against. Until that $80m is repaid the netback to Range from oil sales must be a pretty high percentage of the headline oil price. I'm not sure how the supplementary petroleum tax currently works but I don't think we can write all of it off against investment. It was 55% at one time but I think there is a floor on that now. I'm guessing that with a headline price of $60 we would netback (pre debt repayment) $40? That is a total guess.

Our latest well flowing at 120 and with 50% per year depletion would flow an average of 90 bopd in the first year. At $40 we would net $1.3m. Probable drill cost around the $1m mark.
So drilling is profitable.

Waterflood on the other hand has had most of the outlay already spent. It is far more beneficial financially to concentrate on waterflooding. The drilling is (net profit wise) a side issue right now. Which brings me back to the only real worry I have with the waterflooding. Where are we going to get enough water to make it work?



Darren
Xbigman
 
Posts: 229
Joined: Nov 2012

Re: RRL Debt profile

Post Sat Jan 06, 2018 9:41 pm

Darren
This extract from one of last year quarterly reports was published on LSE the other day
""Beach Marcelle waterflood
Range is pleased to advise that during the period production commenced at the South East Block of Beach Marcelle field at an average rate of 60 bopd. As the implementation of the waterflood programme continues, Range has accumulated abundant new data and is in the process of making adjustments to the original plan based on the analysis of this data and expediting the surface construction schedule.
Once the remaining work programme has been completed, the water injection rates are expected to increase to approximately 6,000 bwpd.
In the meantime, the Company signed agreements with Petrotrin to use produced water from their operations, which will increase injection rates by a further 700 bwpd. The Company has recently received environmental approvals for this work and commenced construction of the pipeline, which is currently 65% completed. The Company is required to obtain third party approval for a pipeline crossing before it can be fully completed.
Morne Diablo waterflood
During the period, production at the project continued at an average rate of 50 bopd. To increase water injection rates by approximately 3,000 bwpd, the Company signed an agreement with Petrotrin to use produced water from Petrotrin's existing operations. The Company will be required to construct a new water pipeline, as well as the gathering and transfer stations to access this additional water supply with all major approvals already in place. The engineering designs and plans for this remaining work programme are being finalised."
If over the intervening period we have reached anywhere near the figures shown then the water problem is near enough solved.
The water already injected amounts to replacing at least 2 years oil production over all of Ranges licenses so pressure must now be racking up.
Been a lot of positives highlighted over the last couple of days and NDT post on Petrotrin sacking their drill company could be the icing on the cake :-)
Nedkellylandau
 
Posts: 1893
Joined: Mar 2013
Location: Lost on the Range

Re: RRL Debt profile

Post Sun Jan 07, 2018 8:21 am

Ned
Thats a pretty old announcement now and gives lots of future figures that have not materialised. The last figures that were announced as having been achieved had the daily injection rate just below 1000 and talk of another 700 to come. Thats not going to push 3 or 4 thousand BOPD out of the ground in my lifetime.


Darren
Xbigman
 
Posts: 229
Joined: Nov 2012

Re: RRL Debt profile

Post Sun Jan 07, 2018 10:19 am

In July BM WF was producing 40 bopd, having had water injected at a rate of 1000 bwpd. We’re now at 200 bopd from BM, with petrotrin’s 700 yet to start (need new pump).

So, with 1000 bopd seeming enough to get us to 200 over time, where does 1700 bwpd get us?

Was 200 the max possible with 1000 bwpd? Is the production curve proportional to water injection rates, or exponentional / hyperbolic curve?

Either way, the trend is up and as we all know, the trend is your friend :-)

Here’s to a productive and positive 2018.

Rich
Canaries60
 
Posts: 279
Joined: Oct 2013
Location: Portsmouth

Re: RRL Debt profile

Post Sun Jan 07, 2018 11:07 am

Xbigman wrote:
> Ned
> Thats a pretty old announcement now and gives lots of future figures that
> have not materialised. The last figures that were announced as having been
> achieved had the daily injection rate just below 1000 and talk of another
> 700 to come. Thats not going to push 3 or 4 thousand BOPD out of the ground
> in my lifetime.
>
>
> Darren
When you look at the last set of figures 400,000+ barrels of water then over the term of waterflood we are looking at 1000 bowpd which is far from impressive compared to the figures first quoted. Even with a very low initial rate to climb from we should be looking at 300,000 per month!
Nedkellylandau
 
Posts: 1893
Joined: Mar 2013
Location: Lost on the Range

Re: RRL Debt profile

Post Sun Jan 07, 2018 6:36 pm

I recall an announcement about needing to inject 15,000 bowpd to get the waterflood to full production. I was p*ssed off with Range when we were delisted and deleted all my notes so I can't tell you where this comes from but I distinctly remember thinking it was 8 water to 1 oil. I've had a hunt round using google search and its not that simple. There is an initial pressurisation phase that uses huge amounts of water and then a production phase where you are maintaining pressure over the longer term that uses less water. It is clear that we need an awfull lot of water from somewhere.

As for the so called Petrotrin 3000 bowpd, when was that first announced, was it 3 years ago now? And we still don't have it. Joke.



Darren
Xbigman
 
Posts: 229
Joined: Nov 2012

Re: RRL Debt profile

Post Sun Jan 07, 2018 6:54 pm

Found this.

http://petrowiki.org/Waterflooding

Also

http://hbawp-docs.s3.amazonaws.com/sect ... arch13.pdf

Neither gives any water/oil ratio's but are interesting reading.



Darren
Xbigman
 
Posts: 229
Joined: Nov 2012

Re: RRL Debt profile

Post Mon Jan 08, 2018 11:17 pm

In my view the debt the company is concerned with most is the US$40m which they need to repay from cash flow and have 31 months to do it. However as long as they make a major dent in this they will be able to refinance it.

More importantly Range need to focus on increasing productivity at minimal cost so that income provides far better cash flow and profitability than we have seen in the past.

The company has three core businesses now which all need to function profitably. Hopefully this won't take forever and we will see major improvements this year.

Fingers crossed

ATB

Rex
User avatar
Rexco
 
Posts: 2762
Joined: Mar 2013
Location: In AIM trying to get out

Re: RRL Debt profile

Post Tue Jan 09, 2018 12:07 am

In my view the debt the company is concerned with most is the US$40m which they need to repay from cash flow and have 31 months to do it. However as long as they make a major dent in this they will be able to refinance it


Rex

They do not need to repay the $40m from cashflow nor do they need make a major dent into it to refinance it
As long as they can be seen to easily afford the interest payments, other companies will gladly finance it with a nice interest % - and im not talking about Liardaus wonga rip off loans
Yes, in 31 months we either repay or refinance the $40m
I also suspect well need more working capital between now and then, no idea how that will be financed.
The key to affordability of finance is what we can get bopd up to.
Even a 1000bopd increase could give us an extra $22m gross per year & easily cover interest payments and some capital repayments

Time will tell, after all...this is Range !!!
User avatar
Loadsamoney
 
Posts: 3394
Joined: Mar 2012

Re: RRL Debt profile

Post Tue Jan 09, 2018 8:33 am

we are not a million miles away from 1k bopd so let’s see what the next 6 months bring in production
kemp91
 
Posts: 1574
Joined: Apr 2013

Re: RRL Debt profile

Post Tue Jan 09, 2018 3:49 pm

LO will have to roll the loan forward if RRL can't repay.
Zippy
 
Posts: 30
Joined: Nov 2017

Re: RRL Debt profile

Post Tue Jan 09, 2018 4:42 pm

can't repay LMAO

Omaesk statement that
User avatar
Loadsamoney
 
Posts: 3394
Joined: Mar 2012

Re: RRL Debt profile

Post Wed Jan 10, 2018 8:41 am

??? ever BB has it's fool...look at the tripe you spout never mind your ass
Zippy
 
Posts: 30
Joined: Nov 2017

Re: RRL Debt profile

Post Sat Jan 13, 2018 6:17 pm

Loving the optimism here guys.

I think once the water injection issues sorted then we can start to appreciate a much increased bopd

I recall top line figures of 10k bwpd needed to generate 3.5kbopd from beach marcelle alone. ..I'll go find that report for range as I'm sure it was saved somewhere on one of the forums.

Eitherway. ..we are turning a curve and we haven't even considered the rrdsl potential contracts and or the Indonesian asset development

Holding thumbs and crossing toes for more good news in coming weeks

It
User avatar
Invester_Tester
 
Posts: 658
Joined: Jul 2012

Re: RRL Debt profile

Post Sat Jan 13, 2018 6:40 pm

Yes, but how much water are we physically able to get our hands on?

I agree their is positivity around WF and deeper drilling, but is 10k bowpd anywhere near achievable?
Canaries60
 
Posts: 279
Joined: Oct 2013
Location: Portsmouth

Re: RRL Debt profile

Post Sat Jan 13, 2018 7:50 pm

Some people here & on the other 2 boards are suggesting, if we dont get bopd up to xyz within 2 years well go under or have to do a massive raise of cash at a low SP

Not so

As long as we can demonstrate we can comfortably pay the interest off, other lenders will lend to repay LO

1000 extra bopd not only repays interest but also some capital off too.
Im not so sure waterflood will hit the numbers suggested a year ago - mainly due to getting enough water but, it is steadily going up
On top of that we have just got a 120bopd well on choke. Potentially drill 8 of those next year & potentially theres another 1000 bopd and im sure waterflood will also keep increasing
Must not under estimate the importance of that last drill, which was deeper, un-tapped and likely to have less depletion rates than the shallows

Couple all that with some decent paid for PR for a change and Range can (& probably have already) turn the corner

New drill programme is key & may require more working capital to go after similar to the last drill - well see

ATB

Loadsa
User avatar
Loadsamoney
 
Posts: 3394
Joined: Mar 2012

Re: RRL Debt profile

Post Sat Jan 13, 2018 8:16 pm

I for one have been filling my boots.


What's that?........no nothing Nurse. It's not even on.
User avatar
Momo
 
Posts: 4435
Joined: Mar 2012
Location: Had enuff......gla.

Re: RRL Debt profile

Post Sun Jan 14, 2018 5:16 pm

Momo wrote:
> I for one have been filling my boots.
>
>
> What's that?........no nothing Nurse. It's not even on.

Is that with concrete m8?!!!
User avatar
enfranglais
 
Posts: 709
Joined: Oct 2013

Who is online

Users browsing this forum: No registered users and 1 guest

cron

Search

User Control Panel