Current RRC Stock Info

Range Resources replaces 292% of production with reserves
Fort Worth-based Range Resources (ticker: RRC) put out a press release Friday announcing that the company’s proved reserves as of December 31, 2016 were 12.1 Tcfe, up 22% from year-end 2015. The company’s reserve highlights are:

Proved reserves increased 11%, excluding acquisitions and divestitures
Proved developed reserves increased 14%, excluding acquisitions and divestitures
Drill-bit development cost with revisions is expected to be $0.34 per Mcfe
Future development co...

Analyst Commentary

After weeks of suspense, RRC finally released the results from the three extension wells (see figure 1). All and all
very positive, in our view, considering that these are step out wells. Two of three wells delivered excellent tests and
proved that the area south of Wildhorse Resource Development's (WRD) RCT field and the areas surrounding WRD's
Weyerhaeuser leases are productive. RRC said that these wells proved that the Lower Cotton Valley pay section
thickens as we move towards the Vernon Field, the gas in place increases and that there are multiple stacked-pay

SunTrust Robinson Humphrey
Range updated its year-end 2016 reserves and also provided an update
to its exploratory well activity that indicated some delineation success in
the extension of North LA, south of Terryville. Notably, the wells to the west
and east of the Vernon field indicated six pay zones with EURs similar to those
found in the Terryville region, though the longer-term production rates appear
sub-par when compared to Appalachian wells. Range also reported impressive
reserve growth, primarily driven by the Marcellus along with a large amount
that came along with the LA acquisition.

With its acquisition of MRD predicated on the economics of just the Terryville field, RRC identified five separate areas to test for future upside. Of the first three wells tested, the preliminary analysis and initial well results to the west and east of the Vernon Field show similar gas in place to Terryville (400 Bcf per square mile) and reserves per well in line with the Upper Red and Lower Red zones at Terryville. While the preliminary results are encouraging, we are not adding the extension areas to NAV until RRC delineates the areas to determine resource size and a development plan.

Wells Fargo
This morning RRC provided an update on its three Terryville extension wells that are contiguous to WRD's Weyerhaeuser acreage, where the company has yet to drill. Mixed results in our view with two of the three recording 24-hr peak initial production at rates lower than that of the 30-day rates on their Terryville type curves, though Range commented that two wells were tracking Estimated Ultimate Recovery (EURs) in line with the company's type curve of 17.5 Bcfe on a normalized basis and Range has permitted for additional wells in the area. While tests confirm resource, also a reminder that delineation of the play likely takes time and not likely a smooth path as extension areas are drilled. Could provide relief for those that had feared the worst given delays in receiving well results, but our take is inconclusive until we receive more production history as well as additional results.  

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