Range Resources (RRC) Q2 Results - July 31
Posted: Sat Jul 31, 2021 10:14 am
Range Resources results for Q2 came in below my forecast primarily due to higher differentials on their dry gas production (-$0.40/mcf) and higher transportation, gathering & compression expenses than expected. Partially offset by higher realized NGL prices and higher liquids production than my forecast.
Free cash flow continues to pay down debt
In April 2021, Range redeemed outstanding principal amounts of senior notes due in 2021 and 2022 totaling approximately $26.0 million and senior subordinated notes due in 2021, 2022 and 2023 totaling approximately $37.3 million.
As of June 30, 2021, Range had total debt outstanding of $3.1 billion, consisting of $121 million in bank debt and $2.95 billion in senior notes. The Company has approximately $750 million in senior notes that mature through 2023, which are expected to be retired with projected free cash flow at current strip pricing. Range had over $1.9 billion of borrowing capacity under the bank credit facility commitment amount at the end of the second quarter.
Per slide 17 of their updated presentation: RRC's net asset value discounted at 10% of just proved reserves (P1) based on $3.00/mcf gas price and $60/bbl oil price is over $30 per share as of 6-30-2021. < If natural gas prices for the remainder of 2021 are close to the current strip prices, Range's net asset value (PV10) as of 12-31-2021 could be over $35/share.
Per slide 28 of their update presentation: RRC now expects their realized NGL prices in 2H 2021 could be over $4.00/bbl higher from Q2 realized prices of $25.64/bbl in 2H 2021. This is also very good news for AR.
7/27/2021: RBC Capital analyst Scott Hanold maintained a Buy rating on Range Resources Corp (NYSE:RRC) on Tuesday, setting a price target of $22.
I have updated my forecast/valuation model for RRC and it will be posted to the EPG website this afternoon. My valuation increases by $1.00 to $25.50/share, primarily due to higher NGL prices and a higher percentage of Range's production being liquids.
Free cash flow continues to pay down debt
In April 2021, Range redeemed outstanding principal amounts of senior notes due in 2021 and 2022 totaling approximately $26.0 million and senior subordinated notes due in 2021, 2022 and 2023 totaling approximately $37.3 million.
As of June 30, 2021, Range had total debt outstanding of $3.1 billion, consisting of $121 million in bank debt and $2.95 billion in senior notes. The Company has approximately $750 million in senior notes that mature through 2023, which are expected to be retired with projected free cash flow at current strip pricing. Range had over $1.9 billion of borrowing capacity under the bank credit facility commitment amount at the end of the second quarter.
Per slide 17 of their updated presentation: RRC's net asset value discounted at 10% of just proved reserves (P1) based on $3.00/mcf gas price and $60/bbl oil price is over $30 per share as of 6-30-2021. < If natural gas prices for the remainder of 2021 are close to the current strip prices, Range's net asset value (PV10) as of 12-31-2021 could be over $35/share.
Per slide 28 of their update presentation: RRC now expects their realized NGL prices in 2H 2021 could be over $4.00/bbl higher from Q2 realized prices of $25.64/bbl in 2H 2021. This is also very good news for AR.
7/27/2021: RBC Capital analyst Scott Hanold maintained a Buy rating on Range Resources Corp (NYSE:RRC) on Tuesday, setting a price target of $22.
I have updated my forecast/valuation model for RRC and it will be posted to the EPG website this afternoon. My valuation increases by $1.00 to $25.50/share, primarily due to higher NGL prices and a higher percentage of Range's production being liquids.