Range Resources and its Georgian partner Strait Oil and Gas UK have agreed the terms of a Heads of Agreement (HOA) to each sell 10% of their interests in Block VIa and Block VIb in Georgia to Red Emperor Resources.

The key terms of the HOA will see Red Emperor contribute 40% of the drilling costs for the planned two well program (capped at total gross costs of $14m – RMP contributing $5.6m) to acquire the 20% interest in the two blocks.

Range Resources believes the transaction reduces its financial exposure to the two well drilling program through the favorable two-for-one farm-in terms, whilst still maintaining a significant 40% interest in the two blocks.

The HOA entered into with Red Emperor constitutes the execution of a share subscription agreement, pursuant to which Red Emperor will acquire its farm-in interest in the joint venture entity, by the parties by 28 February 2011 (or such later date as agreed by the parties).