August 16, 2017

 

 

Via Edgar and Federal Express

 

 

Mr. H. Roger Schwall

Assistant Director

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, DC 20549

 

Re:Range Resources Corporation

Form 10-K for the Fiscal Year ended December 31, 2016

Filed February 22, 2017

Form 8-K Filed August 2, 2017

(File No. 1-12209)

 

Dear Mr. Schwall:

 

On August 10, 2017, Range Resources Corporation (“we” or the “Company”) received comments from the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission to the above-referenced Form 10-K and Form 8-K. We respectfully submit the following responses to your inquiries. For your convenience, each response is prefaced by the exact text of the Staff’s comment in italicized text.

 

Form 10-K for the Fiscal Year ended December 31, 2016

 

Business and Properties, page 2

 

Proved Undeveloped Reserves (PUDS), page 11

 

Inquiry:

 

1.The disclosure here and elsewhere on page F-47 states “all proved undeveloped drilling (PUD) locations are scheduled to be drilled prior to the end of 2021”, e.g. five years from the date of your current filing.

 

The disclosure on page F-47 also indicates that you have certain reserves as of the date of your current filing that have been reported for more than five years from their original date of booking, e.g. more that five years from the date of your current filing.

 

It appears that the current fiscal year-end of December 31, 2016 is the reference date used in determining the length of time such proved undeveloped reserves have been disclosed.  Item 1203(d) of Regulation S-K clarifies the reference date for determining the length of time such reserves remain undeveloped is the date of initial disclosure in a filing made with the U.S. Securities and Exchange Commission.  Please clarify for us the extent to which any of the proved undeveloped reserves disclosed as of December 31, 2015, other than the 50 Bcfe disclosed on F-47, will remain undeveloped for five or more years from the date of initial disclosure.  Please include in your analysis any wells which have been drilled but remain uncompleted where the related reserves will not be converted to developed status within five years of initial disclosure as proved undeveloped reserves.

 

 

 

Range Resources Corporation          100 Throckmorton Street, Suite 1200                Fort Worth, Texas 76102                 Tel: 817.870.2601

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Response:

 

We acknowledge the Staff’s comment and respectfully note that all of our recorded proved undeveloped reserves (PUDs) as of December 31, 2016 are scheduled to be drilled within five years from the date of their initial disclosure.  The Company also notes there are no PUDs that have remained uncompleted beyond five years of initial disclosure other than the 50 Bcfe disclosed on F-47.  The Company proposes to clarify our disclosure in future filings, commencing with the Company’s Annual Report on Form 10-K for the year ending December 31, 2017, as indicated below:

 

“All of the Company’s recorded proved undeveloped drilling locations are scheduled to be drilled within five years of initial disclosure” or similar wording as appropriate.

 

 

Producing Wells, page 14

 

Inquiry:

 

2.We note the disclosure summarizing your drilling activity for the past three years; however, we are unable to locate comparable disclosure relating to your present activities, such as the number of wells in process of being drilled or wells temporarily suspended awaiting completion or connection to sales.  To the extent that these or other related activities are of material importance, please expand your disclosure consistent with the guidance in Item 1206 of Regulation S-K.

 

Response:

 

We acknowledge the Staff’s comment and provide the following explanation.  We respectfully refer the Staff to page 14 under the caption “Drilling Activity” where we have disclosed the following:

 

“As of December 31, 2016, we were in the process of drilling 36 (33.7 net) wells.”

 

We do not carry an uncompleted well inventory beyond normal work-in-process activity cited on page 14, as we routinely complete wells within a relatively short period of time after drilling is complete and the rig has been removed from the location.  The Company proposes to clarify its disclosure in future filings, commencing with the Company’s Annual Report on Form 10-K for the year ending December 31, 2017, as indicated below:

 

“As of December 31, 2017, we were in the process of drilling, completing or waiting on completion __ (___ net) wells” or similar wording as appropriate.

 

 

Notes to Consolidated Financial Statements

 

(19) Supplemental Information on Natural Gas and Oil Exploration, Development and Production Activities (Unaudited), Page F-43

 

Estimated Quantities of Proved Oil and Gas Reserves (Unaudited), page F-44

 

Inquiry:

 

3.You disclose that as of December 31, 2016, there were 50 Bcfe of reserves that have been reported for more than five years from their original date of booking.  Please tell us the specific circumstances that justify continuing to disclose these proved undeveloped reserves as proved reserves at December 31, 2016.

Page | 2      Range Resources Corporation     100 Throckmorton Street, Suite 1200     Fort Worth, Texas 76102     Tel: 817.870.2601

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Response:

 

We acknowledge the Staff’s question and provide the following explanation.  The 50 Bcfe of reserves (less than 1% of total proved reserves) have been reported for more than five years from their original booking date.  This 50 Bcfe represents wells assigned proved reserves in 2011 and were included in proved reserves as of December 31, 2016 due to infrastructure delays.  As of the date of this letter, the wells to which these reserves were assigned have been drilled, are currently being completed and are expected to be turned to sales in the fourth quarter of this year.  The development of these reserves was delayed as we waited on capacity to become available in the existing infield gathering infrastructure.  Over the past several years, we have continued to drill longer laterals, have higher per well productivity and wells have performed better than projected which resulted in the infield gathering infrastructure capacity being fully utilized longer than originally forecasted.

 

 

Form 8-K Filed August 2, 2017

 

Exhibit 99.1 – News Release of Second Quarter 2017 Financial Results

 

Inquiry:

 

4.We note in the third bullet of the Highlights section, you present your non-GAAP measure, Cash flow from operations before changes in working capital without presenting a directly comparable GAAP measure with equal or greater prominence.  Please review your presentation pursuant to the guidance in Item 10e(1)(i)(A) of Regulation S-K and Compliance and Disclosure Interpretation (C&DI) 102.10.

 

Response:

 

We have reviewed Item 10e(1)(i)(A) of Regulation S-K and Compliance and Disclosure Interpretation (C&DI) 102.10.  When preparing our next news release for the quarter ended September 30, 2017, we intend to present the most directly comparable GAAP measure with equal or greater prominence to the non-GAAP measure, including ensuring that the most directly comparable GAAP measure precedes the non-GAAP measure.

 

Inquiry:

 

5.We note you present your cash margins per mcfe for each quarter.  Please tell us and disclose how you calculate this measure, and provide the disclosures set for in Item 10(e)(1)(i) of Regulation S-K to the extent it represents a non-GAAP measure.

 

Page | 3      Range Resources Corporation     100 Throckmorton Street, Suite 1200     Fort Worth, Texas 76102     Tel: 817.870.2601

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Response:

 

We acknowledge the Staff’s question.  The presentation below includes the calculation of cash margin per mcfe for the periods presented:

 

 

 

 

 

We acknowledge our presentation of cash margin per mcfe is a non-GAAP measure and we did not present a comparable measure in accordance with GAAP or a reconciliation from our non-GAAP measure to the comparable GAAP measure.  The presentation below includes such reconciliation for the periods presented:

 

 

 

 

 

 

 

 

 

 

 

Page | 4      Range Resources Corporation     100 Throckmorton Street, Suite 1200     Fort Worth, Texas 76102     Tel: 817.870.2601

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When preparing our next news release for the quarter ended September 30, 2017, we will present the computation of cash margin and will present, with equal or greater prominence, the most directly comparable financial measure calculated in accordance with GAAP and a reconciliation to that measure.

 

Inquiry:

 

6.On page 12 we note you present Average prices including cash settled hedges that qualify for hedge accounting before third party transportation costs even though you appear to have discontinued hedge accounting effective March 1, 2013.  Please either revise or explain reason for the caption description.

 

Response:

 

We acknowledge the Staff’s comment and in future disclosures, we will revise the caption description to the following:

 

“Average prices including cash settled hedges before third party transportation costs.”

 

Inquiry:

 

7.On page 13 we note you present non GAAP measures Adjusted basic and Adjusted diluted income per common share without a reconciliation from your GAAP earnings per share pursuant to C&DI 102.05.  Please provide the additional disclosures.

Page | 5      Range Resources Corporation     100 Throckmorton Street, Suite 1200     Fort Worth, Texas 76102     Tel: 817.870.2601

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Response:

 

We acknowledge the Staff’s comment and in future disclosures, we will provide a reconciliation of GAAP earnings per share to the non-GAAP earnings per share. The presentation below includes such reconciliation for the periods presented:

 

Page | 6      Range Resources Corporation     100 Throckmorton Street, Suite 1200     Fort Worth, Texas 76102     Tel: 817.870.2601

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In connection with the foregoing responses, the undersigned, on behalf of the Company, acknowledges that:

 

 

Please contact the undersigned at (817) 869-4224 if you have any additional questions or comments.

 

Sincerely,

 

 

 

 

 

Cc:Jeffrey Ventura, Chief Executive Officer

David P. Poole, Senior Vice President and General Counsel

Mark Metts – Sidley Austin LLP

Brad Skinner – United States Securities and Exchange Commission

Lily Dang – United States Securities and Exchange Commission

Jenifer Gallagher – United States Securities and Exchange Commission

John Hodgin – United States Securities and Exchange Commission

Page | 7      Range Resources Corporation     100 Throckmorton Street, Suite 1200     Fort Worth, Texas 76102     Tel: 817.870.2601