|RANGE RESOURCES CORP filed this Form 8-K on 07/31/2018|
The table below summarizes wells turned to sales and the estimated activity for the remainder of the year. Estimated well costs, lateral lengths and EUR’s by area can be found in the company presentation on Range’s website.
Production for second quarter 2018 averaged approximately 1,876 net Mmcfe per day from the Appalachia division, a 25% increase over the prior-year quarter. The southwest area of the division averaged 1,752 net Mmcfe per day during the quarter, a 30% increase over second quarter 2017. This was achieved through continued operational improvements and exceptional well results across Range’s acreage position. The northeast Marcellus properties averaged 107 net Mmcf per day and legacy acreage produced approximately 17 net Mmcf per day during the second quarter 2018.
Production for the division in second quarter of 2018 averaged approximately 313 net Mmcfe per day. The division brought on line four wells during the quarter, and expects to bring on line an additional three wells during the remainder of the year for a total of 11 wells in 2018.
Marketing and Transportation
Range’s marketing efforts were affected by two separate third-party midstream events during the second quarter that took away the primary method of transportation for certain production. The Company minimized the impact to cash flow by working with our various midstream and processing partners to maintain production during the downtime.
The transportation of natural gas liquids on Sunoco’s Mariner East 1 pipeline was suspended for almost two months during the second quarter. As a result, Range lost access to capacity on the Mariner East 1 pipeline for a combined 40,000 barrels per day of ethane and propane. As one of the largest NGL producers in the United States, Range has taken a portfolio approach to the sale of its purity products. The marketing team utilized alternate markets for Mariner East ethane volumes or simply sold the ethane as natural gas. For propane, Range has access to another local pipeline and railcars that continued to provide outlets to international markets via the Marcus Hook terminal as well as various domestic markets. As a result, Range was able to realize propane prices that were, on average, above the Mont Belvieu index price, while paying slightly higher transportation expense. The Mariner East 1 pipeline was returned to service in mid-June.
In early June, TransCanada’s Leach Xpress project on which Range holds natural gas capacity (300,000 Dth/day) was taken offline following a pipeline rupture in West Virginia. Range rerouted the natural gas production earmarked for the Leach Xpress capacity into local Appalachian markets. On July 15th, the Leach Xpress project returned to service.
Energy Transfer’s Rover project (phase 2), which is the last major natural gas transportation project for which Range has contracted capacity, is expected to reach full completion in third quarter 2018. Once the Rover project is in service, over 70% of Range’s production can be sold in the Gulf Coast market, which currently receives near NYMEX pricing.