PERTH (miningweekly.com) – ASX-listed junior Range Resources on Wednesday announced plans to merge with fellow junior International Petroleum, which holds assets in Russia, Kazakhstan and Niger.

Under the proposed merger, Range would offer three of its own shares for every two International Petroleum shares held, valuing the takeover target at around A$105-million.

Range told shareholders that the merger would create a leading ASX- and Aim-listed oil and gas company with a strong production growth profile from the ongoing development of its reserves and resource base.

The merged entity would hold an estimated 1P, 2P and 3P reserve of 23.6-million barrels, 100-million barrels and 264-million barrels of oil respectively, and a best-estimate prospective resource of 802-million barrels of oil and 156 bcf of gas.

The combined current production from the merged entity would be around 1 000 bbl/d of oil, with a target of increasing production to 10 000 bbl/d of oil from conventional operations and an additional 3 000 bbl/d of oil from unconventional production, by the end of 2015.

“Range Resources and International Petroleum have excellent project and management synergies, with advanced oil and gas projects across Eastern Europe, Trinidad, Central Asia, Latin America and Africa,” said Range executive director Peter Landau.

He noted that the merged entity would have solid oil and gas production that was targeted to increase substantially, backed by a considerable reserve and resource base.

“International Petroleum’s production assets in Russia will complement our own core Trinidad assets in building a very significant production base to grow from. International Petroleum’s recently acquired assets in the African nation of Niger will also be a strong exploration upside fit with our own portfolio of large potential onshore projects,” Landau said.

He added that both companies were confident that their respective shareholders would be excited by the value-creating opportunities that would be generated through the merger.

The merger would be subject to a number of conditions, including a 51% minimum acceptance, a confirmatory due diligence, as well as all necessary regulatory and shareholder approvals.

The agreement was also subject to Range completing a A$20-million capital raising and providing A$15-million to International Petroleum by way of a secured loan over the Russian assets.

Range had already received commitments from a number of institutional investors to raise the funds through the issue of around 338.9-million shares, at an issue price of A$0.059 a share, along with unlisted warrants for every two shares.