8-K
false000031585200003158522021-10-262021-10-26

 

 

UNITED STATES

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

Date of Report (Date of earliest event reported): October 27, 2021 (October 26, 2021)

 

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 Street, Suite 1200

Fort Worth, Texas

 

76102

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (817) 870-2601

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.01 par value

 

RRC

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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ITEM 2.02 Results of Operations and Financial Condition

On October 26, 2021 Range Resources Corporation issued a press release announcing its third quarter 2021 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 October 26, 2021

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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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/ Mark S. Scucchi

 

Mark S. Scucchi

 

Chief Financial Officer

Date: October 27, 2021

 

 

 

 

3


EX-99.1

 

Exhibit 99.1

NEWS RELEASE

Range Announces Third Quarter 2021 Financial Results

 

FORT WORTH, TEXAS, October 26, 2021…RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its third quarter 2021 financial results.

 

Highlights –

 

Realizations before index hedges of $4.37 per mcfe, or approximately $0.36 above NYMEX natural gas
Pre-hedge NGL realization of $34.05 per barrel, a $6.14 per barrel increase versus prior quarter
Natural gas differentials, including basis hedging, averaged $0.35 per mcf below NYMEX
All-in third quarter capital spending was $96 million, approximately 23% of the annual budget
Production averaged 2.14 Bcfe per day, approximately 30% liquids
Reduced total debt outstanding by approximately $91 million
All-in 2021 capital budget lowered by $10 million to $415 million
Improved midpoint of 2021 natural gas differential guidance by approximately $0.07 per mcf
Increased midpoint of 2021 NGL differential guidance by $0.25 per barrel
Divestiture contingent consideration fair value increased $12.9 million to $50.2 million

 

Commenting on the quarter, Jeff Ventura, the Company’s CEO said, “Range remains committed to disciplined capital spending and generating sustainable free cash flow. This was demonstrated in the third quarter, as Range generated $276 million in operating cash flow before changes in working capital, as compared to just $96 million of all-in capital spending. We expect to generate significant free cash flow in the coming quarters and rapidly approach balance sheet targets with leverage trending below 1x by the end of next year at current strip pricing. Additionally, we continue to make progress on other key objectives: improving margins, generating free cash flow, and operating safely while maintaining peer-leading capital efficiency. We believe Range is differentiated as a result of our low sustaining capital, competitive cost structure, liquids optionality, marketing strategies, environmental leadership and importantly, our multi-decade core inventory life, which is an increasingly important competitive advantage.”

 

 

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, stock-based 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, production and ad valorem taxes, 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.

 

 

Third Quarter 2021

 

GAAP revenues for third quarter 2021 totaled $303 million, GAAP net cash provided from operating activities (including changes in working capital) was $192 million, and GAAP net earnings was a loss of $350 million ($1.44 per diluted share). Third quarter earnings results include a $652 million derivative fair value loss due to increases in commodity prices.

 

Non-GAAP revenues for third quarter 2021 totaled $795 million, and cash flow from operations before changes in working capital, a non-GAAP measure, was $276 million. Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $130 million ($0.52 per diluted share) in third quarter 2021.

 

 

 

 

 

1


 

 

The following table details Range’s average production and realized pricing for third quarter 2021(a):

 

 

3Q21 Production & Realized Pricing

 

 

Natural Gas

(Mcf)

 

Oil (Bbl)

 

NGLs

(Bbl)

 

Natural Gas

Equivalent (Mcfe)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net production per day

 

1,496,888

 

7,727

 

98,705

 

2,135,485

 

 

 

 

 

 

 

 

 

Average index price(b)

 

$ 4.01

 

$ 70.42

 

$ 33.22

 

 

Differential

 

(0.42)

 

(6.90)

 

0.83

 

 

Basis hedging

 

0.06

 

-

 

-

 

 

Realized prices before index hedges

 

$ 3.66

 

$ 63.52

 

$ 34.05

 

$4.37

Settled index hedges

 

(0.96)

 

(13.20)

 

(2.88)

 

(0.86)

Average realized prices after hedges

 

$ 2.69

 

$ 50.32

 

$ 31.17

 

$ 3.51

 

(a)
May not add due to rounding
(b)
Indexes include NYMEX-Henry Hub, NYMEX-WTI and OPIS-Mont Belvieu for natural gas, oil and NGLs, respectively

 

Third quarter 2021 natural gas, natural gas liquids (NGL) and oil price realizations (including the impact of cash-settled hedges and derivative settlements) averaged $3.51 per mcfe.

 

The average natural gas price, including the impact of basis hedging, was $3.66 per mcf, or a ($0.35) per mcf differential to NYMEX. The Company updated its average 2021 natural gas differential guidance to approximately $0.28 per mcf below NYMEX, a $0.07 per mcf annual improvement compared to the prior guidance midpoint.

 

Pre-hedge NGL realizations were $34.05 per barrel, an improvement of $6.14 per barrel versus the second quarter of 2021 and a $0.83 premium to the Mont Belvieu equivalent barrel. The Company updated its average 2021 premium differential estimate to the Mont Belvieu equivalent barrel to within a range of $1.00 to $2.00 per barrel for 2021, a $0.25 per barrel improvement at the midpoint of guidance.

 

Crude oil and condensate price realizations, before realized hedges, averaged $63.52 per barrel, or $6.90 below WTI (West Texas Intermediate). Range’s estimated condensate differential to WTI during 2021 remains within an expected range of $7 to $9 below NYMEX.

 

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

 

 

Expenses

 

3Q 2021

($/Mcfe)

 

 

2Q 2021

($/Mcfe)

 

 

 Increase

 (Decrease)

 

 

 

 

 

 

 

 

 

Direct operating(a)

$

0.10

 

$

0.10

 

 

0%

Transportation, gathering, processing and compression

 

1.51

 

 

1.48

 

 

2%

Production and ad valorem taxes

 

0.04

 

 

0.04

 

 

0%

General and administrative(a)

 

0.16

 

 

0.16

 

 

0%

Interest expense(a)

 

0.28

 

 

0.29

 

 

(3%)

Total cash unit costs(b)

 

2.08

 

 

2.07

 

 

1%

Depletion, depreciation and amortization (DD&A)

 

0.47

 

 

0.47

 

 

0%

Total unit costs plus DD&A(b)

$

2.56

 

$

2.54

 

 

1%

(a)
Excludes stock-based compensation, legal settlements and amortization of deferred financing costs.
(b)
May not add due to rounding.

 

 

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Capital Expenditures

 

Third quarter 2021 drilling and completion expenditures were $91.8 million. In addition, during the quarter, $4.6 million was invested on acreage leasehold, gathering systems and other corporate items. Total capital expenditures year-to-date were $322 million at the end of the third quarter. As a result of continued efficiency gains realized year-to-date, Range expects annual capital spending of $415 million in 2021, or $10 million under the original budget.

 

Financial Position

 

As of September 30, 2021, Range had total debt outstanding of $2.98 billion, consisting of $30 million in bank debt and $2.95 billion in senior notes. The Company has approximately $750 million in senior notes that mature through 2023, which are expected to be retired with projected free cash flow at current strip pricing. Range had over $2.0 billion of borrowing capacity under the bank credit facility commitment amount at the end of the third quarter.

 

 

Production and Operational Activity

 

Production for the third quarter was 2.14 Bcfe per day, representing a 1.5% increase over second quarter 2021. Range expects a similar production increase in the fourth quarter and to exit the year near 2.2 Bcfe per day. Average daily production for calendar 2021 is expected to be 2.12 to 2.13 Bcfe per day, approximately 1% below the previous guidance.

 

Adjustments to 2021 production guidance are a result of temporary gathering and transportation outages and delays alongside weather-related force majeure events. Range remains committed to the originally planned activity cadence and disciplined capital spending and expects to be under budget for the fourth consecutive year.

 

 

The table below summarizes estimated activity for 2021 regarding the number of wells to sales for each area.

 

 

 

 

Wells TIL

3Q 2021

 

Calendar 2021

Planned TIL

 

Remaining

2021

SW PA Super-Rich

 

 

4

 

17

 

4

SW PA Wet

 

 

0

 

18

 

3

SW PA Dry

 

 

8

 

25

 

0

Total Wells

 

 

12

 

60

 

7

 

Marketing and Transportation

 

The natural gas pricing benchmark, Henry Hub, averaged $4.01 per Mmbtu during the quarter, the highest since 2014. The East, Midwest, and Gulf markets, where Range sells its natural gas production, have experienced meaningful improvements compared to 2020 in terms of both basis and absolute pricing due to strong summer demand and storage deficits relative to historical averages across each region. Range reported a third quarter natural gas differential of $0.35 per mcf below NYMEX, including basis hedging. As a result of year-to-date performance and improving regional basis into the upcoming winter months, the Company updated its average 2021 natural gas differential guidance to approximately $0.28 per mcf below NYMEX, a $0.07 per mcf annual improvement compared to the prior guidance midpoint. The updated guidance implies a fourth quarter natural gas differential estimate of approximately $0.24 per mcf below NYMEX, inclusive of basis hedging.

 

Propane prices ended the third quarter at the highest level in over seven years, as the Mont Belvieu weighted price for Range’s NGL barrel increased by approximately $7.50 per barrel, compared to the second quarter, to over $33 per barrel. Range’s NGL exports continue to deliver significant value versus domestic northeast prices, as the Company’s NGL portfolio of contracts drove an $0.83 per barrel premium to the Mont Belvieu equivalent for the quarter. The flexibility of Range’s transportation and sales portfolio places the Company in a strong position to serve increased domestic and international demand. As a result of year-to-date performance and strong domestic and international prices, Range has improved its estimated 2021 premium differential to the Mont Belvieu equivalent barrel to within a range of $1.00 to $2.00 per barrel, a $0.25 per barrel improvement at the midpoint of guidance.

 

Range’s forecasted 2021 pre-hedge NGL realization has increased by approximately $4 per barrel since July, resulting in an increase of over $140 million in forecasted revenue. As a result of higher NGL prices and the effect of Range’s price-linked processing contracts, Range is increasing guidance for 2021 GP&T expense to $1.48 to $1.52 per mcfe. Net of projected

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processing costs, Range’s forecasted pre-hedge cash flow from NGL sales in 2021 has increased by over $100 million since July. As previously disclosed, Range expects GP&T expense to decline annually in 2022 and beyond based on existing gathering contracts. The reduction in annual gathering expenses relative to 2021 totals approximately $70 million by 2025 and greater than $100 million by 2030.

 

Guidance – 2021

 

Capital & Production Guidance

 

Range’s updated 2021 all-in capital budget is $415 million. Production for full-year 2021 is expected to average approximately 2.12 to 2.13 Bcfe per day, with ~30% attributed to liquids production.

 

Full Year 2021 Expense Guidance

 

Direct operating expense:

$0.09 - $0.11 per mcfe

Transportation, gathering, processing and compression expense:

$1.48 - $1.52 per mcfe

Production tax expense:

$0.02 - $0.04 per mcfe

Exploration expense:

$20 - $25 million

G&A expense:

$0.15 - $0.16 per mcfe

Interest expense:

$0.26 - $0.28 per mcfe

DD&A expense:

$0.47 - $0.50 per mcfe

Net brokered gas marketing net expense:

$0 - $4 million

 

Full Year 2021 Price Guidance

 

Based on current market indications, Range expects to average the following price differentials for its production in 2021.

 

Natural Gas:(1)

NYMEX minus $0.28

Natural Gas Liquids (including ethane):(2)

Mont Belvieu plus $1.00 to $2.00 per barrel

Oil/Condensate:

WTI minus $7.00 to $9.00

 

(1) Including basis hedging

(2) Weighting based on 53% ethane, 27% propane, 7% normal butane, 4% iso-butane and 9% natural gasoline.

 

 

Hedging Status and Divestiture Contingent Payments

 

Range hedges portions of its expected future production volumes to increase the predictability of cash flow and to help maintain a strong, flexible financial position. As of October 20, 2021, Range had approximately 65% of its fourth quarter 2021 net revenue hedged and less than 50% of its expected calendar 2022 net revenue hedged. Since Range’s July update, the average floor and ceiling prices on incremental 2022 natural gas hedges were $3.76 and $4.19, respectively. For additional information, please see the detailed hedging schedule posted on the Range website under Investor Relations - Financial Information.

 

Range also hedges basis for natural gas and NGL volumes to limit volatility between published pricing benchmarks and regional sales prices. The combined fair value of the natural gas basis, NGL freight and spread hedges as of September 30, 2021 was a net gain of $9 million.

 

Range is entitled to receive contingent consideration from last year’s sale of North Louisiana assets. The remaining contingent consideration of up to $75.0 million is based on future achievement of natural gas and oil prices based on published indexes and realized NGLs prices of the buyer for the years 2021, 2022 and 2023. At the end of third quarter, the fair value of the potential payments was $50.2 million, an increase of $12.9 million compared to last quarter.

 

 

Conference Call Information

 

A conference call to review the financial results is scheduled on Wednesday, October 27 at 9:00 a.m. ET. To participate in the call, please dial (877) 928-8777 and provide conference code 4709989 about 10 minutes prior to the scheduled start time.

 

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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 November 26.

 

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). The Company provides additional comparative information on prior periods along with non-GAAP revenue disclosures on its website.

 

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 line in the statement of operations 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 quarterly report on Form 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.

 

RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading U.S. independent natural gas and NGL producer with operations focused on stacked-pay projects 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 herein 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

5


 

and demand, improving 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 declines or drilling cost increases. 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 Contacts:

 

Laith Sando, Vice President – Investor Relations

817-869-4267

lsando@rangeresources.com

 

 

Range Media Contacts:

 

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

 

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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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

 

2020

 

 

 

%

 

 

 

2021

 

 

 

2020

 

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues and other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas, NGLs and oil sales (a)

$

849,305

 

 

$

381,553

 

 

 

 

 

 

$

2,074,507

 

 

$

1,162,907

 

 

 

 

 

Derivative fair value (loss) income

 

(652,220

)

 

 

(124,690

)

 

 

 

 

 

 

(959,782

)

 

 

102,182

 

 

 

 

 

Brokered natural gas, marketing and other (b)

 

105,312

 

 

 

42,153

 

 

 

 

 

 

 

247,337

 

 

 

103,851

 

 

 

 

 

ARO settlement loss (b)

 

(3

)

 

 

(6

)

 

 

 

 

 

 

(3

)

 

 

(18

)

 

 

 

 

Other (b)

 

245

 

 

 

335

 

 

 

 

 

 

 

1,334

 

 

 

889

 

 

 

 

 

Total revenues and other income

 

302,639

 

 

 

299,345

 

 

 

1

%

 

 

1,363,393

 

 

 

1,369,811

 

 

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct operating

 

19,926

 

 

 

19,589

 

 

 

 

 

 

 

56,667

 

 

 

75,134

 

 

 

 

 

Direct operating – stock-based compensation (c)

 

319

 

 

 

(74

)

 

 

 

 

 

 

986

 

 

 

810

 

 

 

 

 

Transportation, gathering, processing and compression

 

296,510

 

 

 

268,108

 

 

 

 

 

 

 

853,684

 

 

 

831,748

 

 

 

 

 

Production and ad valorem taxes

 

7,140

 

 

 

6,106

 

 

 

 

 

 

 

20,179

 

 

 

20,682

 

 

 

 

 

Brokered natural gas and marketing

 

105,392

 

 

 

47,643

 

 

 

 

 

 

 

245,838

 

 

 

117,847

 

 

 

 

 

Brokered natural gas and marketing –

    stock-based compensation (c)

 

446

 

 

 

324

 

 

 

 

 

 

 

1,339

 

 

 

905

 

 

 

 

 

Exploration

 

5,513

 

 

 

7,897

 

 

 

 

 

 

 

15,331

 

 

 

22,299

 

 

 

 

 

Exploration – stock-based compensation (c)

 

368

 

 

 

189

 

 

 

 

 

 

 

1,116

 

 

 

891

 

 

 

 

 

Abandonment and impairment of unproved properties

 

2,000

 

 

 

5,667

 

 

 

 

 

 

 

7,206

 

 

 

16,604

 

 

 

 

 

General and administrative

 

31,398

 

 

 

31,209

 

 

 

 

 

 

 

90,300

 

 

 

92,552

 

 

 

 

 

General and administrative – stock-based compensation (c)

 

9,845

 

 

 

6,863

 

 

 

 

 

 

 

28,632

 

 

 

24,071

 

 

 

 

 

General and administrative – lawsuit settlements

 

7,818

 

 

 

81

 

 

 

 

 

 

 

8,375

 

 

 

1,672

 

 

 

 

 

General and administrative – bad debt expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

400

 

 

 

 

 

Exit and termination costs

 

11,789

 

 

 

519,613

 

 

 

 

 

 

 

9,557

 

 

 

531,505

 

 

 

 

 

Exit and termination costs – stock-based compensation (c)

 

 

 

 

2,020

 

 

 

 

 

 

 

 

 

 

2,020

 

 

 

 

 

Deferred compensation plan (d)

 

34,278

 

 

 

6,237

 

 

 

 

 

 

 

89,551

 

 

 

10,287

 

 

 

 

 

Interest expense

 

54,483

 

 

 

45,866

 

 

 

 

 

 

 

164,039

 

 

 

137,812

 

 

 

 

 

Interest expense – amortization of deferred financing costs (c)

 

2,326

 

 

 

2,133

 

 

 

 

 

 

 

6,935

 

 

 

6,329

 

 

 

 

 

Loss (gain) on early extinguishment of debt

 

 

 

 

7,821

 

 

 

 

 

 

 

98

 

 

 

(14,093

)

 

 

 

 

Depletion, depreciation and amortization

 

93,116

 

 

 

96,167

 

 

 

 

 

 

 

272,128

 

 

 

303,779

 

 

 

 

 

Impairment of proved property

 

 

 

 

1,955

 

 

 

 

 

 

 

 

 

 

78,955

 

 

 

 

 

(Gain) loss on sale of assets

 

(78

)

 

 

9,230

 

 

 

 

 

 

 

(724

)

 

 

(112,443

)

 

 

 

 

Total costs and expenses

 

682,589

 

 

 

1,084,644

 

 

 

-37

%

 

 

1,871,237

 

 

 

2,149,766

 

 

 

-13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(379,950

)

 

 

(785,299

)

 

 

-52

%

 

 

(507,844

)

 

 

(779,955

)

 

 

-35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

4,484

 

 

 

 

 

 

 

 

 

 

7,221

 

 

 

(366

)

 

 

 

 

Deferred

 

(34,167

)

 

 

(36,509

)

 

 

 

 

 

 

(35,477

)

 

 

(29,411

)

 

 

 

 

 

 

(29,683

)

 

 

(36,509

)

 

 

 

 

 

 

(28,256

)

 

 

(29,777

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(350,267

)

 

$

(748,790

)

 

 

-53

%

 

$

(479,588

)

 

$

(750,178

)

 

 

-36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(1.44

)

 

$

(3.12

)

 

 

 

 

 

$

(1.98

)

 

$

(3.10

)

 

 

 

 

Diluted

$

(1.44

)

 

$

(3.12

)

 

 

 

 

 

$

(1.98

)

 

$

(3.10

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, as reported:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

243,311

 

 

 

239,895

 

 

 

1

%

 

 

242,692

 

 

 

241,770

 

 

 

0

%

Diluted

 

243,311

 

 

 

239,895

 

 

 

1

%

 

 

242,692

 

 

 

241,770

 

 

 

0

%

(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.

 

 

7


 

RANGE RESOURCES CORPORATION

BALANCE SHEETS

 

 

 

 

 

 

 

(In thousands)

 

September 30,

 

 

 

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

(Unaudited)

 

 

 

(Audited)

 

Assets

 

 

 

 

 

 

 

Current assets

$

384,210

 

 

$

266,508

 

Derivative assets

 

53,663

 

 

 

40,012

 

Natural gas and oil properties, successful efforts method

 

5,737,956

 

 

 

5,686,809

 

Transportation and field assets

 

3,433

 

 

 

4,161

 

Operating lease right-of-use assets

 

46,543

 

 

 

63,581

 

Other

 

78,384

 

 

 

75,865

 

 

$

6,304,189

 

 

$

6,136,936

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities

$

954,353

 

 

$

673,445

 

Asset retirement obligations

 

6,689

 

 

 

6,689

 

Derivative liabilities

 

685,285

 

 

 

26,707

 

 

 

 

 

 

 

 

 

Bank debt

 

23,976

 

 

 

693,123

 

Senior notes

 

2,706,495

 

 

 

2,329,745

 

Senior subordinated notes

 

 

 

 

17,384

 

Total debt

 

2,730,471

 

 

 

3,040,252

 

 

 

 

 

 

 

 

 

Deferred tax liability

 

99,855

 

 

 

135,267

 

Derivative liabilities

 

85,436

 

 

 

9,746

 

Deferred compensation liability

 

112,235

 

 

 

81,481

 

Operating lease liabilities

 

27,839

 

 

 

43,155

 

Asset retirement obligations and other liabilities

 

86,247

 

 

 

91,157

 

Divestiture contract obligation

 

334,495

 

 

 

391,502

 

 

 

 

 

 

 

 

 

Common stock and retained earnings

 

1,211,559

 

 

 

1,668,146

 

Other comprehensive loss

 

(268

)

 

 

(479

)

Common stock held in treasury stock

 

(30,007

)

 

 

(30,132

)

Total stockholders’ equity

 

1,181,284

 

 

 

1,637,535

 

 

$

6,304,189

 

 

$

6,136,936

 

 

RECONCILIATION OF TOTAL REVENUES AND OTHER INCOME TO TOTAL REVENUE EXCLUDING CERTAIN ITEMS, a non-GAAP measure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

 

2020

 

 

 

%

 

 

 

2021

 

 

 

2020

 

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues and other income, as reported

$

302,639

 

 

$

299,345

 

 

 

1

%

 

$

1,363,393

 

 

$

1,369,811

 

 

 

-1

%

Adjustment for certain special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total change in fair value related to derivatives
prior to settlement loss

 

492,763

 

 

 

210,504

 

 

 

 

 

 

 

720,617

 

 

 

203,061

 

 

 

 

 

ARO settlement loss

 

3

 

 

 

6

 

 

 

 

 

 

 

3

 

 

 

18

 

 

 

 

 

Total revenues, as adjusted, non-GAAP

$

795,405

 

 

$

509,855

 

 

 

56

%

 

$

2,084,013

 

 

$

1,572,890

 

 

 

33

%

 

 

8


 

RANGE RESOURCES CORPORATION

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited in thousands)