Current RRC Stock Info

Utica/Point Pleasant well sets Appalachia record
Range Resources (ticker: RRC) announced today its 2015 capital budget and initial results from its Utica/Point Pleasant well located in Washington County, Pennsylvania.

Range has set its 2015 capital budget at $1.3 billion, a decrease of 18% versus its 2014 capital budget. The company said that the decrease is a result of improving capital efficiencies from its Marcellus activities. According to the company’s Q3’14 quarterly report, Range will drill approximately 12% of its Marcellus wells in...

Analyst Commentary

Capital One Securities (12.15.14)

RRC announced that its long-awaited first Utica/Point Pleasant well had an avg 24-hr IP rate of 59.0 MMcf/d against simulated pipeline pressure and conditions during the initial flow back. Located in Washington Co, PA, the well included 5,420 ft of lateral and 32 frac stages. Adjusted for lateral length, the IP rate was 10.9 MMcf/d per 1,000 foot of lateral. This looks to be a record for any horizon drilled in the Appalachian Basin and is also the highest IP rate of any Utica well. The 10.9 MMcf/d per 1K lateral ft compares favorably with other dry gas Utica wells, including SGY’s Pribble well (30.0 MMcf/d on 3,605 ft lateral, or ~8.2 MMcf/d per 1K lateral ft), MHR's Stalder (32.5 MMcf/d on 5,050 ft lateral, or ~6.4 MMcf/d per 1K lateral ft) & Stewart Winland (46.5 MMcf/d on 5,289 ft lateral, or ~8.8 MMcf/d per 1K lateral ft), and GST's Simms (29.4 MMcf/d on 4,447 ft lateral, or ~6.6 MMcf/d per 1K lateral ft). RRC has ~400K net acres in SW PA that it considers prospective for the Utica/Point Pleasant and we currently give it $2,500 per acre of value, or $1.0B ($6.00 per share). We note that every $1,000 per acre of value translates into ~$2.40 per share net to RRC. The strong result effectively pushes the Utica dry gas boundary deeper and eastward and could have positive implications for others, including RICE, AR, MHR, ECR, and SWN (assuming its acquisition of CHK’s Southwestern Marcellus acreage closes). The cost of the well was not disclosed, but RRC had planned a significant amount of science work. We also note the complexities of the deep formation, as evidenced by MHR’s difficulties over the weekend w/ its well (see MHR section later in this report), so these wells will likely be complex and relatively expensive.  

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