SEC Filings

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

DD&A expense was $487.6 million in first nine months 2018 compared to $462.1 million in the same period of 2017. This is due to a 14% increase in production volumes somewhat offset by a 7% decrease in depletion rates. Depletion expense was $0.78 per mcfe in first nine months 2018 compared to $0.84 in the same period of 2017. The following table summarizes DD&A 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

 

%

 

Depletion and amortization

$

0.76

 

 

$

0.84

 

 

$

(0.08

)

 

(10

%)

 

$

0.78

 

$

0.84

 

$

(0.06

)

(7

%)

Depreciation

 

0.01

 

 

 

0.01

 

 

 

 

 

%

 

 

 

 

0.01

 

 

(0.01

)

(100

%)

Accretion and other

 

0.02

 

 

 

0.02

 

 

 

 

 

%

 

 

0.02

 

 

0.02

 

 

 

%

Total DD&A expense

$

0.79

 

 

$

0.87

 

 

$

(0.08

)

 

(9

%) 

 

$

0.80

 

$

0.87

 

$

(0.07

)

(8

%)

Other Operating Expenses

Our total operating expenses also include other expenses that generally do not trend with production. These expenses include stock-based compensation, brokered natural gas and marketing expense, exploration expense, abandonment and impairment of unproved properties, termination costs, deferred compensation plan expenses, impairment of proved properties and gain or loss on sale of assets. Stock-based compensation includes the amortization of restricted stock grants and PSUs. The following table details the allocation of stock-based compensation to functional expense categories for the three months and nine months ended September 30, 2018 and 2017 (in thousands):

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

2018

 

 

2017

 

 

2018

 

2017

 

Direct operating expense

$

537

 

 

$

517

 

 

$

1,667

 

$

1,563

 

Brokered natural gas and marketing expense

 

403

 

 

 

389

 

 

 

1,001

 

 

1,040

 

Exploration expense

 

405

 

 

 

561

 

 

 

1,527

 

 

1,596

 

General and administrative expense

 

5,607

 

 

 

9,959

 

 

 

38,332

 

 

35,156

 

Termination costs

 

 

 

 

(31

)

 

 

 

 

1,665

 

Total stock-based compensation

$

6,952

 

 

$

11,395

 

 

$

42,527

 

$

41,020

 

 

Brokered natural gas and marketing expense was $116.1 million in third quarter 2018 compared to $59.8 million in third quarter 2017. The increase reflects significantly higher broker purchase volumes, purchase prices and transportation costs. Brokered natural gas and marketing expense was $274.4 million for first nine months 2018 compared to $169.2 million in the same period of 2017. This increase reflects significantly higher broker purchase volumes and higher transportation costs. The following table details our brokered natural gas, marketing and other net margin for the three months and nine months ended September 30, 2018 and 2017 (in thousands):

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2018

 

 

2017

 

 

Change

 

 

%

 

 

2018

 

2017

 

Change

 

%

 

Brokered natural gas sales

$

105,840

 

 

$

57,292

 

 

$

48,548

 

 

85

%

 

$

255,134

 

$

156,899

 

$

98,235

 

63

%

Brokered NGL sales

 

(153

)

 

 

 

 

 

(153

)

 

%

 

 

880

 

 

728

 

 

152

 

(21

%)

Other marketing revenue

 

3,698

 

 

 

5,825

 

 

 

(2,127

)

 

(37

%) 

 

 

11,434

 

 

12,917

 

 

(1,483

)

(11

%)

Brokered natural gas purchases

 

(113,886

)

 

 

(57,387

)

 

 

(56,499

)

 

98

 

 

(265,817

)

 

(161,741

)

 

(104,076

)

64

%

Brokered NGL purchases

 

165

 

 

 

 

 

 

165

 

 

%

 

 

(776

)

 

(601

)

 

(175

)

29

%

Other marketing expense

 

(2,359

)

 

 

(2,386

)

 

 

27

 

 

(1

%) 

 

 

(7,828

)

 

(6,838

)

 

(990

)

14

%

Net brokered natural gas and marketing net margin

$

(6,695

)

 

$

3,344

 

 

$

(10,039

)

 

(300

%)

 

$

(6,973

)

$

1,364

 

$

(8,337

)

(611

%)

40