Amidst Range Resources Corp.’s small non-Marcellus drilling program for 2011 are two more horizontal and four more vertical tests into the St. Louis limestone that sits beneath the liquids-prolific Granite Wash in North Texas and western Oklahoma.

In late February, the Fort Worth-based producer announced it completed the industry’s first successful horizontal into the limestone in the Texas Panhandle, making 360 barrels of oil, 593 barrels of gas liquids and 13.8 million cubic feet (MMcf) of gas in its first 24 hours—or 19.2 MMcf equivalent.

After three weeks online, it was averaging 872 barrels of liquids and 13 MMcf of gas per day. “So it’s a very, very low-decline well, a very strong well,” John Pinkerton, Range chairman and chief executive, told investors in an earnings conference call in early March.

“It’s one of the best wells Range has ever drilled.”

The roughly 11,000-foot hole into the limestone in Roberts County is within the fairly small footprint of the productive Granite Wash window of the western Anadarko Basin. Of Meramecian age, St. Louis sits below the deepest Wash members—the Pennsylvanian-age Atoka and Upper Morrow—and below Springer sandstone and Chester carbonate.

In the Hugoton Embayment of southwestern Kansas, St. Louis reservoirs have produced more than 300 million barrels of oil. Recently, Occidental Petroleum Corp. made an initial 163 barrels of oil and 0.34 MMcf of gas a day from a vertical St. Louis hole in Haskell County, Kansas. The limestone there is at about 5,700 feet. St. Louis also produces in Illinois and Kentucky, where it occurs at depths of some 2,500 feet.

Meanwhile, horizontal St. Louis tests in the Texas Panhandle had yet to be commercial until the Range well. Recoverable reserves from the test are estimated at 8.5 billion cubic feet equivalent (Bcfe). Range holds 56,000 gross and 46,000 net acres over Granite Wash and St. Louis. In the latter, it estimates it has 71 potential horizontal well locations and unrisked resource potential of 482 Bcfe gross reserves; 280 billion net.

“Plus we’ve identified other areas we think are prospective that we’ll attempt to lease,” adds Jeffrey Ventura, Range president and chief operating officer.

The company’s St. Louis and other acreage within its non-Marcellus portfolio is all held by production, Pinkerton notes, “so we don’t have a gun to our head in terms of having to develop it.”

Thus, near-term beneficiaries of Range and partners’ successful $4.5-million St. Louis test will be other leaseholders in the area, such as Apache Corp., Chesapeake Energy Corp., Linn Energy LLC, Devon Energy Corp. and Newfield Exploration Co.

Pinkerton says that, while Range has opened the limestone play, it will not focus on it right now. Instead, it has some 790,000 net acres over Marcellus to drill and hold by production first.

Some 86% of its $1.4-billion 2011 capital budget is devoted to Marcellus. Some 6% is planned for its oily Midcontinent acreage over Mississippi Lime, which is the subject of this month’s cover story; for St. Louis Lime; the Cana and Woodford shales; and the Wash.

But, Range will need something to do with all the money it expects to produce from Marcellus, he adds: At a $4.50 Nymex gas price, for example, the company estimates its Marcellus program will generate a more than 50% rate of return.

“It’s pretty amazing,” says Pinkerton. “...We believe in what we're doing here and we're absolutely convinced that this is the right thing to do.

“...When you look at 2014 and 2015, at least our numbers suggest we're going to be throwing off a whole lot of cash flow.”

And, its Midcontinent and Permian leasehold will await when Range decides to turn more capex attention to its non-Marcellus acreage. “We’re going to need the Cana, the St. Louis, the Mississippi Lime, and some of the projects we’re doing out in the Permian. We’re going to need those projects to continue to fuel our growth,” Pinkerton says.

Or, Range is open to unsolicited bids. “If somebody comes and makes us a great offer for one of these projects, and we think it’s accretive to net asset value, we’ll take a hard look at it.”