Range Resources (RRC)

[dan_s]

Of all the Sweet 16, RRC may be the safest bet. It is a true "gasser" that has a clear path to increase production at rate of 20% to 25% per year for AT LEAST the next five years. Their growth plan has nothing to do with the price of oil. In fact, lower rig rates are a big plus for this one.

Forecast production for 2015 (a 22.6% increase over 2014):
> 990,000 mcfpd with ~52% hedged at blended rate of $4.15/mcf
> 12,000 bbls of crude oil per day with ~80% hedged at $90.57/bbl
> 64,000 bbls of NGLs per day that should sell for ~$26/bbl

First Call's Price Target is $85.61, which is slightly above my valuation.

I believe natural gas price will be a lot higher heading into 2016. Significant increase in demand for LNG and industrial demand is coming in second half of 2015.