Range Resources (RRC) Update - Feb 11
Posted: Mon Feb 11, 2019 12:32 pm
RRC is one of the four "gassers" in our Sweet 16. More than 50% of their 2019 gas production is hedged at $2.83/MMBtu and they sell a lot of NGLs. My valuation of $21.00 is supported by the outstanding year-end reserve report below. - Dan
FORT WORTH, Texas, Feb. 11, 2019 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION (RRC) announced today that proved reserves at December 31, 2018 increased by 18% from the prior-year to 18.1 Tcfe.
Highlights –
•Year-end 2018 PV10 value of reserves using future strip prices was $9.9 billion
•Year-end 2018 SEC PV10 value of proved reserves was $13.2 billion, up $5.1 billion from prior year
•Proved reserves increased by 2.8 Tcfe, or 18%
•Reserve extensions, discoveries and additions were 3.1 Tcfe
•Proved developed reserves increased 1.4 Tcfe, or 17%
•Drill-bit finding cost of $0.22 per mcfe, including performance revisions < This will lower their DD&A rate going forward; increasing reported earnings.
•Future development costs for proved undeveloped reserves estimated to be $0.40 per mcfe
•Unhedged recycle ratio over 2.5x based on future development costs of $0.40 per mcfe
Commenting on Range’s 2018 proved reserves, Jeff Ventura, Range’s CEO, said, “Range had another solid year of reserve additions, with drill-bit finding costs of only $0.22 per mcfe. The quality of reserves was highlighted by another consecutive year of positive performance revisions, which were a result of extending laterals and improvements from optimized targeting and completions. Future development costs for proven undeveloped locations are expected to be approximately $0.40 per mcfe, which is outstanding and underpins a strong unhedged recycle ratio of over 2.5x at current strip pricing. Range added a record 3.1 Tcfe to proved reserves from extensions, discoveries and additions, driven by our large inventory of low-risk, high-return projects in the Marcellus Shale.”
“Similar to previous years, Range’s strong reserve growth was accomplished while having less than one-third of our offset proven undeveloped locations currently recorded for each horizontal producing well. We believe this demonstrates our ability to grow SEC reserves in the future as capital is allocated to offset locations. Our economic resilience is further demonstrated in the year-end PV10 reserve value of $9.9 billion using futures strip pricing from year-end, which equates to approximately $24 per share, net of approximately $3.8 billion of debt at year end. Going forward, Range is committed to translating well-level returns from our high-quality asset base into corporate-level returns, including a free cash flow yield that is competitive not only within energy, but across the broader market.”
FORT WORTH, Texas, Feb. 11, 2019 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION (RRC) announced today that proved reserves at December 31, 2018 increased by 18% from the prior-year to 18.1 Tcfe.
Highlights –
•Year-end 2018 PV10 value of reserves using future strip prices was $9.9 billion
•Year-end 2018 SEC PV10 value of proved reserves was $13.2 billion, up $5.1 billion from prior year
•Proved reserves increased by 2.8 Tcfe, or 18%
•Reserve extensions, discoveries and additions were 3.1 Tcfe
•Proved developed reserves increased 1.4 Tcfe, or 17%
•Drill-bit finding cost of $0.22 per mcfe, including performance revisions < This will lower their DD&A rate going forward; increasing reported earnings.
•Future development costs for proved undeveloped reserves estimated to be $0.40 per mcfe
•Unhedged recycle ratio over 2.5x based on future development costs of $0.40 per mcfe
Commenting on Range’s 2018 proved reserves, Jeff Ventura, Range’s CEO, said, “Range had another solid year of reserve additions, with drill-bit finding costs of only $0.22 per mcfe. The quality of reserves was highlighted by another consecutive year of positive performance revisions, which were a result of extending laterals and improvements from optimized targeting and completions. Future development costs for proven undeveloped locations are expected to be approximately $0.40 per mcfe, which is outstanding and underpins a strong unhedged recycle ratio of over 2.5x at current strip pricing. Range added a record 3.1 Tcfe to proved reserves from extensions, discoveries and additions, driven by our large inventory of low-risk, high-return projects in the Marcellus Shale.”
“Similar to previous years, Range’s strong reserve growth was accomplished while having less than one-third of our offset proven undeveloped locations currently recorded for each horizontal producing well. We believe this demonstrates our ability to grow SEC reserves in the future as capital is allocated to offset locations. Our economic resilience is further demonstrated in the year-end PV10 reserve value of $9.9 billion using futures strip pricing from year-end, which equates to approximately $24 per share, net of approximately $3.8 billion of debt at year end. Going forward, Range is committed to translating well-level returns from our high-quality asset base into corporate-level returns, including a free cash flow yield that is competitive not only within energy, but across the broader market.”