|RANGE RESOURCES CORP filed this Form 10-K on 02/22/2017|
As of December 31, 2016, our PUDs totaled 31.1 Mmbbls of crude oil, 266.2 Mmbbls of NGLs and 3.5 Tcf of natural gas, for a total of 5.3 Tcfe. Costs incurred in 2016 relating to the development of PUDs were approximately $245.6 million. Approximately 86% of our PUDs at year-end 2016 were associated with the Marcellus Shale. All PUD drilling locations are scheduled to be drilled prior to the end of 2021 with more than 90% of the future development costs expected to be spent in the next three years. Changes in PUDs that occurred during the year were due to:
For an additional description of changes in PUDs for 2016, see Note 19 to our consolidated financial statements. We believe our PUDs reclassified to unproved can be included in our future proved reserves as these locations are added back into our five-year development plan.
Proved Reserves (PV-10)
The following table sets forth the estimated future net cash flows, excluding open derivative contracts, from proved reserves, the present value of those net cash flows discounted at a rate of 10% (PV-10), and the expected benchmark prices and average field prices used in projecting net cash flows over the past five years. Our reserve estimates do not include any probable or possible reserves (in millions, except prices):
Future net cash flows represent projected revenues from the sale of proved reserves, net of production and development costs (including operating expenses and production taxes). Revenues are based on a twelve-month unweighted average of the first day of the month pricing, without escalation. Future cash flows are reduced by estimated production costs, administrative costs, costs to develop and produce the proved reserves and abandonment costs, all based on current economic conditions at each year-end. There can be no assurance that the proved reserves will be produced in the future or that prices, production or development costs will remain constant. There are numerous uncertainties inherent in estimating reserves and related information and different reservoir engineers often arrive at different estimates for the same properties.
Currently, our natural gas and oil operations are concentrated in the Appalachian and North Louisiana regions of the United States, primarily in the Marcellus Shale in Pennsylvania and the Lower Cotton Valley formation in Louisiana. Our North Louisiana properties were acquired in September 2016. Our properties consist of interests in developed and undeveloped natural gas and oil leases. These interests entitle us to drill for and produce natural gas, NGLs, crude oil and condensate from specific areas. Our interests are mostly in the form of working interests and, to a lesser extent, royalty and overriding royalty interests. We have a single company-wide management team that administers all properties as a whole. We track only basic operational data by area. We do not maintain complete separate financial statement information by area. We measure financial performance as a single enterprise and not on an area-by-area basis. The table below summarizes our operating data for the year ended December 31, 2016.