UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
July 23, 2009 (July 22, 2009)
July 23, 2009 (July 22, 2009)
RANGE RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-12209 | 34-1312571 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 100 Throckmorton, Suite 1200 Ft. Worth, Texas |
76102 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (817) 870-2601
(Former name or former address, if changed since last report): Not applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligations of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 Results of Operations and Financial Condition
On July 22, 2009 Range Resources Corporation issued a press release announcing its second
quarter 2009 results. A copy of this press release is being furnished as an exhibit to this report
on Form 8-K.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits:
99.1 Press Release dated July 22, 2009
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RANGE RESOURCES CORPORATION |
||||
| By: | /s/ Roger S. Manny | |||
| Roger S. Manny | ||||
| Chief Financial Officer | ||||
Date: July 22, 2009
3
EXHIBIT INDEX
| Exhibit Number | Description | |
99.1
|
Press Release dated July 22, 2009 |
4
Exhibit 99.1
NEWS RELEASE
RANGE ANNOUNCES SECOND QUARTER RESULTS
FORT WORTH, TEXAS, JULY 22, 2009...RANGE RESOURCES CORPORATION (NYSE: RRC) today announced second
quarter results. Production averaged 434 Mmcfe per day, representing another record high for the
Company and a 14% increase over the prior-year quarter. This represents the 26th
consecutive quarter of sequential production growth. Currently, the Company is running 14 rigs
versus 30 rigs at this time last year. While production increased 14%, realized prices fell 32%.
Oil and gas prices, after adjustment for hedging, averaged $6.18 per mcfe, versus $9.03 per mcfe in
the prior-year quarter. This compares to price realizations of $6.62 per mcfe for the first
quarter of 2009. As a result, oil and gas sales (including cash-settled derivatives) declined 22%
to $244 million. Cash flow from operations before changes in working capital, a non-GAAP measure,
declined 29% to $156 million. Range reported a loss for the quarter of $40 million, down 23% from
the prior year. Diluted earnings per share declined 18% to ($0.26) per share compared to ($0.22)
per share in the prior year. Adjusting for certain non-cash items, net income comparable to
analysts’ estimates would have been $34 million compared to $78 million in the second quarter of
2008. The diluted earnings per share using these analyst adjusted numbers would have been $0.21 in
the second quarter of 2009. Adjusted earnings and cash flow both exceeded the average analysts’
estimates. (See the accompanying tables reconciling these non-GAAP measures.)
Commenting on the announcement, John Pinkerton, Range’s Chairman and CEO, said, “While our
financial results reflect the decline in oil and gas prices, our operating results were
outstanding, reflecting excellent second quarter drilling results. On the cost side of our
business, unit operating costs continued to decline, and we are experiencing significant decreases
in service costs. For the balance of the year, approximately 80% of our natural gas production is
hedged at an average floor price of $7.49 per mcf, providing significant cash flow protection. In
addition, we have recently added to our hedge position for 2010. Given our excellent portfolio of
drilling opportunities driven by the Marcellus, Nora and the Barnett, coupled with our low cost
structure and shallow decline property base, we are well positioned to continue our strategy of
consistently growing production and reserves at low costs. Our core drilling projects are driving
capital efficiency, allowing us to do more with less. In particular, given the progress we have
made so far in 2009, we anticipate exiting 2009 at the higher end of the Marcellus production
target rate of 80 — 100 Mmcfe per day net and doubling the production exit rate in 2010. As the
Marcellus ramps up, we look for our capital efficiency to continue to strengthen.”
Financial Discussion —
(Excludes non-cash mark-to-market and non-cash stock-based compensation items shown separately on
attached tables.)
For the quarter, production averaged 434 Mmcfe per day, comprised of 351 Mmcf per day of gas and
13,816 barrels per day of oil and natural gas liquids. Wellhead prices, including cash-settled
derivatives, averaged $6.18 per mcfe, a 32% decrease over the prior-year period. The average gas
price was $5.85 per mcf, a 31% decrease, and the average oil price decreased 16% to $60.88 a
barrel.
Direct operating expenses for the quarter were $0.86 per mcfe, an 18% decrease versus the
prior-year quarter of $1.05 and an 8% decrease compared to $0.93 in the first quarter of 2009.
Production taxes were $0.19 per mcfe, a 59% decline versus the prior-year quarter of $0.46 per mcfe
due to lower commodity prices and a 14% decrease compared to $0.22 per mcfe in the first quarter
2009. Exploration
expense in the second quarter totaled $10 million, down 43% from $18 million in the prior year due
primarily to lower seismic and dry hole costs. General and administrative expenses were $0.51 per
mcfe, an increase of $0.02 per mcfe from the prior-year quarter primarily due to higher personnel
5
costs associated with the Marcellus Shale play, and $0.01 per mcfe higher than first quarter 2009.
Interest expense rose to $30 million compared to $24 million in the prior-year quarter, due to
higher debt balances and the terming out of an additional $300 million of 10-year high yield notes
at 8% during the quarter. Interest expense was $0.75 per mcfe as compared to $0.69 per mcfe for
the prior-year quarter and $0.71 per mcfe for the first quarter 2009. Depreciation, depletion and
amortization rose to $2.25 per mcfe, versus $2.08 per mcfe in the prior-year quarter, but remained
level with first quarter 2009. As previously announced, Range has elected not to renew certain
leases, primarily those outside the core of our North Texas Barnett Shale play, given current low
commodity prices. The second quarter abandonment and impairment expense was $41 million compared
to $3 million in the comparable period of the prior year.
Second quarter development expenditures totaled $110 million, funding the drilling of 145 (95.8
net) wells and 6 (5.9 net) recompletions. A 100% success rate was achieved. For the first six
months of 2009, 161 (102.9 net) wells have been successfully drilled and are now on production,
while 84 (55.9 net) wells are currently in various stages of completion or waiting on pipeline
connection. Total capital expenditures for the second quarter, including all drilling, acreage,
seismic and infrastructure costs aggregated $165 million. Excluding $16 million of Marcellus Shale
acreage that was acquired in exchange for Range common stock, cash capital expenditures totaled
$149 million. Second quarter cash flow of $156 million was more than sufficient to fund all of the
cash capital expenditures for the quarter. For the year, cash flow and the proceeds from already
completed asset sales are expected to fully fund capital expenditures. Range has hedged additional
natural gas volumes for 2010. The current hedge position is 47% of the expected gas production for
the first half of 2010 at a weighted average collar of a $5.50 floor and a $7.44 cap and 24% of
expected production for the second half of 2010 at a weighted average collar of a $5.50 floor and a
$7.50 cap.
Operational Discussion —
During the second quarter, the Marcellus Shale division continued to make excellent progress.
Marcellus Shale production is on plan and now exceeds 50 Mmcfe per day net and is expected to
approach the higher end of the previously announced target of 80 — 100 Mmcfe per day net by year
end. From inception, Range has drilled and completed 46 horizontal Marcellus Shale wells, of which
41 are on production. Range currently estimates that of these, 24 wells (those with at least 120
days of production history) have an average gross ultimate recovery of 4.4 Bcfe. Range has posted
on its website a zero time plot production curve based on the production to date from these 24
wells. (Such information is not a projection across all of our acreage nor is it a forecast of
future well results.) Our current average cost to drill and complete in southwest Pennsylvania
from a multi-well pad site is approximately $3.5 million per well, resulting in estimated finding
and development costs of less than $1.00 per mcfe net. Range plans to drill approximately 70
horizontal wells in the Marcellus Shale play in 2009 with approximately 50 expected to be completed
prior to year end. The Marcellus division currently has three horizontal rigs operating, which is
scheduled to increase to six rigs by year end. The build out of the Marcellus midstream
infrastructure in southwest Pennsylvania is progressing as scheduled. By December 2009 or January
2010, gross processing capacity should be expanded to 200 Mmcf per day. An additional 120 Mmcf per
day of processing capacity has been ordered for start-up in early 2011, which is expected to
increase gross processing capacity to more than 300 Mmcf per day.
The Southwest division also delivered strong drilling results in the second quarter. For the
quarter, Barnett production averaged 120 Mmcfe per day net. The division recently tested seven
wells in Denton
County for a combined rate of 17 Mmcfe per day. These wells are expected to be online by the end
of the month. We also completed two wells in northeast Parker County, one of which recently came
online at 7.6 Mmcfe per day and may be the best well to date in that county. Plans are to complete
the 2009
6
drilling program in the Barnett with a two-rig program. Activity will continue to focus
in the core of our acreage where we have achieved excellent results and expect finding and
development costs to approximate $1.25 per mcfe for the second half of the year.
During the second quarter 2009, Range’s Appalachian division continued to focus on its key coal bed
methane, shale and tight gas sand drilling projects in the Nora area of Virginia. During the
quarter, Range drilled three horizontal Huron Shale wells and one horizontal Big Lime well.
Year-to-date, 11 horizontal wells have been completed in the Huron Shale, and two horizontal wells
have been completed in the Berea. We also completed the first horizontal well in Virginia in the
Big Lime formation at 3,500 feet. For the horizontal wells that are currently on production, the
initial production rates have averaged 1.0 Mmcf per day. In addition, during the second quarter
of 2009, 61 coal bed methane and 19 vertical tight gas sand wells were drilled in the Nora field.
The Midcontinent Division expanded several key areas during the first half of 2009 to reach a new
record net production rate of 57 Mmcfe per day. In the second quarter, a total of 10 (7.0 net)
wells were drilled at a 100% success rate. For the St. Louis Lime play in the Texas Panhandle, 2
(0.8 net) wells were completed during the quarter with combined production rates of 3.6 (1.3 net)
Mmcfe per day. A third well has been logged and is waiting on completion. A six-mile pipeline,
expected to be completed in August, will allow further development of the field and expansion of
the St. Louis play.
Conference Call Information
The Company will host a conference call on Thursday, July 23 at 1:00 p.m. ET to review these
results. To participate in the call, please dial 877-407-0778 and ask for the Range Resources
second quarter financial results conference call. A replay of the call will be available through
June 30 at 877-660-6853. The account number is 286 and the conference ID for the replay is 328371.
Additional financial and statistical information about the period not included in this release but
to be presented in the conference call will be available on our home page at
www.rangeresources.com.
A
simultaneous webcast of the call may be accessed over the Internet at
www.rangeresources.com or
www.vcall.com. To listen, please go to either website in time to register and install any
necessary software. The webcast will be archived for replay on the Company’s website for 15 days.
Non-GAAP Financial Measures and Supplemental Tables:
Second quarter 2009 results included several non-cash items: a $61 million non-cash mark-to-market
gain on unrealized derivatives, a $41 million impairment of unproved properties, a $3 million
impairment of equity ventures, a $1 million expense recorded for the mark-to-market in the deferred
compensation plan and $11 million of non-cash stock compensation expense. Excluding these items,
net income would have been $34 million or $0.22 per share ($0.21 fully diluted). This compares
favorably to analysts’ estimates of $0.18 per share. Excluding similar non-cash items from the
prior-year quarter, net income would have been $78 million or $0.52 per share ($0.50 fully
diluted). By excluding these non-cash items from our earnings, we believe we present our
earnings in a manner consistent with the presentation used by analysts in their projection of the
Company’s earnings. (See accompanying table for calculation of these non-GAAP measures.)
In this news release, Range has reclassified within total revenues its financial reporting of the
cash settlement of its commodity derivatives. Under this presentation those hedges considered
“effective”
7
under SFAS No. 133 (Appalachia oil and gas hedges and Southwest oil hedges) are
included in “Oil and gas sales” when settled. For those hedges designated to regions where the
historical correlation between NYMEX and regional prices is “non-highly effective” (Southwest gas)
or is “volumetric ineffective” due to sale of the underlying reserves (Southwest oil), they are
deemed to be “derivatives” and the cash settlements are included in a separate line item shown as
“Derivative fair value income (loss)” in Form 10-Q along with the change in mark-to-market
valuations of such unrealized derivatives. The Company has provided additional information
regarding oil and gas sales in a supplemental table included with this release, which would
correspond to amounts shown by analysts for oil and gas sales realized, including cash-settled
derivatives.
“Cash flow from operations before changes in working capital” 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.
RANGE RESOURCES CORPORATION (NYSE: RRC) is an independent oil and gas company operating in the
Southwestern, Appalachian and Gulf Coast regions of the United States.
Except for historical information, statements made in this release, including those relating to
estimated reserves, significant potential, future or expected earnings, rates of return, expected
debt reduction, asset sales, cash flow, capital expenditures, production growth, processing
capacity or planned number of wells are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements are based on assumptions and estimates that management believes are reasonable based on
currently available information; however, management’s assumptions and the Company’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, including, but
not limited to, the volatility of oil and gas prices, the results of our hedging transactions, the
costs and results of drilling and operations, the timing of production, mechanical and other
inherent risks associated with oil and gas production, weather, the availability of drilling
equipment, changes in interest rates, litigation, uncertainties about reserve estimates and
environmental risks. The Company undertakes no obligation to publicly update or revise any
forward-looking statements. Further information on risks and uncertainties is available in the
Company’s filings with the Securities and Exchange Commission, which are incorporated by reference.
2009-21
Contacts:
|
Rodney Waller, Sr. Vice President | 817-869-4258 | ||
| David Amend, Investor Relations Manager | 817-869-4266 |
Karen Giles, Corporate Communications Manager 817-869-4238
| Main number: | 817-870-2601 | |||
| www.rangeresources.com |
8
RANGE RESOURCES CORPORATION
STATEMENTS OF INCOME
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)
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, | |||||||||||||||||||||||
| 2009 | 2008 (a) | 2009 | 2008 (a) | |||||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Oil and gas sales (b) |
$ | 192,523 | $ | 347,622 | $ | 395,712 | $ | 655,006 | ||||||||||||||||
Cash-settled derivative gain (b)(d) |
51,383 | (34,962 | ) | 95,858 | (20,259 | ) | ||||||||||||||||||
Transportation and gathering |
2,339 | 1,335 | 2,110 | 2,591 | ||||||||||||||||||||
Transportation and gathering — non-cash stock
compensation (c) |
(187 | ) | (111 | ) | (463 | ) | (238 | ) | ||||||||||||||||
Change in mark-to-market on unrealized
derivatives (d) |
(61,595 | ) | (162,280 | ) | (30,070 | ) | (297,501 | ) | ||||||||||||||||
Ineffective hedging gain (loss) (d) |
356 | 558 | (97 | ) | (2,691 | ) | ||||||||||||||||||
Gain (loss) on sale of properties (e) |
(29 | ) | (633 | ) | 7 | 20,047 | ||||||||||||||||||
Other (e) |
(4,358 | ) | 274 | (6,188 | ) | 186 | ||||||||||||||||||
| 180,432 | 151,803 | 19 | % | 456,869 | 357,141 | 28 | % | |||||||||||||||||
Expenses |
||||||||||||||||||||||||
Direct operating |
33,998 | 36,517 | 68,810 | 68,889 | ||||||||||||||||||||
Direct operating — non-cash stock compensation (c) |
830 | 711 | 1,559 | 1,289 | ||||||||||||||||||||
Production and ad valorem taxes |
7,564 | 16,056 | 15,821 | 29,896 | ||||||||||||||||||||
Exploration |
10,475 | 18,443 | 22,753 | 33,947 | ||||||||||||||||||||
Exploration — non-cash stock compensation (c) |
893 | 1,019 | 1,954 | 2,108 | ||||||||||||||||||||
Abandonment and impairment of unproven properties |
40,954 | 3,474 | 60,526 | 5,598 | ||||||||||||||||||||
General and administrative |
20,168 | 16,973 | 38,853 | 29,774 | ||||||||||||||||||||
General and administrative — non-cash stock
compensation (c) |
8,935 | 6,965 | 15,160 | 11,576 | ||||||||||||||||||||
Deferred compensation plan (f) |
756 | 7,539 | 13,190 | 28,150 | ||||||||||||||||||||
Interest |
29,555 | 23,842 | 56,184 | 46,988 | ||||||||||||||||||||
Depletion, depreciation and amortization |
88,713 | 72,115 | 173,033 | 142,248 | ||||||||||||||||||||
| 242,841 | 203,654 | 19 | % | 467,843 | 400,463 | 17 | % | |||||||||||||||||
Income from operations before income taxes |
(62,409 | ) | (51,851 | ) | -20 | % | (10,974 | ) | (43,322 | ) | 75 | % | ||||||||||||
Income taxes |
||||||||||||||||||||||||
Current |
619 | 949 | 619 | 1,835 | ||||||||||||||||||||
Deferred |
(23,145 | ) | (20,445 | ) | (4,318 | ) | (17,651 | ) | ||||||||||||||||
| (22,526 | ) | (19,496 | ) | (3,699 | ) | (15,816 | ) | |||||||||||||||||
Net income |
$ | (39,883 | ) | $ | (32,355 | ) | -23 | % | $ | (7,275 | ) | $ | (27,506 | ) | 74 | % | ||||||||
Earnings per share |
||||||||||||||||||||||||
Basic operations |
$ | (0.26 | ) | $ | (0.22 | ) | -18 | % | $ | (0.05 | ) | $ | (0.18 | ) | 72 | % | ||||||||
Diluted |
$ | (0.26 | ) | $ | (0.22 | ) | -18 | % | $ | (0.05 | ) | $ | (0.18 | ) | 72 | % | ||||||||
Weighted average shares outstanding, as reported |
||||||||||||||||||||||||
Basic |
154,389 | 150,772 | 2 | % | 154,056 | 149,215 | 3 | % | ||||||||||||||||
Diluted |
154,389 | 150,772 | 2 | % | 154,056 | 149,215 | 3 | % | ||||||||||||||||
| (a) | Certain minor amounts were restated in 2008 and prior. See Footnote (18) in June 2009 Form 10Q. | |
| (b) | See separate oil and gas sales information table. | |
| (c) | Costs associated with FASB 123R 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) | Included in Derivative fair value income in 10-Q. | |
| (e) | Included in Other revenues in the 10-Q. | |
| (f) | Reflects the change in the market value of the vested Company stock held in the deferred compensation plan. |
9
RANGE RESOURCES CORPORATION
BALANCE SHEETS
(Audited, in thousands)
(Audited, in thousands)
| June 30, | December 31, | |||||||
| 2009 | 2008 (a) | |||||||
| Unaudited | ||||||||
Assets |
||||||||
Current assets |
$ | 123,396 | $ | 182,881 | ||||
Current unrealized derivative gain |
169,856 | 221,430 | ||||||
Oil and gas properties |
4,824,681 | 4,842,046 | ||||||
Transportation and field assets |
91,952 | 86,228 | ||||||
Unrealized derivative gain |
— | 5,231 | ||||||
Other |
226,114 | 214,063 | ||||||
| $ | 5,435,999 | $ | 5,551,879 | |||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities |
$ | 232,790 | $ | 351,449 | ||||
Current asset retirement obligation |
2,064 | 2,055 | ||||||
Current unrealized derivative loss |
2,412 | 10 | ||||||
Bank debt |
403,000 | 693,000 | ||||||
Subordinated notes |
1,383,134 | 1,097,668 | ||||||
Total long-term debt |
1,786,134 | 1,790,668 | ||||||
Deferred taxes |
773,277 | 779,218 | ||||||
Unrealized derivative loss |
2,534 | — | ||||||
Deferred compensation liability |
109,730 | 93,247 | ||||||
Long-term asset retirement obligation and other |
84,232 | 83,890 | ||||||
Common stock and retained earnings |
2,396,515 | 2,382,392 | ||||||
Treasury stock |
(8,557 | ) | (8,557 | ) | ||||
Other comprehensive income |
54,868 | 77,507 | ||||||
Total stockholders’ equity |
2,442,826 | 2,451,342 | ||||||
| $ | 5,435,999 | $ | 5,551,879 | |||||
| (a) | Certain minor amounts were restated in 2008 and prior. See Footnote (18) in June 2009 Form 10Q. |
10
RANGE RESOURCES CORPORATION
CASH FLOWS FROM OPERATIONS
(Unaudited, in thousands)
(Unaudited, in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2009 | 2008 (a) | 2009 | 2008 (a) | |||||||||||||
Net income |
$ | (39,883 | ) | $ | (32,355 | ) | $ | (7,275 | ) | $ | (27,506 | ) | ||||
Adjustments to reconcile net income to net cash provided by operations: |
||||||||||||||||
Loss (gain) from equity investment |
4,607 | (294 | ) | 5,526 | (19 | ) | ||||||||||
Deferred income tax expense (benefit) |
(23,145 | ) | (20,445 | ) | (4,318 | ) | (17,651 | ) | ||||||||
Depletion, depreciation and amortization |
88,713 | 72,115 | 173,033 | 142,248 | ||||||||||||
Exploration dry hole costs |
8 | 4,288 | 131 | 9,256 | ||||||||||||
Abandonment and impairment of unproved properties |
40,954 | 3,474 | 60,526 | 5,598 | ||||||||||||
Mark-to-market losses on oil and gas derivatives not designated as hedges |
61,595 | 162,280 | 30,070 | 297,501 | ||||||||||||
Ineffective hedging (gain) loss |
(356 | ) | (558 | ) | 97 | 2,691 | ||||||||||
Amortization of deferred financing costs and other |
1,283 | 859 | 2,333 | 1,488 | ||||||||||||
Deferred and stock-based compensation |
11,630 | 16,390 | 32,794 | 43,601 | ||||||||||||
(Gain) loss on sale of assets and other |
1,947 | 496 | 1,943 | (19,972 | ) | |||||||||||
Changes in working capital: |
||||||||||||||||
Accounts receivable |
1,057 | (63,301 | ) | 46,453 | (94,657 | ) | ||||||||||
Inventory and other |
(432 | ) | (31,117 | ) | (2,154 | ) | (29,839 | ) | ||||||||
Accounts payable |
(33,909 | ) | 20,927 | (72,008 | ) | 22,384 | ||||||||||
Accrued liabilities |
5,204 | 5,800 | 1,283 | 9,739 | ||||||||||||
Net changes in working capital |
(28,080 | ) | (67,691 | ) | (26,426 | ) | (92,373 | ) | ||||||||
Net cash provided from operations |
$ | 119,273 | $ | 138,559 | $ | 268,434 | $ | 344,862 | ||||||||
RECONCILIATION OF CASH FLOWS, a non-GAAP measure
(Unaudited, in thousands)
(Unaudited, in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2009 | 2008 (a) | 2009 | 2008 (a) | |||||||||||||
Net cash provided from continuing operations, as reported |
$ | 119,273 | $ | 138,559 | $ | 268,434 | $ | 344,862 | ||||||||
Net change in working capital |
28,080 | 67,691 | 26,426 | 92,373 | ||||||||||||
Exploration expense |
10,467 | 14,155 | 22,622 | 24,691 | ||||||||||||
Other |
(1,946 | ) | 277 | (2,418 | ) | (405 | ) | |||||||||
Cash flow from operations before changes in working capital, non-GAAP measure |
$ | 155,874 | $ | 220,682 | $ | 315,064 | $ | 461,521 | ||||||||
ADJUSTED WEIGHTED AVERAGE SHARES OUTSTANDING
(Unaudited, in thousands)
(Unaudited, in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2009 | 2008 (a) | 2009 | 2008 (a) | |||||||||||||
Basic: |
||||||||||||||||
Weighted average shares outstanding |
156,948 | 153,203 | 156,522 | 151,565 | ||||||||||||
Stock held by deferred compensation plan |
(2,559 | ) | (2,431 | ) | (2,466 | ) | (2,350 | ) | ||||||||
| 154,389 | 150,772 | 154,056 | 149,215 | |||||||||||||
Dilutive: |
||||||||||||||||
Weighted average shares outstanding |
156,948 | 153,203 | 156,522 | 151,565 | ||||||||||||
Dilutive stock options under treasury method |
(2,559 | ) | (2,431 | ) | (2,466 | ) | (2,350 | ) | ||||||||
| 154,389 | 150,772 | 154,056 | 149,215 | |||||||||||||
| (a) | Certain minor amounts were restated in 2008 and prior. See Footnote (18) in June 2009 Form 10Q. |
11
RANGE RESOURCES CORPORATION
OIL AND GAS SALES INFORMATION
A Non-GAAP Measure
(Unaudited, in thousands, except per unit data)
A Non-GAAP Measure
(Unaudited, in thousands, except per unit data)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||
Oil and gas sales components: |
||||||||||||||||||||||||
Oil sales |
$ | 39,943 | $ | 99,715 | $ | 68,022 | $ | 171,134 | ||||||||||||||||
NGL sales |
12,702 | 18,812 | 19,569 | 35,079 | ||||||||||||||||||||
Gas sales |
86,723 | 279,054 | 203,642 | 493,570 | ||||||||||||||||||||
Cash-settled hedges (effective): |
||||||||||||||||||||||||
Crude oil |
2,642 | (33,033 | ) | 12,007 | (48,425 | ) | ||||||||||||||||||
Natural gas |
50,513 | (16,926 | ) | 92,472 | 3,648 | |||||||||||||||||||
Total oil and gas sales, as reported |
$ | 192,523 | $ | 347,622 | -45 | % | $ | 395,712 | $ | 655,006 | -40 | % | ||||||||||||
Derivative fair value income (loss) components: |
||||||||||||||||||||||||
Cash-settled derivatives (ineffective): |
||||||||||||||||||||||||
Crude oil |
$ | 1,934 | $ | (6,705 | ) | $ | 7,548 | $ | (9,725 | ) | ||||||||||||||
Natural gas |
49,449 | (28,257 | ) | 88,310 | (10,534 | ) | ||||||||||||||||||
Change in mark-to-market on unrealized derivatives |
(61,595 | ) | (162,280 | ) | (30,070 | ) | (297,504 | ) | ||||||||||||||||
Unrealized ineffectiveness |
356 | 558 | (97 | ) | (2,691 | ) | ||||||||||||||||||
Total derivative fair value income (loss), as reported |
$ | (9,856 | ) | $ | (196,684 | ) | $ | (65,691 | ) | $ | (320,451 | ) | ||||||||||||
Oil and gas sales, including cash-settled derivatives: |
||||||||||||||||||||||||
Oil sales |
$ | 44,519 | $ | 59,977 | $ | 87,577 | $ | 112,984 | ||||||||||||||||
Natural gas liquid sales |
12,702 | 18,812 | 19,569 | 35,079 | ||||||||||||||||||||
Gas sales |
186,685 | 233,871 | 384,424 | 486,684 | ||||||||||||||||||||
Total |
$ | 243,906 | $ | 312,660 | -22 | % | $ | 491,570 | $ | 634,747 | -23 | % | ||||||||||||
Production during the period: |
||||||||||||||||||||||||
Oil (bbl) |
731,244 | 829,144 | -12 | % | 1,453,204 | 1,583,689 | -8 | % | ||||||||||||||||
Natural gas liquid (bbl) |
525,993 | 335,231 | 57 | % | 949,254 | 647,731 | 47 | % | ||||||||||||||||
Gas (mcf) |
31,905,593 | 27,653,005 | 15 | % | 62,457,926 | 54,975,779 | 14 | % | ||||||||||||||||
Equivalent (mcfe) (a) |
39,449,015 | 34,639,255 | 14 | % | 76,872,674 | 68,364,299 | 12 | % | ||||||||||||||||
Production — average per day: |
||||||||||||||||||||||||
Oil (bbl) |
8,036 | 9,111 | -12 | % | 8,029 | 8,702 | -8 | % | ||||||||||||||||
Natural gas liquid (bbl) |
5,780 | 3,684 | 57 | % | 5,244 | 3,559 | 47 | % | ||||||||||||||||
Gas (mcf) |
350,611 | 303,879 | 15 | % | 345,071 | 302,065 | 14 | % | ||||||||||||||||
Equivalent (mcfe) (a) |
433,506 | 380,651 | 14 | % | 424,711 | 375,628 | 13 | % | ||||||||||||||||
Average prices realized, including cash-settled hedges and derivatives: |
||||||||||||||||||||||||
Crude oil (per bbl) |
$ | 60.88 | $ | 72.34 | -16 | % | $ | 60.26 | $ | 71.34 | -16 | % | ||||||||||||
Natural gas liquid (per bbl) |
$ | 24.15 | $ | 56.12 | -57 | % | $ | 20.61 | $ | 54.16 | -62 | % | ||||||||||||
Gas (per mcf) |
$ | 5.85 | $ | 8.46 | -31 | % | $ | 6.15 | $ | 8.85 | -30 | % | ||||||||||||
Equivalent (per mcfe) (a) |
$ | 6.18 | $ | 9.03 | -32 | % | $ | 6.39 | $ | 9.28 | -31 | % | ||||||||||||
| (a) | Oil and natural gas liquids are converted to gas equivalents on a basis of six mcf per barrel. |
12
RANGE RESOURCES CORPORATION
RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES
AS REPORTED TO INCOME FROM OPERATIONS BEFORE INCOME TAXES
EXCLUDING CERTAIN NON-CASH ITEMS, a non-GAAP measure
(Unaudited, in thousands, except per share data)
AS REPORTED TO INCOME FROM OPERATIONS BEFORE INCOME TAXES
EXCLUDING CERTAIN NON-CASH ITEMS, a non-GAAP measure
(Unaudited, in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2009 | 2008 (a) | 2009 | 2008 (a) | |||||||||||||||||||||
As reported |
$ | (62,409 | ) | $ | (51,851 | ) | 20 | % | $ | (10,974 | ) | $ | (43,322 | ) | -75 | % | ||||||||
Adjustment for certain non-cash items
(Gain) loss on sale of properties |
29 | 633 | (7 | ) | (20,047 | ) | ||||||||||||||||||
Change in mark-to-market on unrealized derivatives |
61,595 | 162,280 | 30,070 | 297,501 | ||||||||||||||||||||
Ineffective hedging (gain) loss |
(356 | ) | (558 | ) | 97 | 2,691 | ||||||||||||||||||
Abandonment and impairment of unproven properties |
40,954 | 3,474 | 60,526 | 5,598 | ||||||||||||||||||||
Equity method impairment |
2,950 | — | 2,950 | — | ||||||||||||||||||||
Transportation and gathering — non-cash stock compensation |
187 | 111 | 463 | 238 | ||||||||||||||||||||
Direct operating — non-cash stock compensation |
830 | 711 | 1,559 | 1,289 | ||||||||||||||||||||
Exploration expenses — non-cash stock compensation |
893 | 1,019 | 1,954 | 2,108 | ||||||||||||||||||||
General & administrative — non-cash stock compensation |
8,935 | 6,965 | 15,160 | 11,576 | ||||||||||||||||||||
Deferred compensation plan — non-cash stock compensation |
756 | 7,539 | 13,190 | 28,150 | ||||||||||||||||||||
As adjusted |
54,364 | 130,323 | -58 | % | 114,988 | 285,782 | -60 | % | ||||||||||||||||
Income taxes, adjusted |
||||||||||||||||||||||||
Current |
619 | 949 | 619 | 1,835 | ||||||||||||||||||||
Deferred |
20,061 | 51,284 | 42,251 | 109,472 | ||||||||||||||||||||
Net income excluding certain items, a non-GAAP measure |
$ | 33,684 | $ | 78,090 | -57 | % | $ | 72,118 | $ | 174,475 | -59 | % | ||||||||||||
Non-GAAP earnings per share
|
||||||||||||||||||||||||
Basic |
$ | 0.22 | $ | 0.52 | -58 | % | $ | 0.47 | $ | 1.17 | -60 | % | ||||||||||||
Diluted |
$ | 0.21 | $ | 0.50 | -58 | % | $ | 0.46 | $ | 1.12 | -59 | % | ||||||||||||
Non-GAAP diluted shares outstanding |
158,350 | 156,911 | 158,150 | 155,333 | ||||||||||||||||||||
(a) Certain minor amounts were restated in 2008 and prior. See Footnote (18) in June 2009 Form 10Q.
HEDGING POSITION
As of July 22, 2009
(Unaudited)
As of July 22, 2009
(Unaudited)
| Gas | Oil | ||||||||||||||||
| Volume | Average | Volume | Average | ||||||||||||||
| Hedged | Hedge | Hedged | Hedge | ||||||||||||||
| (Mmbtu/d) | Prices | (Bbl/d) | Prices | ||||||||||||||
3Q-4Q 2009 |
Swaps | 91,264 | $ | 7.49 | — | — | |||||||||||
3Q-4Q 2009 |
Collars | 194,918 | $ | 7.46 - $8.15 | 6,000 | $ | 63.43 - $76.01 | ||||||||||
2010 |
Swaps | — | — | — | — | ||||||||||||
2010 |
Collars | 139,671 | $ | 5.50 - $7.46 | — | — | |||||||||||
Note: Details as to the Company’s hedges are posted on its website and are updated periodically.
13