“Given our continued positive developments in the play, we have accelerated the start date of our five-rig program, originally slated to begin in the first quarter of 2013. We are becoming increasingly confident that the Horizontal Mississippian play will be a high return, low-cost liquids play that complements our Marcellus Shale play in Pennsylvania. Given our large, concentrated acreage position, the Horizontal Mississippian play has the potential to deliver outstanding returns and excellent per share growth for our shareholders for many years to come.”
Determining the core part of the play –
Range has accumulated approximately 157,000 net acres of leasehold in the eastern portion of the Horizontal Mississippian Play located primarily in Kay County, Oklahoma and Cowley County, Kansas. Essentially all of Range’s acreage is located on the Nemaha Ridge which runs primarily north/south and is approximately 15 to 20 miles wide. The Mississippian Lime formation was originally developed many years ago by drilling vertical wells. Over 4,500 older vertical wells have been drilled around and among Range’s leasehold position. Historically, the better vertical oil wells were drilled along the Nemaha Ridge. Along portions of the Nemaha Ridge, there is a Chat component in the formation which provides up to 30% to 40% porosity as compared to 3% to 5% in the Lime portion of the formation. In addition, since the Nemaha Ridge was thrusted up, Range believes that the area along the Ridge has more natural fracturing creating better permeability within the reservoir which enhances hydrocarbon flow. Historical vertical well results indicate that the eastern portion of the play, where Range’s acreage is located, is more “oily” and that the play becomes more “gassy” as it moves west. Over 90% of the historical vertical wells on the eastern side of the play have been classified as oil wells. The Mississippian play is a project that Range has been testing and evaluating methodically since 2006. We deliberately tested the play with over 100 new vertical wells of our own before we moved to horizontal development in 2009. In summary based on our evaluation to date, Range believes that portion along the Nemaha Ridge where we have focused our development will likely represent the “core” of the Horizontal Mississippian Play due to being higher structurally, a higher Chat component, a higher degree of natural fracturing and a higher proportion of oil and NGLs in the production stream.