Range Resources (RRC) Update - Mar 17

[dan_s]

Last but not least!

I have (FINALLY) finished updating all of the Sweet 16 forecast/valuation models for my higher oil & gas price deck.
All forecasts are now based on the assumptions that WTI will average $100/bbl in 2022 and $90/bbl in 2023 and that natural gas will average $4.25/MMBtu in 2022 and $4.00/MMBtu in 2023. Commodity price can go a lot higher or a lot lower, but I now believe that this world is in for an extended period of high (and likely much higher) energy prices. Headlines and geopolitical risk will continue to drive high volatility for most commodity prices.

We have elected fools to dictate our energy policy. They have listened to the Green New Deal Wackos. We will see "energy poverty" spread, forcing more and more people into lower standards of living. My hope is that Washington learns from the mess in Europe. As Americans we are blessed to have an abundant supply of clean burning natural gas. These resources will insulate North Americans from the high energy prices in Europe and Asia.

Range Resources (RRC) is a large-cap gasser. I have followed it closely for over two decades. They hold some very valuable leasehold, most of it HBP, in the Marcellus/Utica shale plays. RRC gained 166% in 2021 and the company was in great shape heading into 2022. As of March 11th closing price RRC was up 54.4% YTD, which leads the Sweet 16.

My valuation is now $41/share and there is upside to that because it will be generating lots of FCF to increase dividends and fund an aggressive stock buyback. In addition to producing more than 1.5 Bcf of natural gas per day, Range produces over 100,000 bpd of high value NGLs.

RRC was trading at $27.08 at the time of this post.