Herbert Smith Freehills has advised Range Resources Limited on its Integrated Master Services Agreement with LandOcean Energy Services Co. Ltd.
Under the services agreement, LandOcean is a preferred services contractor for Range Resources and will provide oilfield services including geoscience, engineering, procurement and construction to Range in order to development its upstream assets. In addition, LandOcean will be entitled to a bonus where its services increase petroleum production in Range Resources' upstream assets. The services agreement is estimated to cover a total of up to US$400 million in services.
As part of the services agreement, LandOcean will also provide Range Resources an option to take up to US$50 million of financing. The financing is available primarily to pay for LandOcean's services but can be used for other purposes.
Range Resources Limited is an independent oil and gas company based in Perth and London, and listed on both the Australian Stock Exchange and the Alternative Investment Market in London. It holds a number of oil and gas exploration and development concessions principally in the Caribbean and throughout the world.
LandOcean Energy Services is based in Beijing and listed on the Growth Enterprise Market Board in Shenzhen. The company provides a range of oilfield services to oil companies throughout the world including its own proprietary software and related technology used in oil and gas exploration and development.
The Herbert Smith Freehills team on the deal was led by Hong Kong partnerHilary Lau. Perth partner Simon Reed advised on the capital markets aspects and London partner John Balsdonadvised on the financing aspects.
Hilary commented:
"We are extremely pleased to have been able to assist Range Resources on this transaction. This transaction provides a unique model for oilfield service contractors to participate in the success of the upstream operators and is an important milestone for our client. Range Resources contacted us on this transaction because of our ability to advise on all aspects of the transaction including our in-depth understanding of the oilfield services sector."
