8-K
false000031585200003158522022-02-222022-02-22

 

 

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): February 23, 2022 (February 22, 2022)

 

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 February 22, 2022 Range Resources Corporation issued a press release announcing its 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 February 22, 2022

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: February 23, 2022

 

 

 

 

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EX-99.1

 

EXHIBIT 99.1

NEWS RELEASE

Range Announces Fourth Quarter 2021 Results, 2022 Guidance, Reinstatement of Dividend and

Authorization of $500 Million Share Repurchase Program

FORT WORTH, TEXAS, FEBRUARY 22, 2022…RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its fourth quarter 2021 financial results and plans for 2022.

 

Fourth Quarter and Full-Year 2021 Highlights –

 

Reduced net debt in 2021 by $379 million compared to year-end 2020
All-in 2021 capital spending was $414 million, approximately $11 million less than original budget
2021 daily production averaged 2.13 Bcfe per day
2021 NGL realizations averaged a premium of $1.18 per barrel above Mont Belvieu, a Company record
2021 Direct Operating Expense averaged less than $0.10 per mcfe, a Company record
Realized maximum payout of $29.5 million from contingent derivative based on 2021 commodity prices
PV10 of year-end proved reserves of $12.7 billion, or approximately $40 per share net of debt, assuming NYMEX strip prices at year-end 2021

 

2022 Guidance and Return of Capital Highlights –

 

Annual cash dividend of $0.32 per share ($0.08 quarterly), or an approximate 1.5% dividend yield based on recent share price, expected to begin in second half 2022
Authorization of $500 million share repurchase program, or approximately 10% of outstanding shares based on recent market capitalization, effective immediately
2022 capital budget of $460 to $480 million maintains production at 2.12 to 2.16 Bcfe per day, or approximately $0.60 per mcfe, best in Appalachia
2022 well costs expected to average $625 per lateral foot or less, lowest in Appalachia
Free cash flow forecasted to exceed $1 billion in 2022 based on recent strip pricing
Leverage, defined as Net-Debt-to-EBITDAX, forecasted at approximately 1.0x at year-end 2022 based on recent strip pricing

 

Commenting on the results and 2022 plans, Jeff Ventura, the Company’s CEO said, “During 2021, Range generated significant free cash flow, reduced debt, refinanced near-term maturities, lowered well costs, expanded cash margins and delivered our operational plan safely and for less than budgeted. These results reflect the organization’s continuing focus on capital discipline and further strengthening our financial position as we develop the most prolific natural gas and NGL play in North America. In 2022, we expect to build upon these achievements, generating over $1 billion of free cash flow at recent strip pricing. Range’s improved financial positioning supports our plan to reinstate our dividend program with a yield that is competitive with the broader market, in addition to authorizing a share repurchase program. Given that our equity is currently valued at approximately one-half of proved reserve value, which excludes any value attributable to multiple decades of core inventory, we believe that share repurchases provide an excellent opportunity to create significant, long-term shareholder value. We look forward to the year ahead, as we generate significant free cash flow, further strengthen our balance sheet, return capital to shareholders and maintain our leadership position on environmental efforts.”

 

Reinstatement of Cash Dividend

 

Range’s Board of Directors has approved the reinstatement of the Company’s regular quarterly cash dividend, with payments expected to start in the second half of 2022, at an anticipated annual dividend rate of $0.32 per share of the Company’s common stock ($0.08 per quarter). Details regarding the record and payment dates for quarterly dividends will be announced as each quarterly dividend is formally declared by the Board.

 


 

Authorization of $500 Million Share Repurchase Program

 

Range’s Board of Directors approved an expansion of the Company’s share repurchase program with $500 million available and effective immediately. This repurchase program, which is equivalent to approximately 10% of Range’s market capitalization, is expected to be funded with free cash flow generation.

 

As deemed appropriate by Range management, Range may repurchase shares in the open market from time to time, or in privately negotiated transactions, in compliance with SEC rules and federal securities laws. The authorization under the program does not have a stated expiration date. The repurchase program does not obligate Range to acquire any particular amount of common stock and, in Range’s discretion, it may be modified or discontinued at any time.

 

Financial Discussion

 

Except for generally accepted accounting principles (“GAAP”) reported amounts, specific expense categories exclude non-cash impairments, unrealized mark-to-market adjustment on derivatives, non-cash stock compensation and other items shown separately on the attached tables. “Unit costs” as used in this release are composed of direct operating, transportation, gathering, processing and compression, 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.

 

Capital Expenditures

 

Fourth quarter 2021 drilling and completions expenditures were $83.7 million and $8.6 million was invested in acreage and gathering facilities. Total 2021 capital expenditures were $414 million, including $388 million on drilling and completion, and a combined $26 million on acreage, gas gathering systems and other investments.

 

Financial Position

 

In 2021, Range reduced net debt by $379 million. As of December 31, 2021, Range had total debt outstanding of $2.95 billion and $214 million of cash on hand. This was the Company’s fourth consecutive year of debt reduction. Range had zero borrowings under its credit facility as of year-end 2021, providing liquidity in excess of $2 billion.

 

In fourth quarter 2021, Range realized a total of $29.5 million in contingent derivative settlement gains related to the North Louisiana divestiture. This represents the maximum amount that Range could receive pertaining to 2021 commodity prices, and Range expects to receive the cash proceeds in the first half of 2022. Range has the potential to receive an additional $45.5 million in contingent payments based on natural gas, NGL and oil prices in 2022 and 2023. At year-end 2021, the fair value of these remaining contingent payments was approximately $26.6 million.

 

In January 2022, Range issued $500 million aggregate principal amount of 4.75% senior notes due 2030 and used proceeds and cash on hand to redeem all outstanding 9.25% senior notes due 2026. As a result, Range’s interest expense is expected to improve by 25% year-over-year in 2022 to an approximate $0.21 per mcfe annual midpoint average.

 

Fourth Quarter 2021 Results

 

GAAP revenues for fourth quarter 2021 totaled $1.57 billion, GAAP net cash provided from operating activities (including changes in working capital) was $318 million, and GAAP net income was $891 million ($3.47 per diluted share). Fourth quarter earnings results include a $310 million mark-to-market derivative gain due to decreases in commodity prices.

 

Non-GAAP revenues for fourth quarter 2021 totaled $976 million, and cash flow from operations before changes in working capital, a non-GAAP measure, was $424 million. Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $242 million ($0.96 per diluted share) in fourth quarter 2021.

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The following table details Range’s fourth quarter 2021 unit costs per mcfe(a):

 

Expenses

 

4Q 2021

(per mcfe)

 

3Q 2021

(per mcfe)

 

 

 Increase (Decrease)

 

 

 

 

 

 

 

 

Direct operating

 

$ 0.09

 

$ 0.10

 

 

(10%)

Transportation, gathering,

    processing and compression

 

    1.59

 

    1.51

 

 

5%

Production and ad valorem taxes

 

    0.05

 

    0.04

 

 

25%

General and administrative(a)

 

    0.15

 

    0.16

 

 

(6%)

Interest expense(a)

 

    0.27

 

    0.28

 

 

(4%)

        Total cash unit costs(b)

 

    2.14

 

    2.08

 

 

3%

Depletion, depreciation and

    amortization (DD&A)

 

    0.46

 

    0.47

 

 

(2%)

        Total unit costs plus DD&A(b)

 

$ 2.59

 

$ 2.56

 

 

1%

 

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

 

The following table details Range’s average production and realized pricing for fourth quarter 2021:

 

 

4Q21 Production & Realized Pricing

 

 

Natural Gas

(Mcf)

 

Oil (Bbl)

 

NGLs

(Bbl)

 

Natural Gas

Equivalent (Mcfe)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net production per day

 

1,533,609

 

8,674

 

102,126

 

2,198,413

 

 

 

 

 

 

 

 

 

Average NYMEX price

 

$ 5.82

 

$ 77.02

 

$ 36.44

 

 

Differential, including basis hedging

 

(0.44)

 

(6.95)

 

(0.18)

 

 

Realized prices before NYMEX hedges

 

5.38

 

70.07

 

36.26

 

$ 5.71

Settled NYMEX hedges

 

(2.11)

 

(17.51)

 

(1.48)

 

   (1.61)

Average realized prices after hedges

 

$ 3.27

 

$ 52.56

 

$ 34.77

 

$ 4.10

 

Fourth quarter 2021 natural gas, NGLs and oil price realizations (including the impact of cash-settled hedges and derivative settlements) averaged $4.10 per mcfe.

 

The average natural gas price, including the impact of basis hedging, was $5.38 per mcf, or a ($0.44) per mcf differential to NYMEX. This represents the highest quarterly pre-hedge natural gas realization since 2014. In addition, Range realized a contingent derivative settlement gain of $20 million related to natural gas prices in 2021.

 

Crude oil and condensate price realizations, before realized hedges, averaged $70.07 per barrel, or $6.95 below WTI (West Texas Intermediate). This represents the highest quarterly pre-hedge condensate realization since 2014. In addition, Range realized a contingent derivative settlement gain of $3.5 million related to WTI prices in 2021.

 

Pre-hedge NGL realizations were $36.26 per barrel, an improvement of $2.21 per barrel versus the third quarter of 2021 and approximately 47% of WTI. This represents the highest quarterly pre-hedge NGL

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realization since 2013. In addition, Range realized a contingent derivative settlement gain of $6 million related to NGL prices in 2021.

 

2021 Proved Reserves

 

Summary of Changes in Proved Reserves

(in Bcfe)

 

 

Balance at December 31, 2020

 17,203

 

 

   Extensions, discoveries and additions

1,603

   Performance revisions

134

   Locations re-entered to development plan

913

   Reclassification of PUD to unproved under SEC 5-year rule

(1,323)

   Price revisions

23

   Production

 (778)

 

 

Balance at December 31, 2021

 17,775

 

 

As shown in the table below, the present value (PV10) of reserves under SEC methodology was $14.9 billion at December 31, 2021. For comparison, the PV10 using year-end 2021 NYMEX strip average prices of $3.27 per Mmbtu for natural gas and $60.76 per barrel of oil would have been $12.7 billion, assuming the same proven reserve volumes.

 

 

 

 

2021 SEC Reserve

Pricing(a)

Year-End 2021 Strip Price(b)

 

 

 

Natural Gas Price ($/Mmbtu)

$3.60

$3.27

WTI Oil Price ($/Bbl)

$66.34

$60.76

 

 

 

Proved Reserves PV10 ($ billions)

$14.9

$12.7

 

(a)
Average realized prices for estimating year-end 2021 reserves and PV10 were $3.30 per mcf, $59.35 per barrel of crude oil and $28.41 per barrel of NGLs. Updated from prior press release.
(b)
Average realized prices for calculating PV10, based on year-end strip pricing, were $3.09 per mcf, $53.40 per barrel of crude oil and $25.63 per barrel of NGLs. Updated from prior press release.

 

Year-end 2021 reserves included 7.4 Tcfe of proved undeveloped reserves from 360 wells planned to be developed within the next five years with an expected development cost of $0.29 per mcfe. Beyond the five-year reserve calculation window, Range has thousands of high-quality wells in the Marcellus, Utica and Upper Devonian horizons.

 

2022 Capital Program and Guidance

 

Range’s 2022 all-in capital budget is expected to be $460 to $480 million. The capital budget includes approximately $425 to $445 million for drilling and recompletions, and $35 million for leasehold and other investments. The Company expects to turn to sales 54 Marcellus wells in southwest Pennsylvania and nine Marcellus wells in northeast Pennsylvania, which offer compelling returns at strip pricing, as the Company utilizes existing infrastructure. The longest laterals in Range’s 2022 program are in the liquids-rich acreage, with 56% of the lateral feet turned to sales expected in the liquids window.

 

 

The table below summarizes expected 2022 activity and 2021 regarding the number of wells to sales in each area.

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Planned Wells TIL in 2022

 

Wells TIL in 2021

 

 

 

 

 

SW PA Super-Rich

 

7

 

17

SW PA Wet

 

21

 

20

SW PA Dry

 

26

 

31

NE PA Dry

 

9

 

     Total Appalachia

 

63

 

68

 

In 2021, Range turned to sales 68 wells across its southwest Pennsylvania acreage. This exceeded prior guidance of 60 TILs in 2021, which is the result of efficiency gains that allowed eight wells to be pulled into late December 2021 that were originally planned for early 2022.

 

The development plan for 2022 is consistent with 2021 as Range is targeting a maintenance program, holding 2021 production approximately flat with annual average production of 2,120 – 2,160 Mmcfe per day. Range’s production guidance incorporates planned third-party downstream maintenance that affects Range’s first half 2022 production by approximately 40 Mmcfe per day and weather-related downtime in February that affected first quarter 2022 by approximately 35 Mmcfe per day. Despite these transient delays, Range is expecting to deliver maintenance production at a capital cost of approximately $0.60 per mcfe, which is expected to be the most efficient program in Appalachia.

 

Based on recent strip pricing, Range expects pre-hedge NGL price realizations to increase by approximately $5 per barrel in 2022 versus the 2021 average, resulting in an increase of approximately $180 million in annual pre-hedge revenue. As previously disclosed, these higher realized NGL prices will result in slightly higher processing costs, as Range’s processing costs are based on the price received. Net of price-linked processing costs, the increase in forecasted NGL prices is expected to add approximately $140 million in cash flow versus 2021, demonstrating continued strong margin expansion with rising NGL prices. Additionally, in 2022, Range’s gathering costs are expected to improve by approximately $25 million versus 2021, driven by contractual declines in Range’s gathering fees, while contracted gathering capacity remains the same. The decline in gathering costs largely offsets the aforementioned increase in processing costs, such that Range’s 2022 GP&T expense guidance of $1.52 to $1.56 per mcfe is approximately in-line with 2021 GP&T expense per mcfe, despite higher NGL prices. Range expects an additional $25 million in gathering expense savings in 2023 and annual savings of more than $100 million by 2030 when compared to 2021 levels.

 

Guidance – 2022

 

Capital & Production Guidance

 

Range is targeting a maintenance program in 2022, holding production approximately flat at 2.12 – 2.16 Bcfe per day, with ~30% attributed to liquids production. Range’s 2022 all-in capital budget is $460 million - $480 million.

 

Full Year 2022 Expense Guidance

 

Direct operating expense:

$0.09 ― $0.11 per mcfe

Transportation, gathering, processing and compression expense:

$1.52 ― $1.56 per mcfe

Production tax expense:

$0.03 ― $0.05 per mcfe

Exploration expense:

$22 ― $28 million

G&A expense:

$0.15 ― $0.17 per mcfe

Interest expense:

$0.20 ― $0.22 per mcfe

DD&A expense:

$0.46 ― $0.50 per mcfe

Net brokered gas marketing expense:

$8 ― $14 million

 

 

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Full Year 2022 Price Guidance

 

Based on recent market indications, Range expects to average the following price differentials for its production in 2022.

 

Natural Gas:(1)

NYMEX minus $0.35 to $0.45

Natural Gas Liquids (including ethane):(2)

Mont Belvieu plus $0.00 to $2.00 per barrel

Oil/Condensate:

WTI minus $6.00 to $8.00

 

(1) Including basis hedging

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

 

Hedging Status

 

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. In aggregate, Range has approximately 50% of its expected 2022 net revenue hedged. Please see the detailed hedging schedule posted on the Range website under Investor Relations - Financial Information.

 

Range has also hedged Marcellus and other basis differentials for natural gas and NGL exports to limit volatility between benchmarks and regional prices. The combined fair value of the natural gas basis, NGL freight and spread hedges as of December 31, 2021 was a net gain of $16.2 million.

 

Conference Call Information

 

A conference call to review the financial results is scheduled on Wednesday, February 23 at 9:00 a.m. ET. To participate in the call, please dial (877) 928-8777 and provide conference code 7986479 about 10 minutes prior to the scheduled start time.

 

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 March 22.

 

Non-GAAP Financial Measures

 

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

 

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

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activities as an indicator of cash flows, or as a measure of liquidity. A table is included which reconciles net cash provided by operations to cash flow from operations before changes in working capital as used in this release. On its website, the Company provides additional comparative information on prior periods for cash flow, cash margins and non-GAAP earnings as used in this release.

 

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

 

The Company discloses in this release the detailed components of many of the single line items shown in the GAAP financial statements included in the Company’s Annual Report on Form 10-K. The Company believes that it is important to furnish this detail of the various components comprising each line of the Statements of Operations to better inform the reader of the details of each amount, the changes between periods and the effect on its financial results.

 

We believe that the presentation of PV10 is relevant and useful to our investors as supplemental disclosure to the standardized measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our proved reserves before taking into account future corporate income taxes and our current tax structure. While the standardized measure is dependent on the unique tax situation of each company, PV10 is based on prices and discount factors that are consistent for all companies. Because of this, PV10 can be used within the industry and by creditors and security analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis.

 

RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading U.S. independent natural gas and NGL producer with operations focused 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 within regarding activities, events or developments the Company expects, believes or anticipates will or may occur in the future, such as those regarding future well costs, expected asset sales, well productivity, future liquidity and financial resilience, anticipated exports and related financial impact, NGL market supply and demand, 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

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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-K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

%

 

 

 

2021

 

 

 

2020

 

 

 

%

 

Revenues and other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas, NGLs and oil sales (a)

$

1,140,520

 

 

$

444,806

 

 

 

 

 

 

$

3,215,027

 

 

$

1,607,713

 

 

 

 

 

Derivative fair value income (loss)

 

309,566

 

 

 

85,529

 

 

 

 

 

 

 

(650,216

)

 

 

187,711

 

 

 

 

 

Brokered natural gas, marketing and other (b)

 

116,692

 

 

 

67,771

 

 

 

 

 

 

 

364,029

 

 

 

171,622

 

 

 

 

 

ARO settlement loss (b)

 

 

 

 

(4

)

 

 

 

 

 

 

(3

)

 

 

(22

)

 

 

 

 

Other (b)

 

52

 

 

 

784

 

 

 

 

 

 

 

1,386

 

 

 

1,673

 

 

 

 

 

Total revenues and other income

 

1,566,830

 

 

 

598,886

 

 

 

162

%

 

 

2,930,223

 

 

 

1,968,697

 

 

 

49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct operating

 

17,310

 

 

 

15,945

 

 

 

 

 

 

 

73,977

 

 

 

91,079

 

 

 

 

 

Direct operating – stock-based compensation (c)

 

324

 

 

 

268

 

 

 

 

 

 

 

1,310

 

 

 

1,078

 

 

 

 

 

Transportation, gathering, processing and compression

 

320,785

 

 

 

256,742

 

 

 

 

 

 

 

1,174,469

 

 

 

1,088,490

 

 

 

 

 

Production and ad valorem taxes

 

9,138

 

 

 

3,935

 

 

 

 

 

 

 

29,317

 

 

 

24,617

 

 

 

 

 

Brokered natural gas and marketing

 

119,656

 

 

 

69,053

 

 

 

 

 

 

 

365,494

 

 

 

186,900

 

 

 

 

 

Brokered natural gas and marketing – stock-based

   compensation (c)

 

455

 

 

 

511

 

 

 

 

 

 

 

1,794

 

 

 

1,416

 

 

 

 

 

Exploration

 

6,717

 

 

 

9,076

 

 

 

 

 

 

 

22,048

 

 

 

31,375

 

 

 

 

 

Exploration – non-cash stock-based compensation (c)

 

391

 

 

 

388

 

 

 

 

 

 

 

1,507

 

 

 

1,279

 

 

 

 

 

Abandonment and impairment of unproved properties

 

 

 

 

2,730

 

 

 

 

 

 

 

7,206

 

 

 

19,334

 

 

 

 

 

General and administrative

 

30,708

 

 

 

31,307

 

 

 

 

 

 

 

121,008

 

 

 

123,859

 

 

 

 

 

General and administrative – stock-based compensation (c)

 

11,041

 

 

 

8,834

 

 

 

 

 

 

 

39,673

 

 

 

32,905

 

 

 

 

 

General and administrative – lawsuit settlements

 

510

 

 

 

579

 

 

 

 

 

 

 

8,885

 

 

 

2,251

 

 

 

 

 

General and administrative – bad debt expense

 

200

 

 

 

 

 

 

 

 

 

 

200

 

 

 

400

 

 

 

 

 

Exit and termination costs

 

12,104

 

 

 

13,739

 

 

 

 

 

 

 

21,661

 

 

 

545,244

 

 

 

 

 

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

 

 

 

 

145

 

 

 

 

 

 

 

 

 

 

2,165

 

 

 

 

 

Deferred compensation plan (d)

 

(21,200

)

 

 

2,254

 

 

 

 

 

 

 

68,351

 

 

 

12,541

 

 

 

 

 

Interest expense

 

54,004

 

 

 

46,389

 

 

 

 

 

 

 

218,043

 

 

 

184,201

 

 

 

 

 

Interest expense – amortization of deferred financing costs (e)

 

2,358

 

 

 

2,137

 

 

 

 

 

 

 

9,293

 

 

 

8,466

 

 

 

 

 

Gain on early extinguishment of debt

 

 

 

 

25

 

 

 

 

 

 

 

98

 

 

 

(14,068

)

 

 

 

 

Depletion, depreciation and amortization

 

92,427

 

 

 

90,551

 

 

 

 

 

 

 

364,555

 

 

 

394,330

 

 

 

 

 

Impairment of proved property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

78,955

 

 

 

 

 

Loss (gain) on sale of assets

 

23

 

 

 

1,652

 

 

 

 

 

 

 

(701

)

 

 

(110,791

)

 

 

 

 

Total costs and expenses

 

656,951

 

 

 

556,260

 

 

 

18

%

 

 

2,528,188

 

 

 

2,706,026

 

 

 

-7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

909,879

 

 

 

42,626

 

 

 

2035

%

 

 

402,035

 

 

 

(737,329

)

 

 

155

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

763

 

 

 

(157

)

 

 

 

 

 

 

7,984

 

 

 

(523

)

 

 

 

 

Deferred

 

17,750

 

 

 

4,382

 

 

 

 

 

 

 

(17,727

)

 

 

(25,029

)

 

 

 

 

 

 

18,513

 

 

 

4,225

 

 

 

 

 

 

 

(9,743

)

 

 

(25,552

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

891,366

 

 

$

38,401

 

 

 

2221

%

 

$

411,778

 

 

$

(711,777

)

 

 

158

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

3.57

 

 

$

0.16

 

 

 

 

 

 

$

1.65

 

 

$

(2.95

)

 

 

 

 

Diluted

$

3.47

 

 

$

0.15

 

 

 

 

 

 

$

1.61

 

 

$

(2.95

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, as reported:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

243,369

 

 

 

240,174

 

 

 

1

%

 

 

242,862

 

 

 

241,373

 

 

 

1

%

Diluted

 

250,441

 

 

 

246,286

 

 

 

2

%

 

 

249,314

 

 

 

241,373

 

 

 

3

%

(a) See separate natural gas, NGLs and oil sales information table.

(b) Included in Brokered natural gas, marketing and other revenues in the 10-K.

(c) Costs associated with stock compensation and restricted stock amortization, which have been reflected in the categories associated

9


 

with the direct personnel costs, which are combined with the cash costs in the 10-K.

(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-K.

 

 

RANGE RESOURCES CORPORATION

BALANCE SHEETS

 

 

 

 

 

 

 

(In thousands)

 

December 31,

 

 

 

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

(Audited)

 

 

 

(Audited)

 

Assets

 

 

 

 

 

 

 

Current assets

$

730,927

 

 

$

266,508

 

Derivative assets

 

44,339

 

 

 

40,012

 

Natural gas and oil properties, successful efforts method

 

5,754,656

 

 

 

5,686,809

 

Transportation and field assets

 

3,494

 

 

 

4,161

 

Operating lease right-of-use assets

 

40,832

 

 

 

63,581

 

Other

 

86,259

 

 

 

75,865

 

 

$

6,660,507

 

 

$

6,136,936

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities

$

984,388

 

 

$

673,445

 

Asset retirement obligations

 

5,310

 

 

 

6,689

 

Derivative liabilities

 

162,767

 

 

 

26,707

 

 

 

 

 

 

 

 

 

Bank debt

 

 

 

 

693,123

 

Senior notes

 

2,707,770

 

 

 

2,329,745

 

Senior subordinated notes

 

 

 

 

17,384

 

Total debt

 

2,707,770

 

 

 

3,040,252

 

 

 

 

 

 

 

 

 

Deferred tax liability

 

117,642

 

 

 

135,267

 

Derivative liabilities

 

8,216

 

 

 

9,746

 

Deferred compensation liability

 

137,102

 

 

 

81,481

 

Operating lease liabilities

 

24,861

 

 

 

43,155

 

Asset retirement obligations and other liabilities

 

101,509

 

 

 

91,157

 

Divestiture contract obligation

 

325,279

 

 

 

391,502

 

 

 

 

 

 

 

 

 

Common stock and retained earnings

 

2,115,820

 

 

 

1,668,146

 

Other comprehensive loss

 

(150

)

 

 

(479

)

Common stock held in treasury stock

 

(30,007

)

 

 

(30,132

)

Total stockholders’ equity

 

2,085,663

 

 

 

1,637,535

 

 

$

6,660,507

 

 

$

6,136,936

 

 

 

10


 

RANGE RESOURCES CORPORATION

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

 

 

 

(Unaudited, in thousands)

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

%

 

 

 

2021

 

 

 

2020

 

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues and other income, as reported

$

1,566,830

 

 

$

598,886

 

 

 

162

%

 

$

2,930,223

 

 

$

1,968,697

 

 

 

49

%

Adjustment for certain special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total change in fair value related to derivatives
prior to settlement (gain) loss

 

(590,414

)

 

 

(68,143

)

 

 

 

 

 

 

130,203

 

 

 

134,918

 

 

 

 

 

ARO settlement loss

 

 

 

 

4

 

 

 

 

 

 

 

3

 

 

 

22

 

 

 

 

 

Total revenues, as adjusted, non-GAAP

$

976,416

 

 

$

530,747

 

 

 

84

%

 

$

3,060,429

 

 

$

2,103,637

 

 

 

46

%

 

 

 

 

 

11


 

RANGE RESOURCES CORPORATION

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited in thousands)