RANGE RESOURCES CORPORATION (NYSE:RRC) today
announced its second quarter financial results.
Highlights –
- Announced pending merger with Memorial Resource Development
Corp.
- Second quarter company production averaged 1,421 net Mmcfe per
day, up 4% from the prior-year quarter, with Marcellus production
averaging a record 1,379 net Mmcfe per day, up 16% from the
prior-year quarter
- Unit costs reduced by 8%, or $0.24 per mcfe, compared to
prior-year quarter
- Total debt at lowest level since May 2012
- Completed the sale of central Oklahoma properties for $77.7
million
Commenting, Jeff Ventura, the Company’s CEO
said, “Range continues to perform at a high level operationally.
Our Marcellus assets continue to deliver excellent results,
as drilling and completion activities become more efficient, and
recoveries are increasing as we drill longer laterals. We are
encouraged by the recent improvement in commodity prices,
particularly natural gas and natural gas liquids. Range is
well positioned to take advantage of an improving price environment
with an industry-leading inventory of high-quality drilling
opportunities, a diversified portfolio of transportation
alternatives for our products, and an existing footprint of over
200 well pads in Appalachia. The existing pad inventory will
allow Range to reduce costs and increase efficiencies for future
development and, importantly, speed the pace of development when
warranted, as much of the required infrastructure is already in
place.
The proposed merger with Memorial is on track,
with closing estimated to occur late in the third quarter. We
look forward to integrating the Range and Memorial teams, combining
two of the most prolific, high-quality natural gas plays in North
America.”
Financial Discussion
Except for generally accepted accounting
principles (“GAAP”) reported amounts, specific expense categories
exclude non-cash impairments, unrealized mark-to-market gain or
loss on derivatives, non-cash stock compensation and other items
shown separately on the attached tables. “Unit costs” as used
in this release are composed of direct operating, transportation,
gathering and compression, production and ad valorem taxes, general
and administrative, interest and depletion, depreciation and
amortization costs divided by production. See “Non-GAAP
Financial Measures” for a definition of each of the non-GAAP
financial measures and the tables that reconcile each of the
non-GAAP measures to their most directly comparable GAAP financial
measure.
Asset Sales
On May 20, 2016, Range closed on the sale of
approximately 9,200 net acres with net production of 5 Mmcfe per
day from 200 wells located in central Oklahoma for $77.7
million. Following the closing of this sale, the Company owns
approximately 19,000 net acres in central Oklahoma. The
retained acreage, which is primarily held by production, is in the
northern extension of the STACK play and includes Osage and other
reservoir targets. Drilling activity has increased near the
area and the Company is monitoring industry activity.
Second Quarter 2016
GAAP revenues for the second quarter 2016
totaled $102 million (a 58% decrease compared to second quarter
2015). GAAP net cash provided from operating activities
including changes in working capital was $82 million (a 48%
decrease as compared to second quarter 2015) and GAAP earnings were
a loss of $225 million ($1.35 loss per diluted share) versus a loss
of $119 million ($0.71 per diluted share) in the prior-year
quarter. Second quarter 2016 included a $163 million
derivative loss due to increased commodity prices, compared to a
$35 million loss in 2015 and deferred compensation plan expense of
$26 million, due to the increase in Range’s stock price during the
quarter, compared to a $7 million gain in the prior-year
quarter.
Non-GAAP revenues for second quarter 2016
totaled $363 million (a 10% decrease compared to second quarter
2015), cash flow from operations before changes in working capital,
a non-GAAP measure, was $93 million compared to $161 million in
second quarter 2015. Adjusted net income comparable to
analysts’ estimates, a non-GAAP measure, was a loss of $23 million
($0.14 loss per diluted share) for the second quarter 2016 compared
to earnings of $2.2 million ($0.01 per diluted share) in the
prior-year quarter. The Company’s total unit costs decreased
by $0.24 per mcfe, or 8%, compared to the prior-year quarter, as
shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
2Q 2016 (per
mcfe) |
|
|
2Q 2015 (per
mcfe) |
|
|
Increase
(Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating |
|
$ |
0.15 |
|
|
$ |
0.27 |
|
|
$ |
|
(44 |
%) |
|
Transportation,
gathering compression |
|
|
1.06 |
|
|
|
0.76 |
|
|
|
|
39 |
% |
|
Production and ad
valorem taxes |
|
|
0.05 |
|
|
|
0.07 |
|
|
|
|
(29 |
%) |
|
General and
administrative |
|
|
0.23 |
|
|
|
0.30 |
|
|
|
|
(23 |
%) |
|
Interest expense |
|
|
0.29 |
|
|
|
0.35 |
|
|
|
|
(17 |
%) |
|
Total
cash unit costs (a) |
|
|
1.79 |
|
|
|
1.75 |
|
|
|
|
2 |
% |
|
Depletion, depreciation
amortization |
|
|
0.95 |
|
|
|
1.22 |
|
|
|
|
(22 |
%) |
|
Total
unit costs (a) |
|
$ |
2.73 |
|
|
$ |
2.97 |
|
|
$ |
|
(8 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Totals may not add due to rounding.
Second quarter 2016 natural gas, NGLs and oil
price realizations (including the impact of cash-settled hedges and
derivative settlements which correspond to analysts’ estimates)
averaged $2.50 per mcfe, a 19% decrease from the prior-year
quarter. Additional detail on commodity price realizations
can be found in the Supplemental Tables provided on the Company’s
website.
- Production and realized prices, including hedging settlements,
by each commodity for second quarter 2016 were: natural gas –
912 Mmcf per day ($2.52 per mcf), NGLs – 75,450 barrels per day
($11.57 per barrel) and crude oil and condensate – 9,336 barrels
per day ($40.48 per barrel). Total second quarter production
was 1,421 Mmcfe per day ($2.50 per mcfe).
- The second quarter average natural gas price, before hedging
settlements, was $1.50 per mcf as compared to $1.96 per mcf in the
prior-year quarter. NYMEX natural gas financial hedges
increased realizations $1.05 per mcf in the second quarter
2016. The average Company natural gas price differential
including the impact of basis hedges for the second quarter
improved to ($0.48) per mcf compared to ($0.66) per mcf in the
prior-year quarter, as a result of increased capacity to better
markets.
- Total NGL pricing per barrel including ethane and processing
expenses before hedging settlements improved to 24% of WTI ($10.70
per barrel) compared to 14% of WTI ($8.02 per barrel) in the
prior-year quarter as a result of increased NGL capacity to better
markets, mainly due to Mariner East. Hedging increased NGL
prices by $0.88 per barrel in the second quarter.
- Crude oil and condensate price realizations, before realized
hedges, for the second quarter averaged $31.74 per barrel, or
$13.58 below WTI, compared to $16.17 below WTI in the prior-year
quarter. Hedging added $8.74 per barrel in the second
quarter.
Capital Expenditures
Second quarter 2016 drilling expenditures of
$120 million funded the drilling of 28 (26 net) wells. A 100%
success rate was achieved. In addition, during the quarter,
$3.5 million was incurred on acreage purchases, $6.4 million on
exploration expense, and $0.2 million on gas gathering
systems. Range is on target with its $495 million capital
budget for 2016. The Company expects to average three rigs
running for the second half of 2016.
Operational Discussion
Range has updated its investor presentation with
second quarter financial and operational results. Please see
www.rangeresources.com under the Investors tab, “Company
Presentations” area, for the presentation entitled, “Company
Presentation – July 26, 2016.”
Marcellus Shale
Production for the second quarter averaged 1,379
net Mmcfe per day, a 16% increase over the prior-year
quarter. The Southern Marcellus Shale Division averaged 1,192
net Mmcfe per day during the quarter, a 24% increase over the
prior-year quarter. The Northern Marcellus Shale Division
averaged 188 net Mmcf per day during the quarter, a 19% decrease
over the prior-year quarter.
The table below summarizes second quarter
activity and the number of wells expected to be turned to sales for
the remainder of 2016:
|
|
|
|
|
|
|
Area |
|
Wells to sales First half
2016 |
|
Remaining 2016 Wells to
sales |
|
Planned Total Wells to sales in
2016 |
Super-Rich |
|
10 |
|
3 |
|
13 |
Wet |
|
16 |
|
15 |
|
31 |
Dry - SW |
|
32 |
|
17 |
|
49 |
Dry - NE |
|
12 |
|
7 |
|
19 |
Total
Marcellus/Utica |
|
70 |
|
42 |
|
112 |
|
|
|
|
|
|
|
The Southern Marcellus Shale Division continues
to drill and complete outstanding wells, with impressive EUR’s on
both a total and normalized basis, with costs being driven
lower. The examples below represent recent wells brought on
line that continue to perform well.
- In the southwest dry area, a five well pad brought on line in
April is expected to have an EUR of approximately 22 Bcf per well,
or over 3 Bcf per 1,000 lateral feet, at a cost of approximately
$5.3 million.
- In the wet area, a four well pad brought on line at the end of
last year is now expected to have an EUR of approximately 28 Bcfe
per well, or 4 Bcfe per 1,000 lateral feet. A well in this
area is expected to cost approximately $5.8 million.
- In the super rich area, 2 pads with a total of 10 wells brought
on line in the first quarter are expected to have an EUR of
approximately 14 Bcfe per well, or 2.8 Bcfe per 1,000 feet, with a
cost of approximately $4.8 million.
Operational efficiency gains continued in the
second quarter. The division completed 1,067 stages,
averaging over 7.8 stages per day per crew, which is a 23%
improvement compared to the prior-year quarter. Also, Range
drilled 6% more lateral feet per day per rig, with a 27% reduction
in drilling cost per lateral foot, when compared to the prior-year
quarter. Capital costs for surface facilities and equipment
in 2016 are expected to be 23% lower than 2015 as a result of
design improvements, reduced labor and equipment costs, plus
redeployment of existing equipment. Logistical improvements
in water handling have resulted in annual savings of over $18
million. These and other efficiencies have driven Range’s
normalized (per 1,000 feet of lateral) well costs, including
surface facility costs, to among the lowest of other Marcellus
peers, as shown in the latest Company presentation.
Range’s current inventory of lightly drilled
well pads now stands at over 200 pads with infrastructure in place
that will significantly shorten cycle time. In addition,
Range has now obtained permits for drilling 42 of the potential
laterals on several of these pads.
With surface facilities construction complete,
Range has recently brought on line its third dry gas Utica well in
southwest Pennsylvania and is currently conducting flow
tests. Early data continues to indicate this well is more
productive compared to the Company’s first two Utica wells, and was
drilled and completed with lower cost. While results from the
Company’s dry Utica wells are encouraging, Range will continue to
monitor results from its three wells, plus wells from other
operators in the area, while focusing capital on its prolific
Marcellus acreage position that has been de-risked by thousands of
wells, some with up to 10 years of production history. Range
has approximately 400,000 acres in southwest Pennsylvania which it
considers prospective for Utica development.
Marcellus Shale Marketing and
Transportation
Range continues to add capacity to markets
outside of Appalachia. The Company will add 150,000 mcf per day of
firm capacity on the Spectra Gulf Markets project, expected to be
in-service during the fourth quarter of this year, and an
additional 300,000 mcf per day on the Columbia Leach/Rayne Express
project, expected to be in-service by the end of 2017. Both of
these projects take Range gas to the Gulf Coast, where demand is
increasing, resulting in an expected improvement in natural gas
price realizations. With Mariner East now fully operational,
Range is marketing propane globally out of Marcus Hook and
realizing prices above Mont Belvieu. In addition, Range
recently signed new condensate sales agreements which will improve
condensate prices in the second half of 2016. With these
marketing arrangements in place, we anticipate improved realized
prices for all products.
Guidance
Production per day Guidance
Production for the entire 2016 year remains at
the high-end of previous guidance to average 1,410 to 1,420 Mmcfe
per day after all announced asset sales. Production for the
third quarter of 2016 is expected to be approximately 1,430 Mmcfe
per day with 32% to 35% liquids.
Third Quarter 2016 Expense Guidance
|
|
|
|
Direct operating
expense: |
|
$0.18 - $0.19 per
mcfe |
|
Transportation, gathering
and compression expense: |
|
$1.05 - $1.06 per
mcfe |
|
Production tax
expense: |
|
$0.05 - $0.06 per
mcfe |
|
Exploration expense: |
|
$ 5.0 - $7.0
million |
|
Unproved property
impairment expense: |
|
$ 8.0 - $10.0
million |
|
G&A expense: |
|
$0.22 $0.24 per
mcfe |
|
Interest expense: |
|
$0.29 - $0.30 per
mcfe |
|
DD&A expense: |
|
$0.95 - $0.96 per
mcfe |
|
Net Brokered Gas Marketing
Expense: |
|
~$3.0 million |
|
|
|
|
|
2016 Annual Differential Guidance
Based on current market pricing indications, Range would expect
to average the following pre-hedge differentials for its 2016
production.
|
|
|
Natural Gas: |
|
NYMEX minus $0.40 -
$0.45 |
|
|
|
Natural Gas Liquids
(including ethane): |
|
23% - 25% of
WTI |
|
|
|
Oil/Condensate: |
|
WTI minus $12 |
|
|
|
Hedging Status
Range hedges portions of its expected future
production volumes to increase the predictability of cash
flow. Range currently has over 80% of its expected third and
fourth quarter 2016 natural gas production hedged at a weighted
average floor price of $3.22 per mcf. Range has over 30% of
its expected 2017 gas production hedged at an average floor price
of $2.94. Similarly, Range has hedged approximately 70% of
its third and fourth quarter 2016 projected crude oil production at
a floor price of $58.40 and approximately 60% of its composite NGL
production. Please see Range’s detailed hedging schedule
posted at the end of the financial tables below and on its website
at www.rangeresources.com.
Range has hedged Marcellus and other basis
differentials covering 64,125,000 Mmbtu per day for July 2016
through December 2017. The fair value of the basis hedges
based upon future strip prices as of June 30, 2016 was a loss of
$3.8 million.
Range has also hedged the premium spread between
the Mont Belvieu propane index and the respective
European and Asian propane market indexes on approximately 30% of
anticipated LPG sales through December 2017. The fair value
of these hedges based upon future strip prices as of June 30, 2016
was a gain of $4.0 million.
Conference Call and Webcast Information
A conference call to review the financial
results is scheduled on Wednesday, July 27 at 9:00 a.m. ET. To
participate in the call, please dial 877-407-0778 and ask for the
Range Resources second quarter 2016 financial results conference
call. A replay of the call will be available through August 27. To
access the phone replay dial 877-660-6853. The conference ID is
13639393. A simultaneous webcast of the call may be accessed
at www.rangeresources.com. The webcast will be archived for replay
on the Company's website until August 27.
Non-GAAP Financial Measures
Adjusted net income or loss comparable to
analysts’ estimates as set forth in this release represents income
or loss before income taxes adjusted for certain non-cash items
(detailed in the accompanying table) less income taxes. We
believe adjusted net income comparable to analysts’ estimates is
calculated on the same basis as analysts’ estimates and that many
investors use this published research in making investment
decisions and evaluating operational trends of the Company and its
performance relative to other oil and gas producing
companies. Diluted earnings per share (adjusted) as set forth
in this release represents adjusted net income comparable to
analysts’ estimates on a diluted per share basis. A table is
included which reconciles income or loss to adjusted net income
(loss) comparable to analysts’ estimates and diluted earnings per
share (adjusted). On its website, the Company provides
additional comparative information on prior periods along with
non-GAAP revenue disclosures.
Cash flow from operations before changes in
working capital (sometimes referred to as “adjusted cash flow”) as
defined in this release represents net cash provided from operating
activities before changes in working capital and exploration
expense adjusted for certain non-cash compensation items.
Cash flow from operations before changes in working capital is
widely accepted by the investment community as a financial
indicator of an oil and gas company’s ability to generate cash to
internally fund exploration and development activities and to
service debt. Cash flow from operations before changes in
working capital is also useful because it is widely used by
professional research analysts in valuing, comparing, rating and
providing investment recommendations of companies in the oil and
gas exploration and production industry. In turn, many
investors use this published research in making investment
decisions. Cash flow from operations before changes in
working capital is not a measure of financial performance under
GAAP and should not be considered as an alternative to cash flows
from operating activities, investing, or financing activities as an
indicator of cash flows, or as a measure of liquidity. A
table is included which reconciles Net cash from operating
activities to Cash flow from operations before changes in working
capital as used in this release. On its website, the Company
provides additional comparative information on prior periods for
cash flow, cash margins and non-GAAP earnings as used in this
release.
The cash prices realized for oil and natural gas
production including the amounts realized on cash-settled
derivatives and net of transportation, gathering and compression
expense is a critical component in the Company’s performance
tracked by investors and professional research analysts in valuing,
comparing, rating and providing investment recommendations and
forecasts of companies in the oil and gas exploration and
production industry. In turn, many investors use this
published research in making investment decisions. Due to the
GAAP disclosures of various derivative transactions and third-party
transportation, gathering and compression expense, such information
is now reported in various lines of the statement of
operations. The Company believes that it is important to
furnish a table reflecting the details of the various components of
each statement of operations line to better inform the reader of
the details of each amount and provide a summary of the realized
cash-settled amounts and third-party transportation, gathering and
compression expense which historically were reported as natural
gas, NGLs and oil sales. This information is intended to
bridge the gap between various readers’ understanding and fully
disclose the information needed.
The Company discloses in this release the
detailed components of many of the single-line items shown in the
GAAP financial statements included in the Company’s Quarterly
Report on Form 10-Q. The Company believes that it is
important to furnish this detail of the various components
comprising each line of the Statements of Operations to better
inform the reader of the details of each amount, the changes
between periods and the effect on its financial results.
RANGE RESOURCES CORPORATION
(NYSE:RRC) is a leading independent oil and natural gas producer
with operations focused in stacked-pay projects in the
Appalachian Basin. The Company is headquartered in Fort Worth,
Texas. More information about Range can be found at
www.rangeresources.com.
MEMORIAL RESOURCE DEVELOPMENT
CORP. (NASDAQ:MRD) is an independent natural gas and
oil company engaged in the acquisition, exploration and development
of natural gas and oil properties in North Louisiana. For more
information about MRD, please visit MRD’s website
at www.memorialrd.com.
Important Additional
Information
This communication does not constitute an offer
to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. This communication is being
made in respect of the proposed merger transaction involving Range
and MRD.
In connection with the proposed transaction,
Range has filed with the Securities and Exchange Commission (the
“SEC”) a registration statement on Form S-4 (333-211994) on
June 13, 2016, as amended by Amendment No. 1 thereto as
filed with the SEC on July 14, 2016, that includes a joint proxy
statement of Range and MRD and also constitutes a prospectus of
Range. Each of Range and MRD also plan to file other relevant
documents with the SEC regarding the proposed transactions. No
offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended. The definitive joint proxy
statement/prospectus(es) for Range and/or MRD will be mailed to
shareholders of Range and/or MRD, as applicable.
BEFORE MAKING ANY VOTING OR INVESTMENT
DECISIONS, INVESTORS AND SECURITY HOLDERS OF RANGE AND/OR MRD ARE
URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE
PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO
BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders may obtain free
copies of the joint proxy statement/prospectus, any amendments or
supplements thereto and other documents containing important
information about Range and MRD, once such documents are filed with
the SEC, through the website maintained by the SEC at www.sec.gov.
Copies of the documents filed with the SEC by Range will be
available free of charge on Range’s website at
http://www.rangeresources.com/ under the heading “Investors”
or by contacting Range’s Investor Relations Department by email at
lsando@rangeresources.com, damend@rangeresources.com,
mfreeman@rangeresources.com, or by phone at 817-869-4267.
Copies of the documents filed with the SEC by MRD will be
available free of charge on MRD’s website at
http://www.memorialrd.com under the heading “Investor
Relations” or by phone at 713-588-8339.
Participants in the
Solicitation
Range, MRD and certain of their respective
directors, executive officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies in connection with the proposed transaction. Information
about the directors and executive officers of MRD is set forth in
its proxy statement for its 2016 annual meeting of shareholders,
which was filed with the SEC on April 1, 2016. Information
about the directors and executive officers of Range is set forth in
its proxy statement for its 2016 annual meeting of stockholders,
which was filed with the SEC on April 8, 2016. These documents
can be obtained free of charge from the sources indicated
above.
Other information regarding the participants in
the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be
contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available. Investors should read the joint proxy
statement/prospectus carefully before making any voting or
investment decisions. Investors may obtain free copies of these
documents from Range or MRD using the sources indicated above.
Cautionary Statement Regarding
Forward-Looking Statements
This communication contains certain
“forward-looking statements” within the meaning of federal
securities laws, including within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
that are not limited to historical facts, but reflect Range’s and
MRD’s current beliefs, expectations or intentions regarding future
events. Words such as “may,” “will,” “could,” “should,” “expect,”
““plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,”
“predict,” “potential,” “pursue,” “target,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. The statements in this press release that are not
historical statements, including statements regarding the expected
timetable for completing the proposed transaction, benefits and
synergies of the proposed transaction, costs and other anticipated
financial impacts of the proposed transaction; the combined
company’s plans, objectives, future opportunities for the combined
company and products, future financial performance and operating
results and any other statements regarding Range’s and MRD’s future
expectations, beliefs, plans, objectives, financial conditions,
assumptions or future events or performance that are not historical
facts, are forward-looking statements within the meaning of the
federal securities laws. Furthermore, the statements relating
to the proposed transaction are subject to numerous risks and
uncertainties, many of which are beyond Range’s or MRD’s control,
which could cause actual results to differ materially from the
results expressed or implied by the statements. These risks and
uncertainties include, but are not limited to: failure to obtain
the required votes of Range’s or MRD’s shareholders; the timing to
consummate the proposed transaction; satisfaction of the conditions
to closing of the proposed transaction may not be satisfied or that
the closing of the proposed transaction otherwise does not occur;
the risk that a regulatory approval that may be required for the
proposed transaction is not obtained or is obtained subject to
conditions that are not anticipated; the diversion of management
time on transaction-related issues; the ultimate timing, outcome
and results of integrating the operations of Range and MRD; the
effects of the business combination of Range and MRD, including the
combined company’s future financial condition, results of
operations, strategy and plans; potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the proposed transaction; expected synergies and
other benefits from the proposed transaction and the ability of
Range to realize such synergies and other benefits; expectations
regarding regulatory approval of the transaction; results of
litigation, settlements and investigations; and actions by third
parties, including governmental agencies; changes in the demand for
or price of oil and/or natural gas can be significantly impacted by
weakness in the worldwide economy; consequences of audits and
investigations by government agencies and legislative bodies and
related publicity and potential adverse proceedings by such
agencies; compliance with environmental laws; changes in government
regulations and regulatory requirements, particularly those related
to oil and natural gas exploration; compliance with laws related to
income taxes and assumptions regarding the generation of future
taxable income; weather-related issues; changes in capital spending
by customers; delays or failures by customers to make payments owed
to us; impairment of oil and natural gas properties; structural
changes in the oil and natural gas industry; and maintaining a
highly skilled workforce. Range’s and MRD’s respective reports on
Form 10-K for the year ended December 31, 2015, Form 10-Q for the
quarter ended March 31, 2016 and June 30, 2016, recent Current
Reports on Form 8-K, and other SEC filings, including the
registration statement on Form S-4, as amended, that includes a
joint proxy statement of Range and MRD and constitutes a prospectus
of Range, discuss some of the important risk factors identified
that may affect these factors and Range’s and MRD’s respective
business, results of operations and financial condition. Range and
MRD undertake no obligation to revise or update publicly any
forward-looking statements for any reason. Readers are cautioned
not to place undue reliance on these forward-looking statements
that speak only as of the date hereof.
|
RANGE RESOURCES CORPORATION |
|
STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on GAAP reported
earnings with additional |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
details of items
included in each line in Form 10-Q |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and other
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas,
NGLs and oil sales (a) |
$ |
224,606 |
|
|
$ |
258,053 |
|
|
|
|
|
|
$ |
434,093 |
|
|
$ |
583,536 |
|
|
|
|
|
Derivative
fair value (loss)/income |
|
(162,798 |
) |
|
|
(34,791 |
) |
|
|
|
|
|
|
(75,890 |
) |
|
|
88,048 |
|
|
|
|
|
Brokered
natural gas, marketing and other (b) |
|
39,473 |
|
|
|
21,248 |
|
|
|
|
|
|
|
74,331 |
|
|
|
35,681 |
|
|
|
|
|
ARO
settlement (loss) gain (b) |
|
(6 |
) |
|
|
30 |
|
|
|
|
|
|
|
(8 |
) |
|
|
28 |
|
|
|
|
|
Other
(b) |
|
522 |
|
|
|
61 |
|
|
|
|
|
|
|
684 |
|
|
|
115 |
|
|
|
|
|
Total
revenues and other income |
|
101,797 |
|
|
|
244,601 |
|
|
|
-58 |
% |
|
|
433,210 |
|
|
|
707,408 |
|
|
|
-39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating |
|
19,975 |
|
|
|
34,126 |
|
|
|
|
|
|
|
43,441 |
|
|
|
70,377 |
|
|
|
|
|
Direct
operating – non-cash stock-based compensation (c) |
|
696 |
|
|
|
654 |
|
|
|
|
|
|
|
1,284 |
|
|
|
1,540 |
|
|
|
|
|
Transportation, gathering and compression |
|
136,844 |
|
|
|
95,198 |
|
|
|
|
|
|
|
262,107 |
|
|
|
184,624 |
|
|
|
|
|
Production
and ad valorem taxes |
|
6,049 |
|
|
|
9,242 |
|
|
|
|
|
|
|
11,936 |
|
|
|
19,170 |
|
|
|
|
|
Brokered
natural gas and marketing |
|
40,547 |
|
|
|
26,412 |
|
|
|
|
|
|
|
76,589 |
|
|
|
47,468 |
|
|
|
|
|
Brokered
natural gas and marketing – non-cash stock-based
compensation (c) |
|
378 |
|
|
|
619 |
|
|
|
|
|
|
|
894 |
|
|
|
1,125 |
|
|
|
|
|
Exploration |
|
6,414 |
|
|
|
4,274 |
|
|
|
|
|
|
|
10,637 |
|
|
|
11,428 |
|
|
|
|
|
Exploration
– non-cash stock-based compensation (c) |
|
371 |
|
|
|
751 |
|
|
|
|
|
|
|
1,061 |
|
|
|
1,483 |
|
|
|
|
|
Abandonment
and impairment of unproved properties |
|
7,059 |
|
|
|
12,330 |
|
|
|
|
|
|
|
17,687 |
|
|
|
23,821 |
|
|
|
|
|
General and
administrative |
|
29,968 |
|
|
|
37,113 |
|
|
|
|
|
|
|
58,391 |
|
|
|
73,776 |
|
|
|
|
|
General and
administrative – non-cash stock-based compensation (c) |
|
15,443 |
|
|
|
15,953 |
|
|
|
|
|
|
|
26,556 |
|
|
|
27,033 |
|
|
|
|
|
General and
administrative – lawsuit settlements |
|
403 |
|
|
|
398 |
|
|
|
|
|
|
|
1,324 |
|
|
|
734 |
|
|
|
|
|
General and
administrative – bad debt expense |
|
250 |
|
|
|
-- |
|
|
|
|
|
|
|
450 |
|
|
|
250 |
|
|
|
|
|
General and
administrative – legal contingency |
|
-- |
|
|
|
2,500 |
|
|
|
|
|
|
|
-- |
|
|
|
2,500 |
|
|
|
|
|
Memorial
merger expenses |
|
2,621 |
|
|
|
-- |
|
|
|
|
|
|
|
2,621 |
|
|
|
-- |
|
|
|
|
|
Termination
costs |
|
5 |
|
|
|
(17 |
) |
|
|
|
|
|
|
167 |
|
|
|
4,646 |
|
|
|
|
|
Termination
costs – non-cash stock-based compensation (c) |
|
-- |
|
|
|
434 |
|
|
|
|
|
|
|
-- |
|
|
|
1,721 |
|
|
|
|
|
Deferred
compensation plan (d) |
|
25,746 |
|
|
|
(7,282 |
) |
|
|
|
|
|
|
41,802 |
|
|
|
(12,906 |
) |
|
|
|
|
Interest
expense |
|
37,758 |
|
|
|
43,479 |
|
|
|
|
|
|
|
75,497 |
|
|
|
82,686 |
|
|
|
|
|
Depletion,
depreciation and amortization |
|
122,390 |
|
|
|
151,895 |
|
|
|
|
|
|
|
242,951 |
|
|
|
299,185 |
|
|
|
|
|
Impairment
of proved properties and other assets |
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
43,040 |
|
|
|
-- |
|
|
|
|
|
Loss (gain)
on sale of assets |
|
3,304 |
|
|
|
(2,909 |
) |
|
|
|
|
|
|
4,947 |
|
|
|
(2,734 |
) |
|
|
|
|
Total costs
and expenses |
|
456,221 |
|
|
|
425,170 |
|
|
|
7 |
% |
|
|
923,382 |
|
|
|
837,927 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes |
|
(354,424 |
) |
|
|
(180,569 |
) |
|
|
-96 |
% |
|
|
(490,172 |
) |
|
|
(130,519 |
) |
|
|
-276 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
-- |
|
|
|
-- |
|
|
|
|
|
Deferred |
|
(129,488 |
) |
|
|
(61,975 |
) |
|
|
|
|
|
|
(173,526 |
) |
|
|
(39,609 |
) |
|
|
|
|
|
|
(129,488 |
) |
|
|
(61,975 |
) |
|
|
|
|
|
|
(173,526 |
) |
|
|
(39,609 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(224,936 |
) |
|
$ |
(118,594 |
) |
|
|
-90 |
% |
|
$ |
(316,646 |
) |
|
$ |
(90,910 |
) |
|
|
-248 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per
Common Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(1.35 |
) |
|
$ |
(0.71 |
) |
|
|
|
|
|
$ |
(1.90 |
) |
|
$ |
(0.55 |
) |
|
|
|
|
Diluted |
$ |
(1.35 |
) |
|
$ |
(0.71 |
) |
|
|
|
|
|
$ |
(1.90 |
) |
|
$ |
(0.55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding, as reported: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
167,126 |
|
|
|
166,421 |
|
|
|
|
|
|
|
166,964 |
|
|
|
166,230 |
|
|
|
|
|
Diluted |
|
167,126 |
|
|
|
166,421 |
|
|
|
|
|
|
|
166,964 |
|
|
|
166,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See separate natural gas, NGLs and oil sales information
table.(b) Included in Brokered natural gas, marketing and other
revenues in the 10-Q.(c) Costs associated with stock compensation
and restricted stock amortization, which have been reflected in the
categories associated with the direct personnel
costs, which are combined with the cash costs in the 10-Q.(d)
Reflects the change in market value of the vested Company stock
held in the deferred compensation plan.
RANGE RESOURCES CORPORATION |
|
|
|
BALANCE
SHEETS |
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
June
30, |
|
|
|
December
31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
(Unaudited) |
|
|
|
(Audited) |
|
Assets |
|
|
|
|
|
|
|
Current
assets |
$ |
102,462 |
|
|
$ |
157,530 |
|
Derivative
assets |
|
44,063 |
|
|
|
288,762 |
|
Natural gas
and oil properties, successful efforts method |
|
6,140,653 |
|
|
|
6,361,305 |
|
Transportation and field assets |
|
16,489 |
|
|
|
19,455 |
|
Other |
|
76,512 |
|
|
|
72,979 |
|
|
$ |
6,380,179 |
|
|
$ |
6,900,031 |
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
Current
liabilities |
$ |
303,893 |
|
|
$ |
335,513 |
|
Asset
retirement obligations |
|
15,071 |
|
|
|
15,071 |
|
Derivative
liabilities |
|
20,649 |
|
|
|
1,136 |
|
|
|
|
|
|
|
|
|
Bank
debt |
|
-- |
|
|
|
86,427 |
|
Senior
notes |
|
738,616 |
|
|
|
738,101 |
|
Senior
subordinated notes |
|
1,828,345 |
|
|
|
1,826,775 |
|
Total
debt |
|
2,566,961 |
|
|
|
2,651,303 |
|
|
|
|
|
|
|
|
|
Deferred tax
liability |
|
606,482 |
|
|
|
777,947 |
|
Derivative
liabilities |
|
19,243 |
|
|
|
21 |
|
Deferred
compensation liability |
|
127,090 |
|
|
|
104,792 |
|
Asset
retirement obligations and other liabilities |
|
255,863 |
|
|
|
254,590 |
|
|
|
|
|
|
|
|
|
Common stock
and retained earnings |
|
2,466,660 |
|
|
|
2,761,903 |
|
Common stock
held in treasury stock |
|
(1,733 |
) |
|
|
(2,245 |
) |
Total
stockholders’ equity |
|
2,464,927 |
|
|
|
2,759,658 |
|
|
$ |
6,380,179 |
|
|
$ |
6,900,031 |
|
RECONCILIATION OF TOTAL REVENUES AND OTHER INCOME TO TOTAL
REVENUE EXCLUDING CERTAIN ITEMS, a non-GAAP measure |
|
|
(Unaudited, in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues and other
income, as reported |
$ |
101,797 |
|
|
$ |
244,601 |
|
|
|
-58 |
% |
|
$ |
433,210 |
|
|
$ |
707,408 |
|
|
|
-39 |
% |
Adjustment for certain
special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total change
in fair value related to derivatives prior to settlement
(gain) loss |
|
260,876 |
|
|
|
160,017 |
|
|
|
|
|
|
|
283,434 |
|
|
|
134,668 |
|
|
|
|
|
ARO
settlement loss (gain) |
|
6 |
|
|
|
(30 |
) |
|
|
|
|
|
|
8 |
|
|
|
(28 |
) |
|
|
|
|
Total revenues, as adjusted, non-GAAP |
$ |
362,679 |
|
|
$ |
404,588 |
|
|
|
-10 |
% |
|
$ |
716,652 |
|
|
$ |
842,048 |
|
|
|
-15 |
% |
RANGE RESOURCES CORPORATION |
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(224,936 |
) |
|
$ |
(118,594 |
) |
|
$ |
(316,646 |
) |
|
$ |
(90,910 |
) |
Adjustments
to reconcile net cash provided from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
income tax benefit |
|
(129,488 |
) |
|
|
(61,975 |
) |
|
|
(173,526 |
) |
|
|
(39,609 |
) |
Depletion,
depreciation, amortization and impairment |
|
122,390 |
|
|
|
151,895 |
|
|
|
285,991 |
|
|
|
299,185 |
|
Exploration
dry hole costs |
|
-- |
|
|
|
3 |
|
|
|
-- |
|
|
|
106 |
|
Abandonment
and impairment of unproved properties |
|
7,059 |
|
|
|
12,330 |
|
|
|
17,687 |
|
|
|
23,821 |
|
Derivative
fair value loss (income) |
|
162,798 |
|
|
|
34,791 |
|
|
|
75,890 |
|
|
|
(88,048 |
) |
Cash
settlements on derivative financial instruments that do not qualify
for hedge accounting |
|
98,078 |
|
|
|
125,226 |
|
|
|
207,544 |
|
|
|
222,716 |
|
Allowance
for bad debts |
|
250 |
|
|
|
-- |
|
|
|
450 |
|
|
|
250 |
|
Amortization
of deferred issuance costs, loss on extinguishment of debt, and
other |
|
1,730 |
|
|
|
1,732 |
|
|
|
3,437 |
|
|
|
3,090 |
|
Deferred and
stock-based compensation |
|
42,590 |
|
|
|
10,574 |
|
|
|
71,718 |
|
|
|
19,792 |
|
Loss (gain)
on sale of assets and other |
|
3,304 |
|
|
|
(2,909 |
) |
|
|
4,947 |
|
|
|
(2,734 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
working capital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
23,203 |
|
|
|
19,260 |
|
|
|
41,955 |
|
|
|
73,695 |
|
Inventory
and other |
|
5,167 |
|
|
|
(2,677 |
) |
|
|
10,500 |
|
|
|
(3,749 |
) |
Accounts
payable |
|
(31,116 |
) |
|
|
(3,606 |
) |
|
|
(19,194 |
) |
|
|
3,492 |
|
Accrued
liabilities and other |
|
1,151 |
|
|
|
(6,546 |
) |
|
|
(41,149 |
) |
|
|
(50,955 |
) |
Net changes
in working capital |
|
(1,595 |
) |
|
|
6,431 |
|
|
|
(7,888 |
) |
|
|
22,483 |
|
Net cash
provided from operating activities |
$ |
82,180 |
|
|
$ |
159,504 |
|
|
$ |
169,604 |
|
|
$ |
370,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
NET CASH PROVIDED FROM OPERATINGACTIVITIES, AS
REPORTED, TO CASH FLOW FROM OPERATIONS BEFORE CHANGES IN WORKING
CAPITAL, a non-GAAP measure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Net cash provided from
operating activities, as reported |
$ |
82,180 |
|
|
$ |
159,504 |
|
|
$ |
169,604 |
|
|
$ |
370,142 |
|
Net changes
in working capital |
|
1,595 |
|
|
|
(6,431 |
) |
|
|
7,888 |
|
|
|
(22,483 |
) |
Exploration
expense |
|
6,414 |
|
|
|
4,271 |
|
|
|
10,637 |
|
|
|
11,322 |
|
Lawsuit
settlements |
|
403 |
|
|
|
398 |
|
|
|
1,324 |
|
|
|
734 |
|
Legal
contingency |
|
-- |
|
|
|
2,500 |
|
|
|
-- |
|
|
|
2,500 |
|
Memorial
merger expenses |
|
2,621 |
|
|
|
-- |
|
|
|
2,621 |
|
|
|
-- |
|
Termination
costs |
|
5 |
|
|
|
(17 |
) |
|
|
167 |
|
|
|
4,646 |
|
Non-cash
compensation adjustment |
|
126 |
|
|
|
693 |
|
|
|
42 |
|
|
|
590 |
|
Cash flow from operations before changes in
working capital – non-GAAP measure |
$ |
93,344 |
|
|
$ |
160,918 |
|
|
$ |
192,283 |
|
|
$ |
367,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED WEIGHTED
AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
169,907 |
|
|
|
169,199 |
|
|
|
169,745 |
|
|
|
169,030 |
|
Stock held by deferred
compensation plan |
|
(2,781 |
) |
|
|
(2,778 |
) |
|
|
(2,781 |
) |
|
|
(2,800 |
) |
Adjusted
basic |
|
167,126 |
|
|
|
166,421 |
|
|
|
166,964 |
|
|
|
166,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
169,907 |
|
|
|
169,199 |
|
|
|
169,745 |
|
|
|
169,030 |
|
Dilutive stock options
under treasury method |
|
(2,781 |
) |
|
|
(2,778 |
) |
|
|
(2,781 |
) |
|
|
(2,800 |
) |
Adjusted
dilutive |
|
167,126 |
|
|
|
166,421 |
|
|
|
166,964 |
|
|
|
166,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RANGE RESOURCES CORPORATION |
|
|
|
RECONCILIATION OF NATURAL GAS, NGLs AND OIL SALES AND
DERIVATIVE FAIR VALUE INCOME (LOSS) TO CALCULATED CASH REALIZED
NATURAL GAS, NGLs AND OIL PRICES WITH AND WITHOUT THIRD PARTY
TRANSPORTATION, GATHERING AND COMPRESSION FEES, a non-GAAP
measure |
|
(Unaudited, in
thousands, except per unit data) |
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
Natural gas, NGL and oil
sales components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
sales |
$ |
124,187 |
|
|
$ |
171,664 |
|
|
|
|
|
|
$ |
266,622 |
|
|
$ |
400,404 |
|
|
|
|
|
NGL
sales |
|
73,456 |
|
|
|
40,945 |
|
|
|
|
|
|
|
123,618 |
|
|
|
100,756 |
|
|
|
|
|
Oil
sales |
|
26,963 |
|
|
|
45,444 |
|
|
|
|
|
|
|
43,853 |
|
|
|
82,376 |
|
|
|
|
|
Total oil and gas sales, as reported |
$ |
224,606 |
|
|
$ |
258,053 |
|
|
|
-13 |
% |
|
$ |
434,093 |
|
|
$ |
583,536 |
|
|
|
-26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative fair value
(loss) income, as reported: |
$ |
(162,798 |
) |
|
$ |
(34,791 |
) |
|
|
|
|
|
$ |
(75,890 |
) |
|
$ |
88,048 |
|
|
|
|
|
Cash settlements on
derivative financial instruments – (gain) loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
gas |
|
(84,648 |
) |
|
|
(87,059 |
) |
|
|
|
|
|
|
(170,163 |
) |
|
|
(142,928 |
) |
|
|
|
|
NGLs |
|
(6,003 |
) |
|
|
(9,966 |
) |
|
|
|
|
|
|
(16,881 |
) |
|
|
(15,561 |
) |
|
|
|
|
Crude
Oil |
|
(7,427 |
) |
|
|
(28,201 |
) |
|
|
|
|
|
|
(20,500 |
) |
|
|
(64,227 |
) |
|
|
|
|
Total change in fair
value related to derivatives prior to settlement, a non-GAAP
measure |
$ |
(260,876 |
) |
|
$ |
(160,017 |
) |
|
|
|
|
|
$ |
(283,434 |
) |
|
$ |
(134,668 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation, gathering
and compression components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
gas |
$ |
96,298 |
|
|
$ |
83,331 |
|
|
|
|
|
|
$ |
188,890 |
|
|
$ |
159,858 |
|
|
|
|
|
NGLs |
|
40,546 |
|
|
|
11,867 |
|
|
|
|
|
|
|
73,217 |
|
|
|
24,766 |
|
|
|
|
|
Total transportation, gathering and compression,
as reported |
$ |
136,844 |
|
|
$ |
95,198 |
|
|
|
|
|
|
$ |
262,107 |
|
|
$ |
184,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas, NGL and oil
sales, including cash-settled derivatives: (c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
sales |
$ |
208,835 |
|
|
$ |
258,723 |
|
|
|
|
|
|
$ |
436,785 |
|
|
$ |
543,332 |
|
|
|
|
|
NGL
sales |
|
79,459 |
|
|
|
50,911 |
|
|
|
|
|
|
|
140,499 |
|
|
|
116,317 |
|
|
|
|
|
Oil
sales |
|
34,390 |
|
|
|
73,645 |
|
|
|
|
|
|
|
64,353 |
|
|
|
146,603 |
|
|
|
|
|
Total |
$ |
322,684 |
|
|
$ |
383,279 |
|
|
|
-16 |
% |
|
$ |
641,637 |
|
|
$ |
806,252 |
|
|
|
-20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production of oil and gas
during the periods (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(mcf) |
|
82,997,371 |
|
|
|
87,737,330 |
|
|
|
-5 |
% |
|
|
167,864,741 |
|
|
|
168,237,366 |
|
|
|
0 |
% |
NGL
(bbl) |
|
6,865,948 |
|
|
|
5,105,127 |
|
|
|
34 |
% |
|
|
12,840,682 |
|
|
|
10,464,403 |
|
|
|
23 |
% |
Oil
(bbl) |
|
849,538 |
|
|
|
1,089,417 |
|
|
|
-22 |
% |
|
|
1,693,879 |
|
|
|
2,228,377 |
|
|
|
-24 |
% |
Gas equivalent (mcfe)
(b) |
|
129,290,287 |
|
|
|
124,904,594 |
|
|
|
4 |
% |
|
|
255,072,107 |
|
|
|
244,394,046 |
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production of oil and gas
– average per day (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(mcf) |
|
912,059 |
|
|
|
964,146 |
|
|
|
-5 |
% |
|
|
922,334 |
|
|
|
929,488 |
|
|
|
-1 |
% |
NGL
(bbl) |
|
75,450 |
|
|
|
56,100 |
|
|
|
34 |
% |
|
|
70,553 |
|
|
|
57,814 |
|
|
|
22 |
% |
Oil
(bbl) |
|
9,336 |
|
|
|
11,972 |
|
|
|
-22 |
% |
|
|
9,307 |
|
|
|
12,311 |
|
|
|
-24 |
% |
Gas equivalent (mcfe)
(b) |
|
1,420,772 |
|
|
|
1,372,578 |
|
|
|
4 |
% |
|
|
1,401,495 |
|
|
|
1,350,243 |
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices, including
cash-settled hedges that qualify for hedge accounting before third
party transportation costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(mcf) |
$ |
1.50 |
|
|
$ |
1.96 |
|
|
|
-23 |
% |
|
$ |
1.59 |
|
|
$ |
2.38 |
|
|
|
-33 |
% |
NGL
(bbl) |
$ |
10.70 |
|
|
$ |
8.02 |
|
|
|
33 |
% |
|
$ |
9.63 |
|
|
$ |
9.63 |
|
|
|
0 |
% |
Oil
(bbl) |
$ |
31.74 |
|
|
$ |
41.71 |
|
|
|
-24 |
% |
|
$ |
25.89 |
|
|
$ |
36.97 |
|
|
|
-30 |
% |
Gas equivalent (mcfe)
(b) |
$ |
1.74 |
|
|
$ |
2.07 |
|
|
|
-16 |
% |
|
$ |
1.70 |
|
|
$ |
2.39 |
|
|
|
-29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices, including
cash-settled hedges and derivatives before third party
transportation costs: (c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(mcf) |
$ |
2.52 |
|
|
$ |
2.95 |
|
|
|
-15 |
% |
|
$ |
2.60 |
|
|
$ |
3.23 |
|
|
|
-20 |
% |
NGL
(bbl) |
$ |
11.57 |
|
|
$ |
9.97 |
|
|
|
16 |
% |
|
$ |
10.94 |
|
|
$ |
11.12 |
|
|
|
-2 |
% |
Oil
(bbl) |
$ |
40.48 |
|
|
$ |
67.60 |
|
|
|
-40 |
% |
|
$ |
37.99 |
|
|
$ |
65.79 |
|
|
|
-42 |
% |
Gas equivalent (mcfe)
(b) |
$ |
2.50 |
|
|
$ |
3.07 |
|
|
|
-19 |
% |
|
$ |
2.52 |
|
|
$ |
3.30 |
|
|
|
-24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices, including
cash-settled hedges and derivatives: (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(mcf) |
$ |
1.36 |
|
|
$ |
2.00 |
|
|
|
-32 |
% |
|
$ |
1.48 |
|
|
$ |
2.28 |
|
|
|
-35 |
% |
NGL
(bbl) |
$ |
5.67 |
|
|
$ |
7.65 |
|
|
|
-26 |
% |
|
$ |
5.24 |
|
|
$ |
8.75 |
|
|
|
-40 |
% |
Oil
(bbl) |
$ |
40.48 |
|
|
$ |
67.60 |
|
|
|
-40 |
% |
|
$ |
37.99 |
|
|
$ |
65.79 |
|
|
|
-42 |
% |
Gas equivalent (mcfe)
(b) |
$ |
1.44 |
|
|
$ |
2.31 |
|
|
|
-38 |
% |
|
$ |
1.49 |
|
|
$ |
2.54 |
|
|
|
-41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation, gathering
and compression expense per mcfe |
$ |
1.06 |
|
|
$ |
0.76 |
|
|
|
39 |
% |
|
$ |
1.03 |
|
|
$ |
0.76 |
|
|
|
36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents volumes sold regardless of when
produced.(b) Oil and NGLs are converted at the rate of one
barrel equals six mcfe based upon the approximate relative energy
content of oil to natural gas, which is not necessarily indicative
of the relationship of oil and natural gas prices.(c)
Excluding third party transportation, gathering and
compression costs.(d) Net of transportation, gathering and
compression costs.
|
|
|
|
RANGE RESOURCES CORPORATION |
|
|
|
RECONCILIATION OF INCOME BEFORE INCOME
TAXESAS REPORTED TO INCOME BEFORE INCOME TAXES
EXCLUDING CERTAIN ITEMS, a non-GAAP measure |
|
(Unaudited, in
thousands, except per share data) |
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes,
as reported |
$ |
(354,424 |
) |
|
$ |
(180,569 |
) |
|
|
-96 |
% |
|
$ |
(490,172 |
) |
|
$ |
(130,519 |
) |
|
|
276 |
% |
Adjustment for certain
special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (gain)
on sale of assets |
|
3,304 |
|
|
|
(2,909 |
) |
|
|
|
|
|
|
4,947 |
|
|
|
(2,734 |
) |
|
|
|
|
(Gain) loss
on ARO settlements |
|
6 |
|
|
|
(30 |
) |
|
|
|
|
|
|
8 |
|
|
|
(28 |
) |
|
|
|
|
Change in
fair value related to derivatives prior to settlement |
|
260,876 |
|
|
|
160,017 |
|
|
|
|
|
|
|
283,434 |
|
|
|
134,668 |
|
|
|
|
|
Abandonment
and impairment of unproved properties |
|
7,059 |
|
|
|
12,330 |
|
|
|
|
|
|
|
17,687 |
|
|
|
23,821 |
|
|
|
|
|
Impairment
of proved property |
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
43,040 |
|
|
|
-- |
|
|
|
|
|
Lawsuit
settlements |
|
403 |
|
|
|
398 |
|
|
|
|
|
|
|
1,324 |
|
|
|
734 |
|
|
|
|
|
Legal
contingency |
|
-- |
|
|
|
2,500 |
|
|
|
|
|
|
|
-- |
|
|
|
2,500 |
|
|
|
|
|
Memorial
merger expenses |
|
2,621 |
|
|
|
-- |
|
|
|
|
|
|
|
2,621 |
|
|
|
-- |
|
|
|
|
|
Termination
costs |
|
5 |
|
|
|
(17 |
) |
|
|
|
|
|
|
167 |
|
|
|
4,646 |
|
|
|
|
|
Termination
costs – non-cash stock-based compensation |
|
-- |
|
|
|
434 |
|
|
|
|
|
|
|
-- |
|
|
|
1,721 |
|
|
|
|
|
Brokered
natural gas and marketing – non-cash stock-based compensation |
|
378 |
|
|
|
619 |
|
|
|
|
|
|
|
894 |
|
|
|
1,125 |
|
|
|
|
|
Direct
operating – non-cash stock-based compensation |
|
696 |
|
|
|
654 |
|
|
|
|
|
|
|
1,284 |
|
|
|
1,540 |
|
|
|
|
|
Exploration
expenses – non-cash stock-based compensation |
|
371 |
|
|
|
751 |
|
|
|
|
|
|
|
1,061 |
|
|
|
1,483 |
|
|
|
|
|
General
& administrative – non-cash stock-based compensation |
|
15,443 |
|
|
|
15,953 |
|
|
|
|
|
|
|
26,556 |
|
|
|
27,033 |
|
|
|
|
|
Deferred
compensation plan – non-cash adjustment |
|
25,746 |
|
|
|
(7,282 |
) |
|
|
|
|
|
|
41,802 |
|
|
$ |
(12,906 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income before
income taxes, as adjusted |
|
(37,516 |
) |
|
|
2,849 |
|
|
|
NM |
|
|
|
(65,347 |
) |
|
|
53,084 |
|
|
|
-223 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense, as
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
-- |
|
|
|
-- |
|
|
|
|
|
Deferred
(a) |
|
(14,269 |
) |
|
|
611 |
|
|
|
|
|
|
|
(24,966 |
) |
|
|
19,910 |
|
|
|
|
|
Net (loss) income excluding certain items, a
non-GAAP measure |
$ |
(23,247 |
) |
|
$ |
2,238 |
|
|
|
NM |
|
|
$ |
(40,381 |
) |
|
$ |
33,174 |
|
|
|
-222 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP (loss) income per
common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.14 |
) |
|
$ |
0.01 |
|
|
|
NM |
|
|
$ |
(0.24 |
) |
|
$ |
0.20 |
|
|
|
-220 |
% |
Diluted |
$ |
(0.14 |
) |
|
$ |
0.01 |
|
|
|
NM |
|
|
$ |
(0.24 |
) |
|
$ |
0.20 |
|
|
|
-220 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted shares
outstanding, if dilutive |
|
167,126 |
|
|
|
166,617 |
|
|
|
|
|
|
|
166,964 |
|
|
|
166,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Deferred taxes are estimated to be approximately
38%.
NM = Not meaningful
|
|
|
|
RANGE RESOURCES CORPORATION |
|
|
|
HEDGING POSITION AS OF JULY 13, 2016 |
|
(Unaudited) – |
|
|
|
|
|
|
|
|
Daily Volume |
|
|
|
Hedge Price |
|
|
Gas |
|
|
|
|
|
|
|
|
|
|
3Q 2016 Swaps |
|
|
|
793,261 Mmbtu |
|
|
|
$ |
3.21 |
|
|
|
4Q 2016 Swaps |
|
|
|
800,000 Mmbtu |
|
|
|
$ |
3.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Swaps |
|
|
|
330,000 Mmbtu |
|
|
|
$ |
2.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 Swaps |
|
|
|
70,000
Mmbtu |
|
|
|
$ |
2.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
|
|
|
|
|
|
|
|
|
3Q 2016 Swaps |
|
|
|
6,000
bbls |
|
|
|
$ |
58.40 |
|
|
|
4Q 2016 Swaps |
|
|
|
6,000
bbls |
|
|
|
$ |
58.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Swaps |
|
|
|
2,496
bbls |
|
|
|
$ |
51.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C2
Ethane |
|
|
|
|
|
|
|
|
|
|
3Q 2016 Swaps |
|
|
|
1,533
bbls |
|
|
|
$0.22/gallon |
|
|
4Q 2016 Swaps |
|
|
|
1,533
bbls |
|
|
|
$0.22/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Swaps |
|
|
|
3,000
bbls |
|
|
|
$0.27/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
|
C3
Propane |
|
|
|
|
|
|
|
|
|
|
3Q 2016 Swaps |
|
|
|
5,500
bbls |
|
|
|
$0.60/gallon |
|
|
4Q 2016 Swaps |
|
|
|
5,500
bbls |
|
|
|
$0.60/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Swaps |
|
|
|
3,966
bbls |
|
|
|
$0.53/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
|
C4 Normal
Butane |
|
|
|
|
|
|
|
|
|
|
3Q 2016 Swaps |
|
|
|
4,750
bbls |
|
|
|
$0.66/gallon |
|
|
4Q 2016 Swaps |
|
|
|
4,750
bbls |
|
|
|
$0.66/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Swaps |
|
|
|
500 bbls |
|
|
|
$0.61/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
|
C5 Natural
Gasoline 3Q 2016 Swaps |
|
|
|
3,500
bbls |
|
|
|
$1.11/gallon |
|
|
4Q 2016 Swaps |
|
|
|
3,500
bbls |
|
|
|
$1.11/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Swaps |
|
|
|
1,750
bbls |
|
|
|
$0.97/gallon |
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: SEE WEBSITE FOR OTHER
SUPPLEMENTAL INFORMATION FOR THE PERIODS
Investor Contacts:
Laith Sando, Vice President – Investor Relations
817-869-4267
lsando@rangeresources.com
David Amend, Investor Relations Manager
817-869-4266
damend@rangeresources.com
Michael Freeman, Senior Financial Analyst
817-869-4264
mfreeman@rangeresources.com
Media Contact:
Matt Pitzarella, Director of Corporate Communications
724-873-3224
mpitzarella@rangeresources.com
www.rangeresources.com
Range Resources (NYSE:RRC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Range Resources (NYSE:RRC)
Historical Stock Chart
From Apr 2023 to Apr 2024