SEC Filings

10-Q
RANGE RESOURCES CORP filed this Form 10-Q on 10/23/2018
Entire Document
 

2017. Daily production in third quarter 2018 averaged 2.3 Bcfe compared to 2.0 Bcfe in the same period of the prior year with the increase due to our successful Marcellus horizontal drilling program. Average natural gas differentials improved $0.39 per mcf while operating costs were lower when compared to the same period of 2017.

During third quarter 2018, we recognized net income of $48.5 million, or $0.19 per diluted common share compared to a net loss of $127.7 million, or $0.52 per diluted common share, during third quarter 2017. The increase in net income for third quarter 2018 from third quarter 2017 is primarily due to favorable derivative fair value income (or the non-cash fair value adjustments related to our derivatives), higher production volumes and realized prices along with lower proved and unproved property impairment charges.

Our third quarter 2018 financial and operating performance included the following results:

 

14% production growth over the same period of 2017;

 

 

revenue from the sale of natural gas, NGLs and oil increased 45% from the same period of 2017 with a 27% increase in average realized prices (before cash settlements on our derivatives) and an increase in production volumes;

 

 

revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 34% from the same period of 2017;

 

 

reduced direct operating expenses per mcfe 25% from the same period of 2017 (see discussion on page 38);

 

 

reduced general and administrative expense per mcfe 28% from the same period of 2017 (see discussion on page 38);

 

 

reduced interest expense per mcfe 4% from the same period of 2017;

 

 

reduced our depletion, depreciation and amortization (“DD&A”) rate per mcfe by 9% from the same period of 2017;

 

 

entered into additional derivative contracts for 2018, 2019, 2020 and 2021;

 

 

reduced our bank credit facility $48.0 million from June 2018; and

 

 

realized $229.4 million of cash flow from operating activities.

 

We generated $229.4 million of cash flow from operating activities in third quarter 2018, an increase of $40.2 million from third quarter 2017, which reflects improvements in realized prices and higher production volumes somewhat offset by higher comparative working capital outflows ($22.9 million outflow during third quarter 2018 compared to $4.4 million inflow in third quarter 2017).

Overview of First Nine Months 2018 Results

For first nine months 2018, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 6% increase in net realized prices (average prices including all derivative settlements and third party transportation costs paid by us) and 14% higher production volumes when compared to the same period of 2017. Daily production in first nine months 2018 averaged 2.2 Bcfe compared to 2.0 Bcfe in the same period of the prior year as a result of drilling and completions in Pennsylvania. Average natural gas differentials improved $0.30 per mcf while operating costs were higher when compared to the same period of 2017.

During first nine months 2018, we recognized net income of $17.9 million, or $0.07 per diluted common share compared to net income of $112.0 million, or $0.45 per diluted common share during the same period of 2017. The decrease in net income for first nine months 2018 from the same period of 2017 is primarily due to lower derivative fair value income or the non-cash fair value adjustments related to our derivatives somewhat offset by higher production volumes and realized prices and lower proved property impairment charges.

31