Range Resources (RRC) Q4 Update - Feb 10

[dan_s]

FORT WORTH, Texas, Feb. 09, 2022 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION (NYSE: RRC) today announced that fourth quarter 2021 production averaged approximately 2,198 Mmcfe per day, and fourth quarter 2021 all-in capital spending totaled $92.3 million. In addition, Range realized $29.5 million in contingent derivative settlement gains in fourth quarter 2021. < Q4 production compares to my forecast of 2,175 Mmcfe per day and the positive cash settlement on their hedges is a nice surprise.

Production and Pricing

Fourth quarter 2021 daily natural gas production averaged approximately 1,534 Mmcf per day. The average natural gas realization, including the impact of basis hedges, was $5.38 per mcf, the highest quarterly pre-hedge realization since 2014. The average natural gas price, including settled index hedges, was $3.27 per mcf. In addition, Range realized a contingent derivative settlement gain of $20 million related to natural gas prices in 2021. < RRC has an outstanding marketing team that was able to move some of their gas to take advantage of high spot market prices.

Fourth quarter 2021 daily NGL production averaged approximately 102,126 barrels per day. Pre-hedge NGL realizations were $36.26 per barrel, the highest quarterly pre-hedge NGL realization since 2013. The average NGL price, including settled index hedges, was $34.77 per barrel. In addition, Range realized a contingent derivative settlement gain of $6 million related to NGL prices in 2021.

Fourth quarter 2021 daily oil and condensate production averaged approximately 8,674 barrels per day. Crude oil and condensate price realizations, before realized hedges, averaged $70.07 per barrel, the highest quarterly pre-hedge realization since 2014. The average condensate price, including settled index hedges, was $52.56 per barrel. In addition, Range realized a contingent derivative settlement gain of $3.5 million related to WTI prices.

Natural gas, NGL and oil production volumes were all slightly higher than my forecast. Realized prices net of cash settlements on their ngas was slightly lower than my forcast, but were offset by $4.77/bbl higher realized prices on their NGLs.

Capital Expenditures

Fourth quarter 2021 drilling and completion expenditures were $83.7 million. In addition, during the quarter, $8.6 million was invested on acreage leasehold, gathering systems and other corporate items. Total capital expenditures in 2021 were $414 million, which was approximately $11 million below original guidance of $425 million and approximately $1 million below the revised guidance of $415 million, which was announced in October 2021. This represents the fourth consecutive year that Range delivered operational plans below budget. < Full year operating cash flow should be approximately $1,037 million ($4.26/share), so FCF s/b approximately $623 million.

Contingent Derivatives

In fourth quarter 2021, Range realized a total of $29.5 million in contingent derivative settlement gains related to the North Louisiana divestiture. This represents the maximum amount that Range could receive pertaining to 2021 commodity prices, and Range expects to receive the cash proceeds in the first half of 2022. Range has the potential to receive an additional $45.5 million in contingent payments based on natural gas, NGL and oil prices in 2022 and 2023. At year-end 2021, the fair value of these remaining contingent payments was approximately $26.6 million.

Conference Call Information

Range’s fourth quarter 2021 financial results news release will be issued Tuesday, February 22 after the close of trading on the New York Stock Exchange.

A conference call to review the financial results is scheduled on Wednesday, February 23 at 9:00 a.m. ET (8:00 a.m. CT). A webcast of the call may be accessed at www.rangeresources.com. The webcast will be archived for replay on the Company's website until March 22, 2022.

RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading U.S. independent natural gas and NGL producer with operations focused on stacked-pay projects in the Appalachian Basin. The Company is headquartered in Fort Worth, Texas. More information about Range can be found at www.rangeresources.com.
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My valuation of RRC stays at $32.00 for now, but I will update the valuation once the Company provides detailed 2022 guidance as expected on Feb 23.

[dan_s]

Stifel's take:

Range Resources Corporation (RRC, $19.24, Buy; Target $34.00)
Tweaking Estimates on 4Q21 Pre-Release - Michael S. Scialla
We view Wednesday's release as neutral (keeping Stifel's price target at $34.00).
Pre-released 4Q21 production and pricing were 1% above and 2% below our forecast, respectively, causing us to lower our 4Q21 CFPS estimate 2%, 2% below consensus. Lower than expected unhedged realized gas (-2%) and NGL prices (-3%) more than offset better than expected oil/condensate prices (2%). 4Q21 capex was in line with consensus. Proved reserves increased 3% y/y and included a 14th consecutive year of positive performance revisions. Implied development costs of $0.29/Mcfe ($1.74/Boe) are among the lowest in our universe.

[dan_s]

TipRanks: "In the last 3 months, 12 ranked analysts set 12-month price targets for RRC. The average price target among the analysts is $26.62."