Energy Prospectus

Highlights –
•GAAP cash flow was $371 million, compared to $226 million in first quarter 2017, and non-GAAP cash flow was a record $323 million, compared to $258 million in first quarter 2017 < This compares to my forecast of $277.3 million cash flow from operations.
•GAAP net income was $49 million ($0.20 per diluted share) compared to $170 million ($0.69 per diluted share) in the prior-year quarter, with non-GAAP net income of $113 million ($0.46 per diluted share), compared to $61 million in the prior-year quarter, an increase of 85% < This compares to my Q1 EPS forecast of $0.27
•Natural gas, NGLs and oil price realizations including hedging averaged $3.58 per mcfe, a 12% increase from the same quarter in the prior year
•Production averaged a record 2.188 Bcfe per day, an increase of 13% compared to first quarter 2017 < This compares to my forecast of 2.180 Bcfe per day
•Drilled the two longest laterals to date by Range at 18,129 feet and 17,875 feet

Commenting, Jeff Ventura, the Company’s CEO said, “The first quarter was a good start to the year, generating record quarterly cash flow while remaining on track to deliver our expected 11% growth within cash flow for 2018. Operationally, Range is focused on translating our peer leading inventory into shareholder value as efficiently as possible. This effort is led by the Marcellus where record long laterals and the utilization of existing pads and infrastructure are a tailwind for capital efficiencies, positioning us to deliver on the long-term growth within cash flow we demonstrated in our five-year outlook. At the same time, Range is intently focused on actions to fast-forward the de-levering process as swiftly and prudently as possible through asset sales. We have various processes underway and believe we can execute one or more successful sales in the current year, which would improve our balance sheet and corporate returns.”

Range’s net production for first quarter 2018 averaged 2.188 Bcfe per day, consisting of 1.5 Bcf per day of natural gas, 103,000 barrels per day NGLs and 11,816 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, providing leverage to improving oil and NGL pricing fundamentals.

Wall Street is definitely slow to grasping how much NGL prices have improved and the fact that all three of our "Gassers" product a lot of liquids.

Including the cash settlements on their hedges, Range's realized price for production was $3.58/mcf. This compares to their all-in cash expenses of just $1.79, including interest expense.

The Wall Street misunderstanding of these high quality upstream companies is amazing.

In the last 3 months, 13 ranked analysts set 12-month price targets for RRC. The average price target among the analysts is $20.14.

Just in April, five analysts submitted new reports on RRC to Reuters with price targets ranging from $12.00 to $29.00. This wide range of valuations is from analyst that look at the same data and come up with wildly different numbers.

Range gives conservative guidance and using their guidance for production and expenses per mcfe, they should generate over $4.00/share cash flow from operations this year. Cash flow from operations should exceed their capital program budget by $50 to $100 million.

My updated forecast/valuation model will be posted to the EPG website this evening.