Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Range Resources: the mystery of the $3.48million Colombian Performance bond

By Ben Turney

1 May 2014 13:35

While trawling through the quarterly reports of Range Resources (RRL), I stumbled across yet another mysterious and sizeable transaction. In the quarter ending September 30^th 2013, Range suddenly referenced a “US$3.48million performance bond for Colombia” and included this as part of its cash balance. What is odd about this reference is, as far as I can make out (again!!!), this is the first time Range mentioned this material amount. In the two subsequent quarterly reports this “performance bond” continues to appear as a footnote and it now forms over half of Range’s apparent cash balance. Given how cash-strapped Range is, shareholders would do well to ask what on earth is this all about?

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Comments

Duck and Dive

1 May 2014, 17:28

Google can’t find any reference on the planet to this bond prior to October 2013.

These bonds are typically required by owners as a hedge against some contract not being properly fulfilled.

So is this money that RRL have paid into a bond to provide insurance to the Columbian authorities that RRL will satisfy the terms of a drilling contract?

Or is it money paid to RRL by a sub-contractor to provide RRL with insurance against the sub-contractor failing to honour the terms of his contract?