Range Resources (RRC) -

[dan_s]

Zacks Equity Research rates RRC a STRONG BUY. So do I.

Read: https://finance.yahoo.com/news/range-re ... 01058.html

RRC is down 48% YTD, but the company is in much better shape today than it was at the beginning of the year. YOY production will be up ~30% in 2017, primarily because of their merger with MRD that closed 9-16-2016. Their drilling program is also responsible for about a third of the production growth.

If natural gas and NGL prices move higher in Q4, which is already happening, this stock should draw a lot of attention. RRC has ~75% of their natural gas production for 2H 2017 hedged at $3.22/Mcf. If gas prices rise into year-end and they can lock in gas prices over $3.00 for the full year 2018, the company should generated operating cash flow of more than $1.2 Billion. That is more than enough to fully fund their 2018 capex program that is expected to generate 20% annual production growth through at least 2020.

1 Bcfpd (~65% of their gas production) is already hedged for Q1 2018 at $3.43/Mcf.

RRC has been in the Sweet 16 for over ten years. I have an extremely high level of confidence in my forecast model for this company. I also have a lot of respect for the management team and their marketing group which always gets the best prices for their production. Plus, the merger with MRD gives them access to even better markets.