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Current RRC Stock Info

Range Resources extends deal

Range Resources (ticker: RRC) announced Wednesday  that it has extended its previously announced exchange offers for certain of Range’s and Memorial Resource Development Corp.’s (ticker: MRD) notes listed in the table below and the cash tender offers for Memorial’s notes listed below, in order to coincide with the expected closing of Range’s acquisition of Memorial. Accordingly, the offers will expire at 6:00 a.m. New York City time, on September 16, 2016. All other applicable terms and conditions of the offers remain unchanged.

As of 5:00 p.m. New York City time, August 30, 2016, the results of the offers and the related consent solicitations are as follows:

 

Issuer

Title of Series of
Existing Notes
CUSIP / ISIN Aggregate Principal
Amount Outstanding
 

Principal Amount of
Existing Notes Validly
Tendered (and not
validly withdrawn)

 

Approximate Percentage
of Existing Notes Validly
Tendered

Memorial Resource
Development Corp.
5.875% Senior
Notes due 2022
58605QAB5 $ 600,000,000   For Exchange:
$329,244,000

For Cash:
$269,666,000

For Exchange:
54.87%

For Cash:
44.94%

           
Range Resources
Corporation
5.75% Senior Sub.
Notes due 2021
75281AAM1 $ 500,000,000   $ 441,473,000     88.29 %
           
Range Resources
Corporation
5.00% Senior Sub.
Notes due 2022
75281AAN9 $ 600,000,000   $ 563,997,000     94.00 %
           
Range Resources
Corporation
5.00% Senior Sub.
Notes due 2023
 75281AAQ2,75281AAP4
/U75295AC6
$ 750,000,000   $ 737,668,000     98.36 %
 
           
TOTAL     $ 2,450,000,000   $ 2,342,048,000     95.59 %

The Memorial deal

Range CEO Jeff Ventura talked about the deal on a conference call following the deal’s announcement as follows: “Finding an accretive transaction that competes with our results in the Southwest Marcellus is not a small hurdle. Therefore, any potential transaction has to start with high quality assets. The Terryville assets particularly the Upper Red are highly prolific well developed by a high quality technical team was evidenced by their industry leading production rates per well. Similar to the Marcellus, the Upper Red is relatively low risk, highly repeatable, high quality rock.

“Terryville is a stack pay area that provides future upside and the ability to drive operational efficiencies and improvements to our cost structures in the months and years ahead. Terryville also has the advantage of being in close proximity the growing demand and the higher prices near the Gulf Coast, boosting relative returns. When closed this transaction will be immediately accretive to cash flow per share as a result of Memorial’s high margin production.”

Ventura went on to point out that on a pro forma basis, Range will “improve its 2016 margins by approximately $0.45 per Mcfe based on analyst consensus. Memorial also has hedges in place to cover approximately 270 million per day of 2017 production at an average floor price of $3.50, securing a significant portion of the expected cash flow next year.”

The highlights of the deal are:

  • 220,000 net surface acres
  • Geo-pressured lower Cotton Valley
  • Multi-year inventory
  • 5 Tcf equivalent of net resource potential, not including the very attractive southern expansion area
  • Q1 production – 420 million cubic feet equivalent per day
  • Memorial team has achieved a 26% reduction in well cost, a 28% improvement in drilling times, and a 31% improvement in frac execution time.

Range Resources marketing and operational efficiencies with MRD acquisition


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