SEC Filings

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

The following table presents sources and uses of cash and cash equivalents for the nine months ended September 30, 2018 and 2017 (in thousands):

 

Nine Months Ended

September 30,

 

 

 

2018

 

 

 

2017

 

Sources of cash and cash equivalents

 

 

 

 

 

 

 

Operating activities

$

774,947

 

 

$

600,532

 

Disposal of assets

 

24,339

 

 

 

27,583

 

Borrowing on credit facility

 

1,602,000

 

 

 

1,486,000

 

Other

 

45,824

 

 

 

38,825

 

Total sources of cash and cash equivalents

$

2,447,110

 

 

$

2,152,940

 

 

 

 

 

 

 

 

 

Uses of cash and cash equivalents

 

 

 

 

 

 

 

Additions to natural gas and oil properties

$

(781,554

)

 

$

(771,067

)

Repayment on credit facility

 

(1,547,000

)

 

 

(1,282,000

)

Repayment of senior notes

 

 

 

 

(500

)

Acreage purchases

 

(50,461

)

 

 

(46,967

)

Additions to field service assets

 

(1,230

)

 

 

(4,687

)

Dividends paid

 

(14,950

)

 

 

(14,876

)

Debt issuance costs

 

(8,257

)

 

 

(247

)

Other

 

(43,749

)

 

 

(32,381

)

Total uses of cash and cash equivalents

$

(2,447,201

)

 

$

(2,152,725

)

Net cash provided from operating activities in first nine months 2018 was $774.9 million compared to $600.5 million in first nine months 2017. Cash provided from operating activities is largely dependent upon commodity prices and production volumes, net of the effects of settlement of our derivative contracts. The increase in cash provided from operating activities from 2017 to 2018 reflects a 14% increase in production and higher net realized prices (an increase of 6%) somewhat offset by higher operating costs. As of September 30, 2018, we have hedged more than 75% of our projected total production for the remainder of 2018, with more than 80% of our projected natural gas production hedged. Net cash provided from continuing operations is affected by working capital changes or the timing of cash receipts and disbursements. Changes in working capital (as reflected in our consolidated statements of cash flows) for first nine months 2018 were negative $20.3 million compared to negative $10.0 million for first nine months 2017.

Disposal of assets in first nine months 2018 includes $23.3 million of proceeds received from the sale of our Northern Oklahoma properties which closed in July 2018. In first nine months 2017, disposal of assets included $26.0 million of proceeds received from the sale of certain Western Oklahoma properties which closed in February 2017.

Liquidity and Capital Resources

Our main sources of liquidity and capital resources are internally generated cash flow from operating activities, a bank credit facility with uncommitted and committed availability, access to the debt and equity capital markets and asset sales. We must find new reserves and develop existing reserves to maintain and grow our production and cash flows. We accomplish this primarily through successful drilling programs which require substantial capital expenditures. We continue to take steps to ensure we have adequate capital resources and liquidity to fund our capital expenditure program. In first nine months 2018, we entered into additional commodity derivative contracts for 2018, 2019, 2020 and 2021 to protect future cash flows. Effective April 13, 2018, we entered into an amended and restated revolving bank credit facility, which expires in April 2023, with terms that were similar to our previous bank credit facility.

During first nine months 2018, our net cash provided from operating activities of $774.9 million and borrowings under our bank credit facility were used to fund approximately $833.2 million of capital expenditures (including acreage acquisitions). At September 30, 2018, we had $357,000 in cash and total assets of $11.9 billion.

Long-term debt at September 30, 2018 totaled $4.2 billion, including $1.3 billion outstanding on our bank credit facility, $2.9 billion of senior notes and $49.0 million of senior subordinated notes. Our available committed borrowing capacity at September 30, 2018 was $452.6 million, with an additional $1.0 billion in borrowing base capacity available for increased liquidity potential. Cash is required to fund capital expenditures necessary to offset inherent declines in production and reserves that are typical in the oil and natural gas industry. Future success in growing reserves and production will be highly dependent on capital resources available and the success of finding or acquiring additional reserves. We currently believe that net cash generated from operating activities, unused committed borrowing capacity under the bank credit facility and proceeds from asset sales combined with our natural gas, NGLs and oil derivatives contracts currently in place will be adequate to satisfy near-term financial obligations and liquidity needs. While our expectation is to operate within our internally generated cash flow, to the extent our capital requirements exceed our

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