Range Resources (RRC) Q2 Results - July 25
Posted: Mon Jul 25, 2022 6:46 pm
Q2 results are very close to my forecast:
> Non-GAAP revenues for second quarter 2022 totaled $1.06 billion < My forecast was $1.053 billion.
> and cash flow from operations before changes in working capital, a non-GAAP measure, was $519 million. < My forecast was $535.2 million
> Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $315 million ($1.27 per diluted share) in second quarter 2022. < My forecast was $314.6 million ($1.25 per share because of my higher share count). They are aggressively buying back shares.
> Production of 2,073,924 mcfepd beat my forecast of 2,056,600 because they produced more high value NGLs.
> Realized ngas and oil prices where slightly below my forecast but NGL prices were almost $3/bbl higher. < This is a good sign for AR and EQT, which also produce a lot of unhedged NGLs.
Second quarter 2022 drilling and completion expenditures were $119 million. In addition, during the quarter, $7.5
million was invested in acreage leasehold and gathering systems. Second quarter capital spending represents
approximately 27% of Range’s total capital budget in 2022. Total capital expenditures year to date were $244
million at the end of the second quarter. Range expects capital expenditures to decline in the second half of the year,
and as a result, Range reiterates full-year 2022 capital spending guidance of $460 million to $480 million with
expectations at the upper end of the guidance. < The Wall Street Gang should like this because a lot of them are expecting 10% to 15% increases in capex spending due to inflation.
The balance sheet keeps looking better each quarter and the income statement line items are close to my forecast. Range gives very good guidance, so I have a HIGH level of confidence in my forecast model for this one. I have been following RRC for over 20 years since it is one of the original Sweet 16.
I want to stress that Range has an outstanding marketing team. If utilities get into a bidding war this winter (highly likely) Range should be able to get some undedicated gas to the spot markets to get some BIG premiums for their ngas and NGLs.
> Non-GAAP revenues for second quarter 2022 totaled $1.06 billion < My forecast was $1.053 billion.
> and cash flow from operations before changes in working capital, a non-GAAP measure, was $519 million. < My forecast was $535.2 million
> Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $315 million ($1.27 per diluted share) in second quarter 2022. < My forecast was $314.6 million ($1.25 per share because of my higher share count). They are aggressively buying back shares.
> Production of 2,073,924 mcfepd beat my forecast of 2,056,600 because they produced more high value NGLs.
> Realized ngas and oil prices where slightly below my forecast but NGL prices were almost $3/bbl higher. < This is a good sign for AR and EQT, which also produce a lot of unhedged NGLs.
Second quarter 2022 drilling and completion expenditures were $119 million. In addition, during the quarter, $7.5
million was invested in acreage leasehold and gathering systems. Second quarter capital spending represents
approximately 27% of Range’s total capital budget in 2022. Total capital expenditures year to date were $244
million at the end of the second quarter. Range expects capital expenditures to decline in the second half of the year,
and as a result, Range reiterates full-year 2022 capital spending guidance of $460 million to $480 million with
expectations at the upper end of the guidance. < The Wall Street Gang should like this because a lot of them are expecting 10% to 15% increases in capex spending due to inflation.
The balance sheet keeps looking better each quarter and the income statement line items are close to my forecast. Range gives very good guidance, so I have a HIGH level of confidence in my forecast model for this one. I have been following RRC for over 20 years since it is one of the original Sweet 16.
I want to stress that Range has an outstanding marketing team. If utilities get into a bidding war this winter (highly likely) Range should be able to get some undedicated gas to the spot markets to get some BIG premiums for their ngas and NGLs.