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Range Announces 26% Increase in Proved Reserves

FORT WORTH, Texas, Jan. 24, 2018 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION(NYSE:RRC) announced today that proved reserves at December 31, 2017 increased by 26% from the prior-year to 15.3 Tcfe.    

Highlights –   

  • SEC PV10 reserve value increased by 119% to $8.1 billion
  • Proved reserves increased by 3.2 Tcfe, or 26%
  • Reserve extensions, discoveries and additions were a record 3.5 Tcfe
  • Proved developed reserves increased 1.6 Tcfe, or 23%
  • Drill-bit finding cost of $0.31 per mcfe
  • Future development costs for proved undeveloped reserves are estimated to be $0.38 per mcfe
  • Unhedged recycle ratio over 3x based on future development costs of $0.38 per mcfe
  • Core undrilled inventory of over 3,800 Marcellus locations, assuming 10,000 foot laterals

Commenting on Range’s 2017 proved reserves, Jeff Ventura, Range’s CEO, said, “Range had another solid year of reserve growth, with impressive drill-bit finding costs of only $0.31 per mcfe.  Performance revisions are included, but revisions from increased prices are excluded.  Positive performance revisions continued in 2017 as we extended laterals, improved targeting and drove efficiencies throughout our developed leasehold and infrastructure.  Future development costs for proven undeveloped locations are estimated to be $0.38 per mcfe, which is outstanding and should improve our top tier unhedged recycle ratio to over 3x.  Importantly, Range added a record 3.5 Tcfe to proved reserves from extensions, discoveries and additions, driven primarily by our large inventory of low-risk, high-return projects in the Marcellus Shale.”

“Looking forward, we see capital efficiency gains continuing as we drive down normalized well costs with longer laterals and drilling on existing pads, while enhancing recoveries with improved targeting and completions.  Similar to previous years, this strong reserve growth reflects high quality acreage, as less than one third of our offset proven undeveloped locations are currently recorded for each horizontal producing well.  We believe this will provide consistent SEC reserve growth over time as additional acreage is classified as proven and capital is allocated to offset locations.  Our economic resilience is further demonstrated in the year-end PV10 reserve value of $9.5 billion using futures strip pricing from year-end and current sales contracts.  With 55% of SEC reserves being proved developed (PD), our PD reserve life and debt per PD reserve ratios remain exceptionally strong.”

(in Bcfe)  
Balance at December 31, 2016  12,072  
  Extensions, discoveries and additions    3,488  
  Purchases     10  
  Performance revisions:  
  PUD improved recovery    597  
  Field performance  531  
  Total performance revisions     1,128  
  Reclassification of PUD to unproved under SEC 5-year rule  (668 )
  Price revisions  46  
  Sales of proved reserves  (81 )
  Estimated production   (733 )
Balance at December 31, 2017  15,262  

During 2017, Range added 3.5 Tcfe of proved reserves through the drill-bit, driven by 3.2 Tcfe from the Company’s Marcellus development.  The “extensions, discoveries, and additions” amount excludes 597 Bcfe of Marcellus reserves associated with undrilled locations that now have increased recovery estimates as a result of longer laterals, better lateral targeting and increased frac stages.  This improved recovery estimate is included in the “revision” category.  The average lateral length for existing proved undeveloped locations increased to approximately 9,000 feet in the 2017 report from 7,162 feet in the 2016 report, while newly added proved undeveloped locations in the Marcellus incorporate an average lateral length of approximately 9,500 feet. 

Field level performance increased reserves by 531 Bcfe due primarily to the continued improvement in the well performance of existing Marcellus producing wells.  As a result of Range’s continued success in drilling longer laterals, the future development plan has been re-optimized resulting in some previously planned wells not being drilled within five years from their original booking date.  Accordingly, Range removed 668 Bcfe of proved undeveloped reserves that now fall outside the SEC mandated five-year development window.  The Company expects these proved undeveloped reserves to be added back in future years as field development continues.  The wells that remain have longer laterals, greater estimated ultimate recoveries (“EURs”) and lower per foot drilling and completion costs resulting in improved economics.  The resulting corporate proved undeveloped development cost of $0.38 per mcfe is a conservative estimate, based on 2017 well costs, EURs and lateral lengths, assuming no future efficiencies.  The higher SEC price for 2017 as compared to 2016 resulted in an upward pricing revision in proved reserve volumes of 46 Bcfe.

Year-end 2017 proved reserves by volume were 67% natural gas, 30% natural gas liquids and 3% crude oil and condensate.  Proved developed reserves represent 55% of the Company’s reserves.  The Company’s Appalachia reserves were audited by Wright & Company, Inc. and North Louisiana reserves were audited by Netherland, Sewell & Associates, Inc.  The audited reserve value estimates for each area were within 3% of aggregate estimates prepared by Range’s petroleum engineering staff. 

2017 SEC and Strip Pricing:

        2017 Year-End   2016 Year-End  
Pricing (a)
 Pricing (b)

WTI Oil Price ($/Bbl)
$ 51.19   $ 53.44   $ 42.68   $ 56.49  
  Natural Gas Price ($/Mmbtu) $ 2.98   $ 2.94   $ 2.48   $ 3.14  
  Proved Reserves PV-10
($ billions)
$ 8.1   $ 9.5   $ 3.7   $ 9.0  
  (a) 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.
  (b) SEC benchmark prices adjusted for energy content, quality and basis differentials were $2.07 per Mmbtu, $13.44 per barrel of natural gas liquids and $37.41 per barrel of crude oil, respectively.

Summary of Changes in Proved Reserves by Category for 2017

Total Proved
  (Bcfe)   (Bcfe)   (Bcfe)  
Proved Reserves 12/31/16 6,770     5,302     12,072    
Extensions, discoveries and additions 314     3,174     3,488    
Purchases 5     5     10    
PUDs drilled 1,862     (1,862 )   -    
Performance revisions 156     972     1,128    
5-year rule PUDs reclassified -     (668 )   (668 )  
Pricing revisions 46     -     46    
Sales of reserves (72 )   (9 )   (81 )  
Estimated production (733 )   -     (733 )  
Proved Reserves 12/31/17 8,348     6,914     15,262    

Percent by Category
55 %   45 %   100 %  
Increase in Reserves by Category 23 %   30 % ` 26 %  

Core Drilling Inventory

Range has an extensive stacked-pay acreage position in both Appalachia and North Louisiana.  Range also has a network of over 200 existing well pads.  These pads are designed to accommodate an average of 20 wells from any combination of the Marcellus, Utica or Upper Devonian horizons.  However, most pads currently contain only 4-6 producing wells, providing Range the opportunity to drill thousands of future wells utilizing existing roads, pads and infrastructure.

The table below reflects Range’s estimate of the remaining core drilling inventory for the Marcellus and Lower Cotton Valley.  The total inventory count is based on thousands of historical producing wells and a vast collection of geological information that support the Company’s estimates.  Please see slide 7 in the Company’s updated presentation for additional detail on Range’s Marcellus inventory.

Estimated Future Core Drilling Locations - December 31, 2017
(Excludes Deep Utica and Upper Devonian Locations)


Net Acres
Average Lateral
Marcellus- SW- Liquids areas 335,000 10,000 ft. 2,700
Marcellus- SW-Dry area 170,000 10,000 ft. 800
Marcellus- NE 90,000 10,000 ft. 300
Lower Cotton Valley 205,000 7,500 ft. 600
  Total 800,000   4,400 

Fourth Quarter Production

Company production in fourth quarter 2017 is expected to be 2.17 Bcfe per day, level with previous guidance.  Marcellus production is expected to be 1.80 Bcfe per day, approximately 27% higher than a year ago, driven by continued outstanding results in the Marcellus, particularly in the Company’s super-rich area.  North Louisiana volume is expected to be 350 Mmcfe per day for fourth quarter 2017.  The North Louisiana division saw productivity improvements in the fourth quarter well results compared to the first half of 2017 as a result of larger, higher cost completions; however the initial results are coming in below the Company’s 2017 production type curves.  Updated type curves for Range’s 2018 drilling program are provided in the Company’s updated presentation.   

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 December 31, 2017, which we plan to file with the Securities and Exchange Commission (SEC) on February 27, 2018.

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 SEC method of computing finding costs contains additional cost components and results in a higher number.  A reconciliation of the two methods will be shown on the Company’s website at after filing its 2017 Form 10-K.  

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 SEC. We believe that the presentation of pre-tax discounted present value is relevant and useful to our investors because it presents the discounted future net cash flows attributable to our proved reserves prior to taking into account future corporate income taxes and our current tax structure. We further believe investors and creditors use pre-tax discounted present value as a basis for comparison of the relative size and value of our reserves as compared with other companies. Range's pre-tax discounted present value as of December 31, 2017 may be reconciled to the GAAP financial measure of its standardized measure of discounted future net cash flows as of December 31, 2017 by reducing Range's pre-tax discounted present value by the discounted future income taxes associated with such reserves. This reconciliation will be included in the Company’s 2017 Form 10-K.

RANGE RESOURCES CORPORATION(NYSE:RRC) is a leading U.S. independent natural gas, NGL and oil producer with operations focused in stacked-pay projects in the Appalachian Basin and North Louisiana.  The Company pursues an organic growth strategy targeting high return, low-cost projects within its large inventory of low risk development drilling opportunities. The Company is headquartered in Fort Worth, Texas.  More information about Range can be found at

This release contains certain “forward-looking statements” within the meaning of federal securities laws, including within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect Range’s current beliefs, expectations or intentions regarding future events.  Words such as “may,” “will,” “could,” “should,” “expect,” ““plan,” “project,” “intend,” “anticipate,” “believe,” “outlook”, “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. The statements in this presentation that are not historical statements, and any other statements regarding Range’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws. 

All statements, except for statements of historical fact, made in this presentation regarding activities, events or developments the Company expects, believes or anticipates will or may occur in the future, such as those regarding future well costs, expected asset sales, well productivity, future liquidity and financial resilience, anticipated exports and related financial impact, NGL market supply and demand, improving commodity fundamentals and pricing, future capital efficiencies, future shareholder value, emerging plays, capital spending, anticipated drilling and completion activity, acreage prospectivity, expected pipeline utilization and future guidance information 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 Securities and Exchange Commission ("SEC"), which are incorporated by reference.  Range undertakes no obligation to publicly update or revise any forward-looking statements.

The SEC permits oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions as well as the option to disclose probable and possible reserves.  Range has elected not to disclose the Company’s probable and possible reserves in its filings with the SEC.  Range uses certain broader terms such as "resource potential,” “unrisked resource potential,” "unproved resource potential" or "upside" or other descriptions of volumes of resources potentially recoverable through additional drilling or recovery techniques that may include probable and possible reserves as defined by the SEC's guidelines.  Range has not attempted to distinguish probable and possible reserves from these broader classifications. The SEC’s rules prohibit us from including in filings with the SEC these broader classifications of reserves.  These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of actually being realized.  Unproved resource potential refers to Range's internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques and have not been reviewed by independent engineers.  Unproved resource potential does not constitute reserves within the meaning of the Society of Petroleum Engineer's Petroleum Resource Management System and does not include proved reserves.  Area wide unproven resource potential has not been fully risked by Range's management.  “EUR,” or estimated ultimate recovery, refers to our management’s estimates of hydrocarbon quantities that may be recovered from a well completed as a producer in the area. These quantities may not necessarily constitute or represent reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or the SEC’s oil and natural gas disclosure rules. Actual quantities that may be recovered from Range's interests could differ substantially.  Factors affecting ultimate recovery include the scope of Range's drilling program, which will be directly affected by the availability of capital, drilling and production costs, commodity prices, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals, field spacing rules, recoveries of gas in place, length of horizontal laterals, actual drilling results, including geological and mechanical factors affecting recovery rates and other factors.  Estimates of resource potential may change significantly as development of our resource plays provides additional data. 

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 or by written request to 100 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102.  You can also obtain this Form 10-K on the SEC’s website at or by calling the SEC at 1-800-SEC-0330.

Range Investor Contacts:

Laith Sando, Vice President – Investor Relations

David Amend, Investor Relations Manager

Michael Freeman, Senior Financial Analyst

Josh Stevens, Financial Analyst


Range Media Contact:

Michael Mackin, Director of External Affairs


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