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):
February 24, 2011 (February 23, 2011)
February 24, 2011 (February 23, 2011)
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 7.01 | Regulation FD Disclosure |
On February 23, 2011 Range Resources Corporation issued a press release providing information
on fourth quarter 2010 production volumes and an operational update. A copy of this press release
is being furnished as an exhibit to this report on Form 8-K.
In accordance with General Instruction B. 2 of Form 8-K, the information in this Current
Report on Form 8-K under this heading, including Exhibit 99.1 shall not be deemed “filed” for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, except as shall be expressly set forth in such a
filing.
| ITEM 9.01 | Financial Statements and Exhibits |
(c) Exhibits:
| 99.1 | Press Release dated February 23, 2011 |
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: February 24, 2011
3
EXHIBIT INDEX
| Exhibit Number | Description | |||
| 99.1 | Press Release dated February 23, 2011 |
|||
4
Exhibit 99.1
NEWS RELEASE
RANGE PROVIDES OPERATIONS UPDATE
FORT WORTH, TEXAS, FEBRUARY 23, 2010...RANGE RESOURCES CORPORATION (NYSE: RRC) today provided
an operations update. As announced previously, fourth quarter production volumes averaged 541.0
Mmcfe net per day, an 18% increase over the prior-year period and 8% higher than third quarter
2010. The record production marked the Company’s 32nd consecutive quarter of sequential production
growth. Production was 76% natural gas, 18% natural gas liquids (NGLs) and 6% crude oil. Targeted
drilling to the liquids-rich portion of the Marcellus Shale play in Pennsylvania, as well as the
Midcontinent and Permian Basin regions drove the production growth. Fourth quarter 2010 production
was 24% NGLs and crude oil versus 18% for fourth quarter of 2009. For the year, production
increased 14%, despite property sales. Excluding the property sales, production would have grown
19%.
Fourth quarter drilling expenditures of $246 million funded the drilling of 90 (64 net) wells and 7
(7 net) recompletions. A 95% success rate was achieved. For the full-year, 237 (167 net) wells
were successfully drilled and are now on production, while 111 (81 net) wells are currently in
various stages of completion or waiting on pipeline connection. For the year, capital expenditures
totaled just under $1.1 billion or $100 million less than budgeted.
Commenting on the announcement, John Pinkerton, Range’s Chairman and CEO, said, “We ended 2010 on a
very strong note, having completed the best drilling program in our history. Our 840% drill-bit
reserve replacement and $0.71 all-in finding and development cost far exceeded expectations,
reaching all-time records. This was accomplished even though we under spent our capital budget by
approximately $100 million. 2011 greeted us with some of the toughest winter weather we have seen
in many years. While Range and the industry experienced significant shut-ins, our operating teams
are continuing to execute by bringing on some spectacular new wells in 2011. The well results
reflect the quality of our drilling inventory and the quality of our technical team. We are
well-positioned to continue our streak of double digit per share production and reserve growth with
one of the industry’s lowest cost structures.”
Marcellus Shale
Range’s Marcellus production for December 2010 averaged more than 200 Mmcfe per day net. Approximately 71% of the production was natural gas and 29% was NGLs and condensate. During the fourth quarter, the Marcellus division brought online 11 horizontal wells in southwestern Pennsylvania, nine of which were located in the liquids-rich wet area of the play. Based on initial production results, we expect the average estimated ultimate recovery (EUR) of these 11 wells to exceed our average reserve estimate of 5.0 Bcfe per well for the southwestern portion of Pennsylvania. At the end of the year, Range had drilled 53 horizontal wells that were waiting on completion and 15 wells waiting on pipeline connection.
Range’s Marcellus production for December 2010 averaged more than 200 Mmcfe per day net. Approximately 71% of the production was natural gas and 29% was NGLs and condensate. During the fourth quarter, the Marcellus division brought online 11 horizontal wells in southwestern Pennsylvania, nine of which were located in the liquids-rich wet area of the play. Based on initial production results, we expect the average estimated ultimate recovery (EUR) of these 11 wells to exceed our average reserve estimate of 5.0 Bcfe per well for the southwestern portion of Pennsylvania. At the end of the year, Range had drilled 53 horizontal wells that were waiting on completion and 15 wells waiting on pipeline connection.
Last week, Range brought on approximately 70 Mmcfe per day net of new production that, at year-end,
was waiting on completion and/or pipeline connection. This included three wells in the liquid-rich
area of the southwest with a collective initial production of 26.1 (22 net) Mmcf per day of natural
gas and 1,373 (1,167 net) barrels of NGLs and condensate per day or 29 Mmcfe per day net. In the
southwest area, Range curtailed some of its lower Btu gas to commence production from these wells
in the more liquid-rich area. The curtailed production will be brought back on as we continue to
build out the pipeline system in 2011. The initial phase of our Lycoming County gathering system
came online February 16th. Current production is 45 (39 net) Mmcf per day as we have
five wells now on production, averaging 9.0 (7.9 net) Mmcf per day per well. Range plans to bring
online 20 additional wells in Lycoming County by the end of the third quarter.
Earlier this month, Range completed a significant Marcellus step-out well in the southwest, which
tested at 18.6 Mmcfe per day on a five-day test. Current production in the Marcellus is
approximately 260 Mmcfe per day net, from both the southwest and northeast areas. Given excellent
drilling results and the exceptional work of our technical team, Range is well on schedule to
achieve its Marcellus Shale year-end 2011 production exit rate target of 400 Mmcfe per day net.
Providing additional resource potential from our current acreage position in this region is a
variety of shale formations that lie above the Marcellus formation, known as the Upper Devonian
shales. We believe that a majority of our acreage in the southwest portion of the play is
prospective for the Upper Devonian shales. Earlier this month, Range announced that it believes
that the Upper Devonian Shale formation on its existing acreage contains an unrisked resource
potential of 10 to 14 Tcfe. Range also announced the seven-day initial production rate for the
first Utica Shale horizontal completion in the basin to be 4.4 Mmcfe per day. The Utica Shale
formation lies below the Marcellus Shale formation.
Appalachian Division
During the fourth quarter 2010, Range’s Appalachian division drilled a total of 51 (27 net) wells, continuing its successful development of tight gas sand, coal bed methane and horizontal drilling projects in Virginia. The division averaged four rigs running during the quarter and drilled 11 (6 net) vertical tight gas sand wells, 26 (12 net) coal bed methane wells and 8 (3 net) horizontal wells in Nora. In addition, on the recently acquired Nora extension property, the division drilled 5 (5 net) tight gas sand wells and 1 (1 net) horizontal Huron Shale well. The horizontal Huron Shale well was a significant step-out well drilled almost 25 miles from the prior Nora field horizontal wells. Since this area has only been sparsely drilled, reserves here are virgin pressured with no depletion from prior drilling. The step-out well tested at 2.6 Mmcf per day which is materially higher than the typical Nora horizontal well. Also in the quarter, Range performed five recompletions of behind-pipe pays on wells in the Nora Extension area with positive results. Based on this success, 30 additional wells are planned for recompletion in 2011.
During the fourth quarter 2010, Range’s Appalachian division drilled a total of 51 (27 net) wells, continuing its successful development of tight gas sand, coal bed methane and horizontal drilling projects in Virginia. The division averaged four rigs running during the quarter and drilled 11 (6 net) vertical tight gas sand wells, 26 (12 net) coal bed methane wells and 8 (3 net) horizontal wells in Nora. In addition, on the recently acquired Nora extension property, the division drilled 5 (5 net) tight gas sand wells and 1 (1 net) horizontal Huron Shale well. The horizontal Huron Shale well was a significant step-out well drilled almost 25 miles from the prior Nora field horizontal wells. Since this area has only been sparsely drilled, reserves here are virgin pressured with no depletion from prior drilling. The step-out well tested at 2.6 Mmcf per day which is materially higher than the typical Nora horizontal well. Also in the quarter, Range performed five recompletions of behind-pipe pays on wells in the Nora Extension area with positive results. Based on this success, 30 additional wells are planned for recompletion in 2011.
Midcontinent Division
The Midcontinent division continued development of liquids-rich plays in the fourth quarter of 2010. Two additional horizontal Mississippian Lime wells were completed for a combined average daily rate of 807 barrels of oil, 298 barrels of NGL’s and 1.6 Mmcf or 1,314 (1,035 net) Boe per day at depths of 5,000 feet. In the Ardmore Basin horizontal Woodford play we added three wells, which are currently in the completion phase and are expected to commence sales next month. One operated rig will remain active throughout the year, while non-operated activity is expected to add 1 to 2 additional rigs to the area. Non-operated activity will also drive Range’s participation in the Woodford “Cana” Shale play of the Anadarko Basin where we control approximately 80,000 (42,000) net legacy acres that are all held by production. For its first Cana Shale well, Range has joined for a 10% working interest, in a Devon Energy operated well in Blaine County, Oklahoma. The well has been drilled to total depth and completion operations have commenced. Horizontal drilling activity in the Texas Panhandle has also achieved another milestone. In the fourth quarter, Range completed the industry’s first successful horizontal St. Louis Lime well which tested at rates of 360 barrels of oil, 543 barrels of NGL’s and 13.8 Mmcf or 19.2 (5.8 net) Mmcfe per day net.
The Midcontinent division continued development of liquids-rich plays in the fourth quarter of 2010. Two additional horizontal Mississippian Lime wells were completed for a combined average daily rate of 807 barrels of oil, 298 barrels of NGL’s and 1.6 Mmcf or 1,314 (1,035 net) Boe per day at depths of 5,000 feet. In the Ardmore Basin horizontal Woodford play we added three wells, which are currently in the completion phase and are expected to commence sales next month. One operated rig will remain active throughout the year, while non-operated activity is expected to add 1 to 2 additional rigs to the area. Non-operated activity will also drive Range’s participation in the Woodford “Cana” Shale play of the Anadarko Basin where we control approximately 80,000 (42,000) net legacy acres that are all held by production. For its first Cana Shale well, Range has joined for a 10% working interest, in a Devon Energy operated well in Blaine County, Oklahoma. The well has been drilled to total depth and completion operations have commenced. Horizontal drilling activity in the Texas Panhandle has also achieved another milestone. In the fourth quarter, Range completed the industry’s first successful horizontal St. Louis Lime well which tested at rates of 360 barrels of oil, 543 barrels of NGL’s and 13.8 Mmcf or 19.2 (5.8 net) Mmcfe per day net.
RANGE RESOURCES CORPORATION (NYSE: RRC) is an independent natural gas company operating in the
Southwestern and Appalachian regions of the United States.
Except for historical information, statements made in this release, including those relating
to anticipated production, capital expenditures, anticipated cost reductions, anticipated rates of
returns, the number of wells to be drilled, reserve potential, anticipated asset sales, reserve
growth and anticipated financial results are forward-looking statements as defined by the
Securities and Exchange Commission. 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 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.
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. Beginning with
year-end reserves for 2009, the SEC permits the optional disclosure of probable and possible
reserves. Range has elected not to disclose the Company’s probable and possible reserves in its
filings with the SEC. Range uses certain broader terms such as “resource potential,” or “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 being actually 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,
unrisked resource potential has not been fully risked by Range’s management. Actual quantities that
may be ultimately recovered from Range’s interests will 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. Investors are urged to consider closely the disclosure
in our most recent Quarterly Report on Form 10-Q, filed on July 27, 2010 for the period ending June
30, 2010, 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-Q by
calling the SEC at 1-800-SEC-0330.
2011-6
Contact:
|
Rodney Waller, Senior Vice President David Amend, Investor Relations Manager Laith Sando, Sr. Financial Analyst Karen Giles, Corporate Communications Manager (817) 870-2601 www.rangeresources.com |