Range Resources (RRC) Q3 Results - Oct 23

[dan_s]

Range Announces Third Quarter 2018 Financial Results (my comments in blue - Dan)

FORT WORTH, Texas, Oct. 23, 2018 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its third quarter 2018 financial results.


Highlights –
•Net income of $48.5 million ($0.19 per diluted share), non-GAAP net income of $63.9 million ($0.26 per diluted share) < Non-GAAP net income compares to my forecast of $38.8 million ($0.16 per share).
•Cash provided from operating activities of $229 million, non-GAAP cash flow of $260 million < Compares to my forecast of $228.4 million operating cash flow.
•Production averaged a record 2,267 Mmcfe per day, an increase of 14% compared to third quarter 2017 < Compares to my forecast of 2,221.5 Mmcfe per day.
•Southwest Pennsylvania production increased 29% over the prior-year period to 1,872 Mmcfe per day
•Liquids production averaged a record 122,783 barrels per day, an 11% increase over the prior-year period, and contributed 47% of total product revenues before hedging < Compares to my forecast of 119,250 barrels per day.
•Pre-hedge NGL realizations were $27.16 per barrel, a 60% increase over the prior-year third quarter
•Natural gas differentials, including basis hedging, of $0.15 below NYMEX, a $0.36 improvement over the prior-year third quarter
•Pre-hedge crude oil and condensate realizations of $64.57, a 49% increase over the prior-year quarter
•Signed and closed the sale of a proportionately reduced 1% overriding royalty in Range’s Washington County, Pennsylvania leases for gross proceeds of $300 million

Commenting, Jeff Ventura, the Company’s CEO said, “Range continues to successfully execute on the plan outlined in the beginning of this year, delivering another quarter of record production and increasing cash flow by 27% compared to the prior-year third quarter. Following the recently-announced royalty sale, coupled with our exposure to improved liquids pricing, Range now expects leverage to be under 3.0x debt to EBITDAX at the end of this year, accelerating the de-levering process outlined in our five-year outlook by two years. Range continues to pursue additional accretive asset sales that will reduce leverage closer to our longer-term target of under 2.0x. At the same time, Range, as a leading NGL producer in Appalachia, is uniquely positioned to continue to benefit from improved domestic and international markets for NGL purity products.”

Higher liquids prices are the primary reason RRC beat my forecast. - Dan

[dan_s]

Revenues, net of cash settlements on hedges, were $701.9 million. This compares to First Call's estimated revenues of $685.0 million.

Range’s net production for third quarter 2018 averaged 2,267 Mmcfe per day, consisting of 1,530 Mmcf per day of natural gas, 111,469 barrels per day of NGLs and 11,314 barrels per day of condensate and oil. This makes Range one of the top 10 natural gas producers in the U.S. and a top three NGL producer amongst E&P companies.

Q3 results are outstanding: RRC is now up 4.7% in after-hours trading. My valuation in the newsletter is $28.00 and my valuation will be going up.