Range Announces 2018 Proved Reserves
Highlights –
- Year-end 2018 PV10 value of reserves using future strip prices was
$9.9 billion - Year-end 2018 SEC PV10 value of proved reserves was
$13.2 billion , up$5.1 billion from prior year - Proved reserves increased by 2.8 Tcfe, or 18%
- Reserve extensions, discoveries and additions were 3.1 Tcfe
- Proved developed reserves increased 1.4 Tcfe, or 17%
- Drill-bit finding cost of
$0.22 per mcfe, including performance revisions - Future development costs for proved undeveloped reserves estimated to be
$0.40 per mcfe - Unhedged recycle ratio over 2.5x based on future development costs of
$0.40 per mcfe
Commenting on Range’s 2018 proved reserves,
“Similar to previous years, Range’s strong reserve growth was accomplished while having less than one-third of our offset proven undeveloped locations currently recorded for each horizontal producing well. We believe this demonstrates our ability to grow
SUMMARY OF CHANGES IN PROVED RESERVES | |||
(in Bcfe) | |||
Balance at December 31, 2017 | 15,262 | ||
Extensions, discoveries and additions | 3,144 | ||
Performance revisions: | |||
PUD improved recovery | 154 | ||
Field performance | 945 | ||
Total performance revisions | 1099 | ||
Reclassification of PUD to unproved under SEC 5-year rule | (379 | ) | |
Price revisions | 11 | ||
Sales of proved reserves | (262 | ) | |
Production | (803 | ) | |
Balance at December 31, 2018 | 18,072 | ||
During 2018, Range added 3.1 Tcfe of proved reserves through the drill-bit, driven by 3.0 Tcfe from the Company’s Marcellus development. The “extensions, discoveries, and additions” amount excludes 154 Bcfe of Marcellus reserves associated with undrilled locations that now have increased recovery estimates as a result of longer laterals and improved lateral targeting and completion design. This improved recovery estimate is included in the “revision” category. The average lateral length for proved undeveloped locations was approximately 9,300 feet in the 2018 report with newly added Marcellus locations incorporating an average lateral length of approximately 10,200 feet.
Field level performance increased reserves by 945 Bcfe due to continued improvement in the well performance of existing Marcellus producing wells and 611 Bcfe of reserves associated with proved undeveloped locations which have re-entered the Company’s five-year drilling program. As future development plans are continually optimized, some previously planned wells are not being drilled within five years from their original booking date. Accordingly, Range removed 379 Bcfe of proved undeveloped reserves that now fall outside the
Year-end 2018 proved reserves by volume were 67% natural gas, 30% natural gas liquids and 3% crude oil and condensate. Proved developed reserves represent 54% of the Company’s reserves. The Company’s Appalachia reserves were audited by
2018
2018 Year-End | 2017 Year-End | |||||||||||||||||||||||||||||
SEC Pricing (a) |
Strip Pricing |
SEC Pricing (b) |
Strip Pricing | |||||||||||||||||||||||||||
WTI Oil Price ($/Bbl) |
$ | 65.55 | $ | 51.54 | $ | 51.19 | $ | 53.44 | ||||||||||||||||||||||
Natural Gas Price ($/Mmbtu) | $ | 3.10 | $ | 2.83 | $ | 2.98 | $ | 2.94 | ||||||||||||||||||||||
Proved Reserves PV-10 ($ billions) |
$ | 13.2 | $ | 9.9 | $ | 8.1 | $ | 9.5 | ||||||||||||||||||||||
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(a) SEC benchmark prices adjusted for energy content, quality and basis differentials were $2.98 per Mmbtu, $25.22 per barrel of natural gas liquids and $59.96 per barrel of crude oil, respectively. |
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(b) SEC benchmark prices adjusted for energy content, quality and basis differentials were $2.60 per Mmbtu, $17.84 per barrel of natural gas liquids and $45.73 per barrel of crude oil, respectively. | ||||||||||||||||||||||||||||||
Summary of Changes in Proved Reserves by Category for 2018 |
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Proved Developed Reserves | Proved Undeveloped Reserves | Total Proved Reserves |
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(Bcfe) | (Bcfe) | (Bcfe) | ||||||||||||||||||||||||||||
Proved Reserves 12/31/17 | 8,348 | 6,914 | 15,262 | |||||||||||||||||||||||||||
Extensions, discoveries and additions | 419 | 2,725 | 3,144 | |||||||||||||||||||||||||||
PUDs drilled | 1,805 | (1,805 | ) | - | ||||||||||||||||||||||||||
Performance revisions | 111 | 988 | 1,099 | |||||||||||||||||||||||||||
5-year rule PUDs reclassified | - | (379 | ) | (379 | ) | |||||||||||||||||||||||||
Pricing revisions | 11 | - | 11 | |||||||||||||||||||||||||||
Sales of reserves | (134 | ) | (128 | ) | (262 | ) | ||||||||||||||||||||||||
Estimated production | (803 | ) | - | (803 | ) | |||||||||||||||||||||||||
Proved Reserves 12/31/18 | 9,757 | 8,315 | 18,072 | |||||||||||||||||||||||||||
Percent by Category |
54 | % | 46 | % | 100 | % | ||||||||||||||||||||||||
Increase in Reserves by Category | 17 | % | 20 | % | ` | 18 | % | |||||||||||||||||||||||
Disclosure Statements:
Certain selected financial information in this release is unaudited. Audited financial results will be provided in our Annual Report on Form 10-K for the year ended
Finding and development (F&D) cost per unit is a non-GAAP metric used in the exploration and production industry by companies, investors and analysts. The calculations presented by the Company are based on estimated and unaudited costs incurred excluding asset retirement obligations, gas gathering facilities and non-cash stock-based compensation and divided by proved reserve additions (extensions, discoveries and additions shown in the table) adjusted for the changes in proved reserves for performance, price and deferral revisions or excluding certain costs such as acreage and acquisitions as stated in each instance in the release. Drill-bit development cost per mcfe is based on estimated and unaudited drilling, development and exploration costs incurred divided by the reserve extensions, discoveries and additions with the inclusion of any revisions as specified in the stated measurement. These calculations do not include the future development costs required for the development of proved undeveloped reserves. The
F&D cost per unit as a statistical indicator can have limitations, including its predictive and comparative value. As an annual measure, F&D cost per unit does not consider the cost or timing of future production of new reserves, and therefore may not be an accurate predictor of future value creation. In addition, it may not be comparable to similarly titled measurements used by other companies.
Year-end pre-tax discounted present value is considered a non-GAAP financial measure as defined by the
All statements, except for statements of historical fact, made in this release regarding activities, events or developments the Company expects, believes or anticipates will or may occur in the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and Range's future performance are subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements. Further information on risks and uncertainties is available in Range's filings with the
The
In addition, our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. Investors are urged to consider closely the disclosure in our most recent Annual Report on Form 10-K, available from our website at www.rangeresources.com or by written request to
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817-869-1538
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