Range Announces Second Quarter 2023 Results

Jul 24, 2023 at 4:30 PM EDT

FORT WORTH, Texas, July 24, 2023 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its second quarter 2023 financial results.

Second Quarter 2023 Highlights –

  • Cash flow from operating activities of $127 million
  • Cash flow from operations, before working capital changes, of $187 million
  • Capital spending was $175 million, approximately 30% of the 2023 budget
  • Production averaged 2.1 Bcfe per day, approximately 68% natural gas
  • Price realizations including hedges of $2.88 per mcfe – premium of $0.78 over NYMEX natural gas
  • NGL realizations of $21.51 per barrel – premium of $0.33 over Mont Belvieu equivalent
  • Natural gas differentials, including basis hedging, averaged ($0.47) per mcf to NYMEX
  • Repurchased $61.6 million face value of 2025 senior notes at a discount

Commenting on the quarter, Dennis Degner, the Company’s CEO said, “Second quarter results reflect the resilience and durability of Range’s business. Range’s competitive cost structure, low relative capital intensity, liquids optionality and thoughtful hedging allowed us to generate healthy full-cycle margins and maintain our trajectory towards our target capital structure, despite what we expect is a cyclical low in commodity prices. The Range team remains focused on efficiently developing our Marcellus assets to create value for shareholders into what we believe is an improving macro outlook for natural gas and natural gas liquids.”  

Financial Discussion

Except for generally accepted accounting principles (“GAAP”) reported amounts, specific expense categories exclude non-cash impairments, unrealized mark-to-market adjustment on derivatives, non-cash stock compensation and other items shown separately on the attached tables. “Unit costs” as used in this release are composed of direct operating, transportation, gathering, processing and compression, taxes other than income, general and administrative, interest and depletion, depreciation and amortization costs divided by production. See “Non-GAAP Financial Measures” for a definition of each of the non-GAAP financial measures and the tables that reconcile each of the non-GAAP measures to their most directly comparable GAAP financial measure.

Second Quarter 2023 Results

GAAP revenues for second quarter 2023 totaled $637 million, GAAP net cash provided from operating activities (including changes in working capital) was $127 million, and GAAP net income was $30 million ($0.12 per diluted share).  Second quarter earnings results include a $124 million mark-to-market derivative gain due to decreases in commodity prices.

Non-GAAP revenues for second quarter 2023 totaled $590 million, and cash flow from operations before changes in working capital, a non-GAAP measure, was $187 million.  Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $72 million ($0.30 per diluted share) in second quarter 2023.

The following table details Range’s second quarter 2023 unit costs per mcfe(a):

Expenses   2Q 2023
(per mcfe)
  2Q 2022
(per mcfe)
  Increase (Decrease)
             
Direct operating(a)   $ 0.13     $ 0.10     30%
Transportation, gathering,
processing and compression(a)
    1.42       1.70     (16%)
Taxes other than income     0.04       0.04     0%
General and administrative(a)     0.16       0.17     (6%)
Interest expense(a)     0.16       0.21     (24%)
Total cash unit costs(b)          1.90            2.22     (14%)
Depletion, depreciation and
amortization (DD&A)
    0.45       0.46     (2%)
Total unit costs plus DD&A(b)   $ 2.35     $ 2.68     (12%)

(a)   Excludes stock-based compensation, one-time settlements, and amortization of deferred financing costs.
(b)   Totals may not be exact due to rounding.

The following table details Range’s average production and realized pricing for second quarter 2023(a):

  2Q23 Production & Realized Pricing
    Natural Gas
(Mcf)
  Oil (Bbl)   NGLs
(Bbl)
  Natural Gas
Equivalent (Mcfe)
                 
Net production per day     1,422,158       7,234       102,532       2,080,752  
                 
Average NYMEX price   $ 2.10     $ 73.98     $ 21.18      
Differential, including basis hedging     (0.47 )     (9.71 )     0.33      
Realized prices before NYMEX hedges     1.63           64.27       21.51       2.40  
Settled NYMEX hedges     0.71       (1.73 )         —       0.48  
Average realized prices after hedges   $ 2.34     $ 62.54     $ 21.51     $ 2.88  

(a)   Totals may not be exact due to rounding

Second quarter 2023 natural gas, NGLs and oil price realizations (including the impact of cash-settled hedges and derivative settlements) averaged $2.88 per mcfe.

  • The average natural gas price, including the impact of basis hedging, was $1.63 per mcf, or a ($0.47) per mcf differential to NYMEX. The Company continues to expect an average 2023 natural gas differential versus NYMEX to be within a range of ($0.35) to ($0.45) per mcf.
     
  • Range’s pre-hedge NGL price during the quarter was $21.51 per barrel, approximately $0.33 above the Mont Belvieu weighted equivalent.
     
  • Crude oil and condensate price realizations, before realized hedges, averaged $64.27 per barrel, or $9.71 below WTI (West Texas Intermediate). Range continues to expect the 2023 condensate differential to average $9.00-$13.00 below WTI.

Capital Expenditures and Operational Activity

Second quarter 2023 drilling and completion expenditures were $166 million. In addition, during the quarter, approximately $9 million was invested in acreage leasehold, gathering systems and other. Second quarter capital spending represented approximately 30% of Range’s total capital budget in 2023.
  
The table below summarizes expected 2023 activity regarding the number of wells to sales in each area.   In aggregate, Range expects to turn to sales approximately 650,000 feet of lateral in 2023.

  Wells TIL
2Q 2023
  2023
Planned TIL
  Remaining
2023
SW PA Super-Rich 1   3   0
SW PA Wet 7   31   21
SW PA Dry 3   24   17
NE PA Dry 0   3   3
Total Wells 11   61   41


Financial Position and Buyback Activity

As of June 30, 2023, Range had net debt outstanding of approximately $1.63 billion, consisting of $1.79 billion of senior notes and $162 million in cash. During the second quarter, Range repurchased in the open market $61.6 million principal amount of the 4.875% senior notes due 2025 at a discount.

Guidance – 2023

Capital & Production Guidance

Range is targeting a maintenance program in 2023, resulting in approximately flat production at 2.12 – 2.16 Bcfe per day, with ~30% attributed to liquids production. Range’s 2023 all-in capital budget is $570 million - $615 million.

Updated Full Year 2023 Expense Guidance

Direct operating expense: $0.11 - $0.13 per mcfe
Transportation, gathering, processing and compression expense: $1.46 - $1.50 per mcfe
Taxes other than income: $0.04 - $0.05 per mcfe
Exploration expense: $22 - $28 million
G&A expense: $0.17 - $0.19 per mcfe
Interest expense: $0.14 - $0.16 per mcfe
DD&A expense: $0.46 - $0.48 per mcfe
Net brokered gas marketing expense: $0 - $5 million


2023 Price Guidance

Based on recent market indications, Range expects to average the following price differentials for its production.

FY 2023 Natural Gas:(1) NYMEX minus $0.35 to $0.45
FY 2023 Natural Gas Liquids:(2) MB minus $1.00 to +$1.00 per barrel
FY 2023 Oil/Condensate: WTI minus $9.00 to $13.00

(1) Including basis hedging
(2) Mont Belvieu-equivalent pricing based on weighting of 53% ethane, 27% propane, 8% normal butane, 4% iso-butane and 8% natural gasoline.

Hedging Status

Range hedges portions of its expected future production volumes to increase the predictability of cash flow and to help improve and maintain a strong, flexible financial position. Please see the detailed hedging schedule posted on the Range website under Investor Relations - Financial Information.

Range has also hedged Marcellus and other basis differentials for natural gas to limit volatility between benchmark and regional prices. The combined fair value of natural gas basis hedges as of June 30, 2023, was a net gain of $30.7 million.

Conference Call Information

A conference call to review the financial results is scheduled on Tuesday, July 25 at 8:00 AM Central Time (9:00 AM Eastern Time). Please click here to pre-register for the conference call and obtain a dial in number with passcode.

A simultaneous webcast of the call may be accessed at www.rangeresources.com. The webcast will be archived for replay on the Company's website until August 25th.

Non-GAAP Financial Measures

Adjusted net income comparable to analysts’ estimates as set forth in this release represents income or loss from operations before income taxes adjusted for certain non-cash items (detailed in the accompanying table) less income taxes. We believe adjusted net income comparable to analysts’ estimates is calculated on the same basis as analysts’ estimates and that many investors use this published research in making investment decisions and evaluating operational trends of the Company and its performance relative to other oil and gas producing companies. Diluted earnings per share (adjusted) as set forth in this release represents adjusted net income comparable to analysts’ estimates on a diluted per share basis. A table is included which reconciles income or loss from operations to adjusted net income comparable to analysts’ estimates and diluted earnings per share (adjusted). On its website, the Company provides additional comparative information on prior periods along with non-GAAP revenue disclosures.

Cash flow from operations before changes in working capital (sometimes referred to as “adjusted cash flow”) as defined in this release represents net cash provided by operations before changes in working capital and exploration expense adjusted for certain non-cash compensation items. Cash flow from operations before changes in working capital is widely accepted by the investment community as a financial indicator of an oil and gas company’s ability to generate cash to internally fund exploration and development activities and to service debt. Cash flow from operations before changes in working capital is also useful because it is widely used by professional research analysts in valuing, comparing, rating and providing investment recommendations of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Cash flow from operations before changes in working capital is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operations, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity. A table is included which reconciles net cash provided by operations to cash flow from operations before changes in working capital as used in this release. On its website, the Company provides additional comparative information on prior periods for cash flow, cash margins and non-GAAP earnings as used in this release.

The cash prices realized for oil and natural gas production, including the amounts realized on cash-settled derivatives and net of transportation, gathering, processing and compression expense, is a critical component in the Company’s performance tracked by investors and professional research analysts in valuing, comparing, rating and providing investment recommendations and forecasts of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Due to the GAAP disclosures of various derivative transactions and third-party transportation, gathering, processing and compression expense, such information is now reported in various lines of the income statement. The Company believes that it is important to furnish a table reflecting the details of the various components of each income statement line to better inform the reader of the details of each amount and provide a summary of the realized cash-settled amounts and third-party transportation, gathering, processing and compression expense, which were historically reported as natural gas, NGLs and oil sales. This information is intended to bridge the gap between various readers’ understanding and fully disclose the information needed.

The Company discloses in this release the detailed components of many of the single line items shown in the GAAP financial statements included in the Company’s Annual or Quarterly Reports on Form 10-K or 10-Q. The Company believes that it is important to furnish this detail of the various components comprising each line of the Statements of Operations to better inform the reader of the details of each amount, the changes between periods and the effect on its financial results.
  
We believe that the presentation of PV10 value of our proved reserves is a relevant and useful metric for our investors as supplemental disclosure to the standardized measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our proved reserves before taking into account future corporate income taxes and our current tax structure. While the standardized measure is dependent on the unique tax situation of each company, PV10 is based on prices and discount factors that are consistent for all companies. Because of this, PV10 can be used within the industry and by credit and security analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis.

RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading U.S. independent natural gas and NGL producer with operations focused in the Appalachian Basin. The Company is headquartered in Fort Worth, Texas.  More information about Range can be found at www.rangeresources.com.

Included within this release are certain “forward-looking statements” within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are not limited to historical facts, but reflect Range’s current beliefs, expectations or intentions regarding future events.  Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “outlook”, “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements.

All statements, except for statements of historical fact, made within regarding activities, events or developments the Company expects, believes or anticipates will or may occur in the future, such as those regarding future well costs, expected asset sales, well productivity, future liquidity and financial resilience, anticipated exports and related financial impact, NGL market supply and demand, future commodity fundamentals and pricing, future capital efficiencies, future shareholder value, emerging plays, capital spending, anticipated drilling and completion activity, acreage prospectivity, expected pipeline utilization and future guidance information, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and Range's future performance are subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements. Further information on risks and uncertainties is available in Range's filings with the Securities and Exchange Commission (SEC), including its most recent Annual Report on Form 10-K. Unless required by law, Range undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

The SEC permits oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions as well as the option to disclose probable and possible reserves. Range has elected not to disclose its probable and possible reserves in its filings with the SEC. Range uses certain broader terms such as "resource potential,” “unrisked resource potential,” "unproved resource potential" or "upside" or other descriptions of volumes of resources potentially recoverable through additional drilling or recovery techniques that may include probable and possible reserves as defined by the SEC's guidelines. Range has not attempted to distinguish probable and possible reserves from these broader classifications. The SEC’s rules prohibit us from including in filings with the SEC these broader classifications of reserves. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of actually being realized. Unproved resource potential refers to Range's internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques and have not been reviewed by independent engineers. Unproved resource potential does not constitute reserves within the meaning of the Society of Petroleum Engineer's Petroleum Resource Management System and does not include proved reserves. Area wide unproven resource potential has not been fully risked by Range's management. “EUR”, or estimated ultimate recovery, refers to our management’s estimates of hydrocarbon quantities that may be recovered from a well completed as a producer in the area. These quantities may not necessarily constitute or represent reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or the SEC’s oil and natural gas disclosure rules. Actual quantities that may be recovered from Range's interests could differ substantially. Factors affecting ultimate recovery include the scope of Range's drilling program, which will be directly affected by the availability of capital, drilling and production costs, commodity prices, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals, field spacing rules, recoveries of gas in place, length of horizontal laterals, actual drilling results, including geological and mechanical factors affecting recovery rates and other factors. Estimates of resource potential may change significantly as development of our resource plays provides additional data.

In addition, our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price or drilling cost changes. Investors are urged to consider closely the disclosure in our most recent Annual Report on Form 10-K, available from our website at www.rangeresources.com or by written request to 100 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102. You can also obtain this Form 10-K on the SEC’s website at www.sec.gov or by calling the SEC at 1-800-SEC-0330.

SOURCE: Range Resources Corporation

Range Investor Contact:

Laith Sando, Vice President – Investor Relations
817-869-4267
lsando@rangeresources.com

Range Media Contact:

Mark Windle, Director of Corporate Communications
724-873-3223
mwindle@rangeresources.com

                                               
RANGE RESOURCES CORPORATION
                                               
STATEMENTS OF OPERATIONS                                              
                                               
Based on GAAP reported earnings with additional                                              
details of items included in each line in Form 10-Q                                              
(Unaudited, in thousands, except per share data)                                              
                                               
  Three Months Ended June 30,   Six Months Ended June 30,
    2023       2022      %     2023       2022      %
                                               
Revenues and other income:                                              
Natural gas, NGLs and oil sales (a) $ 468,382     $ 1,356,892             $ 1,204,664     $ 2,389,243          
Derivative fair value income (loss)   123,734       (239,922 )             491,701       (1,178,979 )        
Brokered natural gas, marketing and other (b)   41,350       106,337               118,767       193,760          
Interest income (b)   1,780       30               2,737       41          
Other (b)   1,731       1,806               5,468       1,814          
Total revenues and other income   636,977       1,225,143       -48 %     1,823,337       1,405,879       30 %
                                               
Costs and expenses:                                              
Direct operating   23,470       19,688               50,039       39,627          
Direct operating – stock-based compensation (c)   426       362               841       711          
Transportation, gathering, processing and compression   268,190       320,407               553,673       618,194          
Transportation, gathering, processing and compression – settlements         7,500                     7,500          
Taxes other than income   6,993       8,053               14,887       15,132          
Brokered natural gas and marketing   44,340       109,423               110,747       202,027          
Brokered natural gas and marketing – stock-based compensation (c)   460       686               1,121       1,205          
Exploration   7,145       7,188               11,429       11,435          
Exploration – non-cash stock-based compensation (c)   303       318               623       770          
Abandonment and impairment of unproved properties   25,786       7,137               33,296       9,133          
General and administrative   30,363       32,434               63,785       62,907          
General and administrative – stock-based compensation (c)   8,415       10,270               18,015       21,843          
General and administrative – lawsuit settlements   748       204               872       695          
Exit costs   48,654       36,069               60,977       47,184          
Deferred compensation plan (d)   11,153       (19,221 )             20,549       54,122          
Interest expense   29,769       38,863               60,626       83,964          
Interest expense – amortization of deferred financing costs (e)   1,348       3,138               2,693       5,212          
(Gain) loss on early extinguishment of debt   (439 )     22               (439 )     69,232          
Depletion, depreciation and amortization   85,016       86,498               171,578       172,102          
Gain on sale of assets   (106 )     (82 )             (244 )     (413 )        
Total costs and expenses   592,034       668,957       -11 %     1,175,068       1,422,582       -17 %
                                               
Income (loss) before income taxes   44,943       556,186       -92 %     648,269       (16,703 )     3981 %
                                               
Income tax (benefit) expense:                                              
Current   (300 )     9,000               2,399       13,751          
Deferred   15,012       94,331               134,192       (26,501 )        
    14,712       103,331               136,591       (12,750 )        
                                               
Net income (loss) $ 30,231     $ 452,855       -93 %   $ 511,678     $ (3,953 )     13044 %
                                               
Net Income (Loss) Per Common Share:                                              
Basic $ 0.12     $ 1.81             $ 2.10     $ (0.02 )        
Diluted $ 0.12     $ 1.77             $ 2.07     $ (0.02 )        
                                               
Weighted average common shares outstanding, as reported:                                              
Basic   238,970       243,492       -2 %     238,497       244,416       -2 %
Diluted   241,105       248,650       -3 %     241,069       244,416       -1 %

 

  (a) See separate natural gas, NGLs and oil sales information table.
  (b) Included in Brokered natural gas, marketing and other revenues in the 10-Q.
  (c) Costs associated with stock compensation and restricted stock amortization, which have been reflected in the categories associated with the direct personnel costs, which are combined with the cash costs in the 10-Q.
  (d) Reflects the change in market value of the vested Company stock held in the deferred compensation plan.
  (e) Included in interest expense in the 10-Q.

 

               
RANGE RESOURCES CORPORATION
               
BALANCE SHEETS              
(In thousands)   June 30,       December 31,  
    2023       2022  
    (Unaudited)       (Audited)  
Assets              
Current assets $ 385,324     $ 538,662  
Derivative assets   256,668       41,915  
Natural gas and oil properties, successful efforts method   6,016,670       5,890,404  
Transportation and field assets   1,732       2,434  
Operating lease right-of-use assets   52,637       84,070  
Other   77,141       68,077  
  $ 6,790,172     $ 6,625,562  
               
Liabilities and Stockholders’ Equity              
Current liabilities $ 647,465     $ 864,678  
Asset retirement obligations   4,570       4,570  
Derivative liabilities         151,417  
               
Bank debt         9,509  
Senior notes   1,772,655       1,832,451  
               
Total debt   1,772,655       1,841,960  
               
Deferred tax liability   467,768       333,571  
Derivative liabilities   1,018       15,495  
Deferred compensation liabilities   64,633       99,907  
Operating lease liabilities   18,135       20,903  
Asset retirement obligations and other liabilities   114,629       112,981  
Divestiture contract obligation   311,692       304,074  
               
Common stock and retained earnings   3,826,424       3,305,198  
Other comprehensive income   485       467  
Common stock held in treasury   (439,302 )     (429,659 )
Total stockholders’ equity   3,387,607       2,876,006  
  $ 6,790,172     $ 6,625,562  

 

RECONCILIATION OF TOTAL REVENUES AND OTHER INCOME TO TOTAL REVENUE EXCLUDING CERTAIN ITEMS, a non-GAAP measure                            
(Unaudited, in thousands)                            
  Three Months Ended June 30,   Six Months Ended June 30,
    2023       2022       %       2023       2022       %  
                                               
Total revenues and other income, as reported $ 636,977     $ 1,225,143       -48 %   $ 1,823,337     $ 1,405,879       30 %
Adjustment for certain special items:                                              
Total change in fair value related to derivatives prior to settlement (gain) loss   (47,148 )     (167,788 )             (380,647 )     638,134          
Total revenues, as adjusted, non-GAAP $ 589,829     $ 1,057,355       -44 %   $ 1,442,690     $ 2,044,013       -29 %

 

                               
RANGE RESOURCES CORPORATION
                               
CASH FLOWS FROM OPERATING ACTIVITIES                              
(Unaudited, in thousands)                              
                               
  Three Months Ended June 30,     Six Months Ended June 30,  
    2023       2022       2023       2022  
                               
Net income (loss) $ 30,231     $ 452,855     $ 511,678     $ (3,953 )
Adjustments to reconcile net cash provided from continuing operations:                              
Deferred income tax expense (benefit)   15,012       94,331       134,192       (26,501 )
Depletion, depreciation, amortization and impairment   85,016       86,498       171,578       172,102  
Abandonment and impairment of unproved properties   25,786       7,137       33,296       9,133  
Derivative fair value (income) loss   (123,734 )     239,922       (491,701 )     1,178,979  
Cash settlements on derivative financial instruments   76,586       (407,710 )     111,054       (540,845 )
Divestiture contract obligation   48,559       35,907       60,774       46,861  
Amortization of deferred issuance costs and other   1,284       3,155       2,594       5,120  
Deferred and stock-based compensation   20,722       (7,958 )     41,403       78,155  
Gain on sale of assets and other   (106 )     (82 )     (244 )     (413 )
(Gain) loss on early extinguishment of debt   (439 )     22       (439 )     69,232  
                               
Changes in working capital:                              
Accounts receivable   92,768       (165,872 )     317,981       (107,198 )
Other current assets   2,337       (17,191 )     (2,998 )     (23,099 )
Accounts payable   (65,321 )     (15,622 )     (76,143 )     36,374  
Accrued liabilities and other   (82,111 )     19,314       (211,479 )     (162,827 )
Net changes in working capital   (52,327 )     (179,371 )     27,361       (256,750 )
Net cash provided from operating activities $ 126,590     $ 324,706     $ 601,546     $ 731,120  
                               
                               
                               
RECONCILIATION OF NET CASH PROVIDED FROM OPERATING ACTIVITIES, AS REPORTED, TO CASH FLOW FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL, a non-GAAP measure                              
(Unaudited, in thousands)                              
                               
  Three Months Ended June 30,     Six Months Ended June 30,  
    2023       2022       2023       2022  
Net cash provided from operating activities, as reported $ 126,590     $ 324,706     $ 601,546     $ 731,120  
Net changes in working capital   52,327       179,371       (27,361 )     256,750  
Exploration expense   7,145       7,188       11,429       11,435  
Lawsuit settlements   748       204       872       695  
Transportation, gathering, processing and compression settlements         7,500             7,500  
Non-cash compensation adjustment and other   194       518       48       911  
Cash flow from operations before changes in working capital – non-GAAP measure $ 187,004     $ 519,487     $ 586,534     $ 1,008,411  
                               
                               
                               
ADJUSTED WEIGHTED AVERAGE SHARES OUTSTANDING                              
(Unaudited, in thousands)                              
                               
  Three Months Ended June 30,     Six Months Ended June 30,  
    2023       2022       2023       2022  
Basic:                              
Weighted average shares outstanding   244,414       250,151       244,043       250,853  
Stock held by deferred compensation plan   (5,444 )     (6,659 )     (5,546 )     (6,437 )
Adjusted basic   238,970       243,492       238,497       244,416  
                               
Dilutive:                              
Weighted average shares outstanding   244,414       250,151       244,043       250,853  
Dilutive stock options under treasury method   (3,309 )     (1,501 )     (2,974 )     (6,437 )
Adjusted dilutive   241,105       248,650       241,069       244,416  

 

           
RANGE RESOURCES CORPORATION
           
RECONCILIATION OF NATURAL GAS, NGLs AND OIL SALES AND DERIVATIVE FAIR VALUE INCOME (LOSS) TO CALCULATED CASH REALIZED NATURAL GAS, NGLs AND OIL PRICES WITH AND WITHOUT THIRD PARTY TRANSPORTATION, GATHERING AND COMPRESSION FEES, a non-GAAP measure          
(Unaudited, in thousands, except per unit data)          
  Three Months Ended June 30,   Six Months Ended June 30,
    2023       2022       %       2023       2022       %  
Natural gas, NGL and oil sales components:                                              
Natural gas sales $ 225,359     $ 909,754             $ 666,939     $ 1,539,677          
NGL sales   200,717       374,699               457,157       713,068          
Oil sales   42,306       72,439               80,568       136,498          
Total oil and gas sales, as reported $ 468,382     $ 1,356,892       -65 %   $ 1,204,664     $ 2,389,243       -50 %
                                               
Derivative fair value income (loss), as reported: $ 123,734     $ (239,922 )           $ 491,701     $ (1,178,979 )        
Cash settlements on derivative financial instruments – (gain) loss:                                              
Natural gas   (77,725 )     367,347               (114,375 )     466,805          
NGLs         10,505                     22,823          
Crude Oil   1,139       29,858               3,321       51,217          
Total change in fair value related to commodity derivatives prior to settlement, a non-GAAP measure $ 47,148     $ 167,788             $ 380,647     $ (638,134 )        
                                               
Transportation, gathering, processing and compression components:                                              
Natural gas $ 142,121     $ 176,788             $ 294,710     $ 337,224          
NGLs   125,815       151,119               258,527       288,459          
Oil   254                     436       11          
Total transportation, gathering, processing and compression, as reported $ 268,190     $ 327,907             $ 553,673     $ 625,694          
                                               
Natural gas, NGL and oil sales, including cash-settled derivatives: (c)                                              
Natural gas sales $ 303,084     $ 542,407             $ 781,314     $ 1,072,872          
NGL sales   200,717       364,194               457,157       690,245          
Oil sales   41,167       42,581               77,247       85,281          
Total $ 544,968     $ 949,182       -43 %     1,315,718       1,848,398       -29 %
                                               
Production of oil and gas during the periods (a):                                              
Natural gas (mcf)   129,416,394       131,721,014       -2 %     263,062,458       262,971,351       0 %
NGL (bbl)   9,330,430       8,784,851       6 %     18,620,169       17,238,296       8 %
Oil (bbl)   658,249       716,168       -8 %     1,231,285       1,446,630       -15 %
Gas equivalent (mcfe) (b)   189,348,468       188,727,128       0 %     382,171,182       375,080,907       2 %
                                               
Production of oil and gas – average per day (a):                                              
Natural gas (mcf)   1,422,158       1,447,484       -2 %     1,453,384       1,452,880       0 %
NGL (bbl)   102,532       96,537       6 %     102,874       95,239       8 %
Oil (bbl)   7,234       7,870       -8 %     6,803       7,992       -15 %
Gas equivalent (mcfe) (b)   2,080,752       2,073,924       0 %     2,111,443       2,072,270       2 %
                                               
Average prices, excluding derivative settlements and before third party transportation costs:                                              
Natural gas (mcf) $ 1.74     $ 6.91       -75 %   $ 2.54     $ 5.85       -57 %
NGL (bbl) $ 21.51     $ 42.65       -50 %   $ 24.55     $ 41.37       -41 %
Oil (bbl) $ 64.27     $ 101.15       -36 %   $ 65.43     $ 94.36       -31 %
Gas equivalent (mcfe) (b) $ 2.47     $ 7.19       -66 %   $ 3.15     $ 6.37       -51 %
                                               
Average prices, including derivative settlements before third party transportation costs: (c)                                              
Natural gas (mcf) $ 2.34     $ 4.12       -43 %   $ 2.97     $ 4.08       -27 %
NGL (bbl) $ 21.51     $ 41.46       -48 %   $ 24.55     $ 40.04       -39 %
Oil (bbl) $ 62.54     $ 59.46       5 %   $ 62.74     $ 58.95       6 %
Gas equivalent (mcfe) (b) $ 2.88     $ 5.03       -43 %   $ 3.44     $ 4.93       -30 %
                                               
Average prices, including derivative settlements and after third party transportation costs: (d)                                              
Natural gas (mcf) $ 1.24     $ 2.78       -55 %   $ 1.85     $ 2.80       -34 %
NGL (bbl) $ 8.03     $ 24.25       -67 %   $ 10.67     $ 23.31       -54 %
Oil (bbl) $ 62.14     $ 59.46       5 %   $ 62.37     $ 58.94       6 %
Gas equivalent (mcfe) (b) $ 1.46     $ 3.29       -56 %   $ 1.99     $ 3.26       -39 %
                                               
Transportation, gathering and compression expense per mcfe $ 1.42     $ 1.74       -18 %   $ 1.45     $ 1.67       -13 %

 

  (a) Represents volumes sold regardless of when produced.
  (b) Oil and NGLs are converted at the rate of one barrel equals six mcfe based upon the approximate relative energy content of oil to natural gas, which is not necessarily indicative of the relationship of oil and natural gas prices.
  (c) Excluding third party transportation, gathering and compression costs.
  (d) Net of transportation, gathering and compression costs.

 

           
RANGE RESOURCES CORPORATION
           
RECONCILIATION OF INCOME BEFORE INCOME TAXES AS REPORTED TO INCOME BEFORE INCOME TAXES EXCLUDING CERTAIN ITEMS, a non-GAAP measure          
(Unaudited, in thousands, except per share data)          
  Three Months Ended June 30,   Six Months Ended June 30,
    2023       2022       %       2023       2022       %  
                                               
Income (loss) from operations before income taxes, as reported $ 44,943     $ 556,186       -92 %   $ 648,269     $ (16,703 )     3981 %
Adjustment for certain special items:                                              
Gain on sale of assets   (106 )     (82 )             (244 )     (413 )        
Change in fair value related to derivatives prior to settlement   (47,148 )     (167,788 )             (380,647 )     638,134          
Abandonment and impairment of unproved properties   25,786       7,137               33,296       9,133          
(Gain) loss on early extinguishment of debt   (439 )     22               (439 )     69,232          
Transportation, gathering, processing and compression settlements         7,500                     7,500          
Lawsuit settlements   748       204               872       695          
Exit costs   48,654       36,069               60,977       47,184          
Brokered natural gas and marketing – non-cash stock-based compensation   460       686               1,121       1,205          
Direct operating – non-cash stock-based compensation   426       362               841       711          
Exploration expenses – non-cash stock-based compensation   303       318               623       770          
General & administrative – non-cash stock-based compensation   8,415       10,270               18,015       21,843          
Deferred compensation plan – non-cash adjustment   11,153       (19,221 )             20,549       54,122          
                                               
Income before income taxes, as adjusted   93,195       431,663       -78 %     403,233       833,413       -52 %
                                               
Income tax (benefit) expense, as adjusted                                              
Current   (300 )     9,000               2,399       13,751          
Deferred (a)   21,735       107,916               90,345       208,353          
                                               
Net income excluding certain items, a non-GAAP measure $ 71,760     $ 314,747       -77 %   $ 310,489     $ 611,309       -49 %
                                               
Non-GAAP income per common share                                              
Basic $ 0.30     $ 1.29       -77 %   $ 1.30     $ 2.50       -48 %
Diluted $ 0.30     $ 1.27       -76 %   $ 1.29     $ 2.45       -47 %
                                               
Non-GAAP diluted shares outstanding, if dilutive   241,105       248,650               241,069       249,945          
                                               

 

  (a) Taxes are estimated to be approximately 23% for 2023 and deferred taxes were estimated to be 25% for 2022.

 

                               
RANGE RESOURCES CORPORATION
                               
RECONCILIATION OF NET INCOME (LOSS), EXCLUDING CERTAIN ITEMS AND ADJUSTMENT EARNINGS PER SHARE, non-GAAP measures                              
(In thousands, except per share data)                              
  Three Months Ended
June 30,
    Six Months Ended
        June 30,
 
    2023       2022       2023       2022  
                               
Net income (loss), as reported $ 30,231     $ 452,855     $ 511,678     $ (3,953 )
Adjustment for certain special items:                              
Gain on sale of assets   (106 )     (82 )     (244 )     (413 )
(Gain) loss on early extinguishment of debt   (439 )     22       (439 )     69,232  
Change in fair value related to derivatives prior to settlement   (47,148 )     (167,788 )     (380,647 )     638,134  
Transportation, gathering, processing and compression settlements         7,500             7,500  
Abandonment and impairment of unproved properties   25,786       7,137       33,296       9,133  
Lawsuit settlements   748       204       872       695  
Exit costs   48,654       36,069       60,977       47,184  
Non-cash stock-based compensation   9,604       11,636       20,600       24,529  
Deferred compensation plan   11,153       (19,221 )     20,549       54,122  
Tax impact   (6,723 )     (13,585 )     43,847       (234,854 )
                               
Net income excluding certain items, a non-GAAP measure $ 71,760     $ 314,747     $ 310,489     $ 611,309  
                               
Net income (loss) per diluted share, as reported $ 0.12     $ 1.77     $ 2.07     $ (0.02 )
Adjustment for certain special items per diluted share:                              
Gain on sale of assets   (0.00 )     (0.00 )     (0.00 )     (0.00 )
(Gain) loss on early extinguishment of debt   (0.00 )     0.00       (0.00 )     0.28  
Change in fair value related to derivatives prior to settlement   (0.20 )     (0.67 )     (1.58 )     2.55  
Transportation, gathering, processing and compression settlements         0.03             0.03  
Abandonment and impairment of unproved properties   0.11       0.03       0.14       0.04  
Lawsuit settlements   0.00       0.00       0.00       0.00  
Exit costs   0.20       0.15       0.25       0.19  
Non-cash stock-based compensation   0.04       0.05       0.09       0.10  
Deferred compensation plan   0.05       (0.08 )     0.09       0.22  
Adjustment for rounding differences   0.01       (0.01 )     0.01        
Tax impact   (0.03 )     (0.05 )     0.18       (0.94 )
Dilutive share impact (rabbi trust and other)         0.05       0.04        
                               
Net income per diluted share, excluding certain items, a non-GAAP measure $ 0.30     $ 1.27     $ 1.29     $ 2.45  
                               
Adjusted earnings per share, a non-GAAP measure:                              
Basic $ 0.30     $ 1.29     $ 1.30     $ 2.50  
Diluted $ 0.30     $ 1.27     $ 1.29     $ 2.45  

 

                               
RANGE RESOURCES CORPORATION
                               
RECONCILIATION OF CASH MARGIN PER MCFE, a non-GAAP measure                              
(Unaudited, in thousands, except per unit data)                              
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2023       2022       2023       2022  
                               
Revenues                              
Natural gas, NGL and oil sales, as reported $ 468,382     $ 1,356,892     $ 1,204,664     $ 2,389,243  
Derivative fair value income (loss), as reported   123,734       (239,922 )     491,701       (1,178,979 )
Less non-cash fair value (gain) loss   (47,148 )     (167,788 )     (380,647 )     638,134  
Brokered natural gas and marketing and other, as reported   44,861       108,173       126,972       195,615  
Less ARO settlement and other (gains) losses   (3,511 )     (1,836 )     (8,205 )     (1,855 )
Cash revenue applicable to production   586,318       1,055,519       1,434,485       2,042,158  
                               
Expenses                              
Direct operating, as reported   23,896       20,050       50,880       40,338  
Less direct operating stock-based compensation   (426 )     (362 )     (841 )     (711 )
Transportation, gathering and compression, as reported   268,190       327,907       553,673       625,694  
Less transportation, gathering and compression settlements         (7,500 )           (7,500 )
Taxes other than income, as reported   6,993       8,053       14,887       15,132  
Brokered natural gas and marketing, as reported   44,800       110,109       111,868       203,232  
Less brokered natural gas and marketing stock-based compensation   (460 )     (686 )     (1,121 )     (1,205 )
General and administrative, as reported   39,526       42,908       82,672       85,445  
Less G&A stock-based compensation   (8,415 )     (10,270 )     (18,015 )     (21,843 )
Less lawsuit settlements   (748 )     (204 )     (872 )     (695 )
Interest expense, as reported   31,117       42,001       63,319       89,176  
Less amortization of deferred financing costs   (1,348 )     (3,138 )     (2,693 )     (5,212 )
Cash expenses   403,125       528,868       853,757       1,021,851  
                               
Cash margin, a non-GAAP measure $ 183,193     $ 526,651     $ 580,728     $ 1,020,307  
                               
Mmcfe produced during period   189,348       188,727       382,171       375,681  
                               
Cash margin per mcfe $ 0.97     $ 2.79     $ 1.52     $ 2.72  
                               
                               
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO CASH MARGIN                              
(Unaudited, in thousands, except per unit data)                              
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2023       2022       2023       2022  
                               
Income (loss) before income taxes, as reported $ 44,943     $ 556,186     $ 648,269     $ (16,703 )
Adjustments to reconcile (loss) income before income taxes to cash margin:                              
ARO settlements and other gains   (3,511 )     (1,836 )     (8,205 )     (1,855 )
Derivative fair value (income) loss   (123,734 )     239,922       (491,701 )     1,178,979  
Net cash receipts (payments) on derivative settlements   76,586       (407,710 )     111,054       (540,845 )
Transportation, gathering and compression settlements         7,500             7,500  
Exploration expense   7,145       7,188       11,429       11,435  
Lawsuit settlements   748       204       872       695  
Exit costs   48,654       36,069       60,977       47,184  
Deferred compensation plan   11,153       (19,221 )     20,549       54,122  
Stock-based compensation (direct operating, brokered natural gas and marketing, general and administrative and termination costs)   9,604       11,636       20,600       24,529  
Interest – amortization of deferred financing costs   1,348       3,138       2,693       5,212  
Depletion, depreciation and amortization   85,016       86,498       171,578       172,102  
Gain on sale of assets   (106 )     (82 )     (244 )     (413 )
(Gain) loss on early extinguishment of debt   (439 )     22       (439 )     69,232  
Abandonment and impairment of unproved properties   25,786       7,137       33,296       9,133  
Cash margin, a non-GAAP measure $ 183,193     $ 526,651     $ 580,728     $ 1,020,307  
                               

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Source: Range Resources Corporation