Current RRC Stock Info

Range Resources Corporation (ticker: RRC) reported a net income of $49 million, or $0.20 per diluted share.

“The first quarter was a good start to the year, generating record quarterly cash flow while remaining on track to deliver our expected 11% growth within cash flow for 2018. Operationally, Range is focused on translating our peer leading inventory into shareholder value as efficiently as possible. This effort is led by the Marcellus where record long laterals and the utilization of existing pads and infrastructure are a tailwind for capital efficiencies, positioning us to deliver on the long-term growth within cash flow we demonstrated in our five-year outlook,” CEO Jeff Ventura said.

“At the same time, Range is intently focused on actions to fast-forward the de-levering process as swiftly and prudently as possible through asset sales. We have various processes underway and believe we can execute one or more successful sales in the current year, which would improve our balance sheet and corporate returns,” Ventura said.

First quarter 2018 drilling expenditures of $227 million funded the drilling and completion of 29 (27.5 net) wells. Range said that a 100% success rate was achieved.  In addition, during the quarter, $19.7 million was incurred on acreage purchases, $8.6 million on gas gathering systems and $0.5 million on seismic expense.

Range is on target with its $941 million capital budget for 2018.


Range’s net production for first quarter 2018 averaged 2.188 Bcfe/d, consisting of 1.5 Bcf/d of natural gas, 103,000 barrels per day of NGLs and 11,816 barrels per day of condensate and oil.

According to Range Resources, this makes the company one of the top 10 natural gas producers in the U.S. and a top three NGL producer amongst E&P companies.


Wells TIL
1Q 2018
  Wells TIL
2Q-4Q 2018
Wells TIL
Average Lateral
SW PA Super-Rich   2   13   15   11,550 ft.
SW PA Wet   7   35   42   9,550 ft.
SW PA Dry     43   43   9,830 ft.
Total Appalachia   9   91   100    
Total N. LA.   4   7   11   7,500 ft.
Total   13   98   111    


  • Production for first quarter 2018 averaged approximately 1,809 net MMcfe/d from the Appalachia division, a 20% increase over the prior year
    • The southwest area of the division averaged 1,678 net MMcfe/d during the quarter, a 25% increase over first quarter 2017
    • The northeast Marcellus properties averaged 116 net MMcf/d during the first quarter, a 20% decrease from the prior-year quarter
  • Production for the North Louisiana division in first quarter of 2018 averaged approximately 366 net MMcfe/d, 8% less than first quarter 2017

Midstream – takeaway comes online

In early January, Leach and Rayne Express pipeline capacity went into service, allowing for more of Range’s production to be transported out of basin to higher priced markets. Energy Transfer’s Rover project (phase 2) is expected to reach full completion in second quarter 2018, and is the last major natural gas transportation project for which Range has contracted capacity.

2018 guidance, hedging

Production for the second quarter of 2018 is expected to be approximately 2.19 Bcfe/d, and production for the full year of 2018 is expected to average approximately 2.2 Bcfe/d – this equates to a year-over-year growth rate of approximately 11%.

Range currently has over 70% of its expected 2018 natural gas production hedged at a weighted average floor price of $3.08 per MMBTU. Similarly, Range has hedged over 70% of its 2018 projected crude oil production at a floor price of $53.30 and approximately 50% of its composite NGL production.

Range said it has also hedged Marcellus and other basis differentials to limit volatility between NYMEX and regional prices. The fair value of the basis hedges was a gain of $2.2 million as of March 31, 2018. The company also has propane basis swap contracts, which lock in the differential between Mont Belvieu and international propane indices – the fair value of these contracts was a loss of $1.4 million on March 31, 2018.

Conference call Q&A excerpts

Q: Can you give a bit more color on the asset sale process? And how you weigh the need to de-lever versus the free cash flow given up from assets being sold or are – is there a middle ground of de-levering the assets that don’t actually generate much free cash flow?

CFO Mark S. Scucchi: To your point, the sale price is, of course, a consideration as we look at monetizing assets and what the resulting impact on leverage would be. The good news is that Range has a deep inventory of projects and we have multiple asset sales initiatives underway.

Some have significant future potential, some are farther out the drilling schedules, so there is no current impact on cash flow. Some have modest impacts to cash flow because, looking backwards, they might have had wider basis differentials and not – and have contributed significantly or in any material respect to our corporate cash flows.

So, that is kind of a valuation question specific to each asset. But the punch line, I think, that we’re trying to convey is we have multiple asset sales underway, interested parties, and dialogues going on, on multiple fronts and monetizing those assets.

In some respects, you’re pulling inventory that may be much further out our drilling schedule, may not be currently reflected in our stock price, in our opinion. And on an NPV basis, it may be so far out the drilling schedule that we have the opportunity potentially pull that forward by monetizing it today to reduce debt and still maintain many, many years of the high-quality inventory and all without harming or altering the trajectory of the company laid out in the five-year outlook.

Q: Dennis, as you take over and are now leading the operation group as a whole, I was wondering if you can comment on your leadership style and any new ideas that you think that you could bring to the table?

SVP of Operations Dennis L. Degner: Yeah, I’m happy to answer that. Over the past, now almost eight years with Range, one of the things with my time in Appalachia and now moving to this new role is I’m kind of an ‘incrementer’ at heart. And I really enjoyed the ability for us to take what we have is repeatable and successful and continue to build upon that year-after-year and month-after-month, and when watching the teams be successful.

I think that’s coming out in notes like today, when we talked about our long lateral links or efficiencies that we capture on a completion side or LOE levels that we’ve been able to achieve over the last few years.

As we look at the five-year outlook, I think the next chapter is, now how do we look at what are our next phase of efficiencies and really being capital-efficient looks like in line with that five-year outlook. So from a leadership perspective, I’m really looking forward to working with the team to try and capitalize on that.

Legal Notice