SEC Filings

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

G&A expense for first nine months 2018 increased by $6.9 million when compared to the same period of the prior year due to higher stock-based compensation costs of $3.2 million, higher severance costs, higher land and legal consulting costs and higher technology costs. The higher stock-based compensation costs are related to those officers that qualified for the postretirement plan implemented in fourth quarter 2017 and therefore also qualified for accelerated vesting of equity grants. In addition, the timing of senior executive equity grants was moved from May to March in 2018 to better align with our proxy statement filings. On a per mcfe basis, G&A expense for first nine months 2018 decreased 10% from first nine months 2017 due to the impact of higher production volumes. The following table summarizes G&A expenses per mcfe for the three months and nine months ended September 30, 2018 and 2017:

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

2018

 

 

2017

 

 

Change

 

 

%

 

 

2018

 

2017

 

Change

 

%

 

General and administrative

$

0.18

 

 

$

0.24

 

 

$

(0.06

)

 

(25

%)

 

$

0.20

 

$

0.22

 

$

(0.02

)

(9

%)

Stock-based compensation (non-cash)

 

0.03

 

 

 

0.05

 

 

 

(0.02

)

 

(40

%)

 

 

0.06

 

 

0.07

 

 

(0.01

)

(14

%)

Total general and administrative expense

$

0.21

 

 

$

0.29

 

 

$

(0.08

)

 

(28

%)

 

$

0.26

 

$

0.29

 

$

(0.03

)

(10

%)

Interest expense was $54.8 million in third quarter 2018 compared to $49.2 million in third quarter 2017. Interest expense was $161.0 million for nine months 2018 compared to $144.2 million in the same period of 2017. The following table presents information about interest expense per mcfe for the three months and nine months ended September 30, 2018 and 2017:

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

2018

 

 

2017

 

 

Change

 

 

%

 

 

2018

 

2017

 

Change

 

%

 

Bank credit facility

$

0.07

 

 

$

0.05

 

 

$

0.02

 

 

40

%

 

$

0.07

 

$

0.05

 

$

0.02

 

40

%

Senior notes

 

0.18

 

 

 

0.20

 

 

 

(0.02

)

 

(10

%)

 

 

0.19

 

 

0.21

 

 

(0.02

)

(10

%)

Subordinated notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

%

Amortization of deferred financing costs and other

 

0.01

 

 

 

0.02

 

 

 

(0.01

)

 

(50

%)

 

 

0.01

 

 

0.01

 

 

 

%

Total interest expense

$

0.26

 

 

$

0.27

 

 

$

(0.01

)

 

(4

%) 

 

$

0.27

 

$

0.27

 

$

 

%

 

Average debt outstanding (in thousands)

$

4,279,958

 

 

$

4,003,045

 

 

$

276,913

 

 

7

%

 

$

4,249,437

 

$

3,915,044

 

$

334,393

 

9

%

Average interest rate (a)

 

5.0

%

 

 

4.7

%

 

 

0.3

%

 

6

%

 

 

4.9

%

 

4.7

%

 

0.2

%

4

%

(a) Includes commitment fees but excludes debt issue costs and amortization of discounts.

On an absolute basis, the increase in interest expense for third quarter 2018 from the same period of 2017 was primarily due to higher average outstanding debt balances and slightly higher average interest rates. Average debt outstanding on the bank credit facility for third quarter 2018 was $1.4 billion compared to $1.1 billion in third quarter 2017 and the weighted average interest rate on the bank credit facility was 3.9% in third quarter 2018 compared to 2.8% in third quarter 2017.

On an absolute basis, the increase in interest expense for first nine months 2018 from the same period of 2017 was primarily due to higher average outstanding debt balances and slightly higher average interest rates. Average debt outstanding on the bank credit facility was $1.3 billion for first nine months 2018 compared to $989.0 million for the same period of 2017 and the weighted average interest rate on the bank credit facility was 3.7% in first nine months 2018 compared to 2.6% in first nine months 2017.

Depletion, depreciation and amortization expense was $164.3 million in third quarter 2018 compared to $159.7 million in third quarter 2017. This increase is due to a 14% increase in production volumes somewhat offset by a 10% decrease in depletion rates. Depletion expense, the largest component of DD&A expense, was $0.76 per mcfe in third quarter 2018 compared to $0.84 per mcfe in third quarter 2017. We have historically adjusted our depletion rates in the fourth quarter of each year based on the year-end reserve report and at other times during the year when circumstances indicate there has been a significant change in reserves or costs. Our depletion rate per mcfe continues to decline due to the mix of production from our properties with lower depletion rates and asset sales.

39