8-K
false000031585200003158522023-04-242023-04-24

 

 

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): April 25, 2023 (April 24, 2023)

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. ☐

 

 

1


 

ITEM 2.02 Results of Operations and Financial Condition

On April 24, 2023 Range Resources Corporation issued a press release announcing its first quarter 2023 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 April 24, 2023

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

2


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

RANGE RESOURCES CORPORATION

 

By:

/s/ Mark S. Scucchi

 

Mark S. Scucchi

 

Executive Vice President and Chief Financial Officer

Date: April 24, 2023

 

 

 

 

3


EX-99

Exhibit 99.1

NEWS RELEASE

Range Announces First Quarter 2023 Results

FORT WORTH, TEXAS, April 24, 2023…RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its first quarter 2023 financial results.

 

First Quarter 2023 Highlights –

 

Cash flow from operating activities of $475 million
Cash flow from operations, before working capital changes, of $400 million
Capital spending was $152 million, approximately 26% of the 2023 budget
Repurchased 400,000 shares at an average of $24.16 per share
Accumulated cash balance of $228 million
Price realizations including hedges of $4.00 per mcfe – premium of $0.54 over NYMEX natural gas
NGL realizations of $27.60 per barrel – premium of $1.63 over Mont Belvieu equivalent
Natural gas differentials, including basis hedging, averaged ($0.14) per mcf to NYMEX
Production averaged 2.14 Bcfe per day, approximately 70% natural gas

 

 

Commenting on the quarter, Jeff Ventura, the Company’s CEO said, “Today, Range is in the best operational and financial shape in Company history and the future of the Marcellus is bright as we sit at the very low end of the global cost curve with one of the lowest emissions intensities of any play. Range’s multi-decade inventory, efficient operations and access to diversified markets place our business in a desirable position to deliver significant long-term value and competitive returns to shareholders. The Range team remains focused on efficiently developing our Marcellus assets to bring that value to shareholders and I believe our first quarter results demonstrate continued success in achieving corporate objectives.”

 

 

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, taxes other than income, 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.

 

 

First Quarter 2023 Results

 

GAAP revenues for first quarter 2023 totaled $1.2 billion, GAAP net cash provided from operating activities (including changes in working capital) was $475 million, and GAAP net income was $481 million ($1.95 per diluted share). First quarter earnings results include a $368 million mark-to-market derivative gain due to decreases in commodity prices.

 

Non-GAAP revenues for first quarter 2023 totaled $853 million, and cash flow from operations before changes in working capital, a non-GAAP measure, was $400 million. Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $239 million ($0.99 per diluted share) in first quarter 2023.

 

 

 


 

The following table details Range’s first quarter 2023 unit costs per mcfe(a):

 

Expenses

 

1Q 2023

(per mcfe)

 

1Q 2022

(per mcfe)

 

 

Increase (Decrease)

 

 

 

 

 

 

 

 

Direct operating(a)

 

$ 0.14

 

$ 0.11

 

 

27%

Transportation, gathering,

    processing and compression(a)

 

1.48

 

1.60

 

 

(8%)

Taxes other than income

 

0.04

 

0.04

 

 

0%

General and administrative(a)

 

0.17

 

0.17

 

 

0%

Interest expense(a)

 

0.16

 

0.24

 

 

(33%)

        Total cash unit costs(b)

 

1.99

 

2.15

 

 

(7%)

Depletion, depreciation and

    amortization (DD&A)

 

0.45

 

0.46

 

 

(2%)

        Total unit costs plus DD&A(b)

 

$ 2.44

 

$ 2.61

 

 

(7%)

 

(a)
Excludes stock-based compensation, one-time settlements, and amortization of deferred financing costs.
(b)
Totals may not be exact due to rounding.

 

 

The following table details Range’s average production and realized pricing for first quarter 2023(a):

 

 

1Q23 Production & Realized Pricing

 

Natural Gas

(Mcf)

 

Oil (Bbl)

 

NGLs

(Bbl)

 

Natural Gas

Equivalent (Mcfe)

 

 

 

 

 

Net production per day

 

1,484,956

 

6,367

 

103,219

 

2,142,475

 

 

 

 

 

 

 

 

 

Average NYMEX price

$ 3.46

$76.07

$ 25.97

 

Differential, including basis hedging

  (0.14)

   (9.30)

1.63

 

Realized prices before NYMEX hedges

3.32

 

   66.77

 

   27.60

3.83

Settled NYMEX hedges

0.26

 

 (3.81)

 

 

0.17

Average realized prices after hedges

      $ 3.58

 

$ 62.96

 

$ 27.60

 

$ 4.00

 

(a)
Totals may not be exact due to rounding

 

First quarter 2023 natural gas, NGLs and oil price realizations (including the impact of cash-settled hedges and derivative settlements) averaged $4.00 per mcfe.

 

The average natural gas price, including the impact of basis hedging, was $3.32 per mcf, or a ($0.14) per mcf differential to NYMEX. The Company continues to expect an average 2023 natural gas differential versus NYMEX to be within a range of ($0.35) to ($0.45) per mcf.

 

Range’s pre-hedge NGL price for 1Q was $27.60 per barrel, approximately $1.63 above the Mont Belvieu weighted equivalent.

 

Crude oil and condensate price realizations, before realized hedges, averaged $66.77 per barrel, or $9.30 below WTI (West Texas Intermediate). Range continues to expect the 2023 condensate differential to average $9.00-$13.00 below WTI.

 

 

2


Share Buyback and Financial Position

 

During the first quarter, Range purchased 400,000 shares at an average price of approximately $24.16 per share. Range currently has approximately 241 million shares outstanding and $1.1 billion of availability on the share repurchase program.

 

As of March 31, 2023, Range had net debt outstanding of approximately $1.62 billion, consisting of $1.85 billion of senior notes and $228 million in cash.

 

Capital Expenditures and Operational Activity

 

First quarter 2023 drilling and completion expenditures were $139 million. In addition, during the quarter, approximately $12 million was invested in acreage leasehold and gathering systems. First quarter capital spending represented approximately 26% of Range’s total capital budget in 2023.

The table below summarizes expected 2023 activity regarding the number of wells to sales in each area.

 

 

 

 

Wells TIL

1Q 2023

 

2023

Planned TIL

 

Remaining

2023

SW PA Super-Rich

2

 

3

 

1

SW PA Wet

3

 

31

 

28

SW PA Dry

4

 

24

 

20

NE PA Dry

 

 

0

 

3

 

3

Total Wells

9

 

61

 

52

 

Guidance – 2023

 

Capital & Production Guidance

 

Range is targeting a maintenance program in 2023, resulting in approximately flat production at 2.12 – 2.16 Bcfe per day, with ~30% attributed to liquids production. Range’s 2023 all-in capital budget is $570 million - $615 million.

 

Updated Full Year 2023 Expense Guidance

 

Direct operating expense:

$0.11 — $0.13 per mcfe

Transportation, gathering, processing and compression expense:

$1.48 — $1.58 per mcfe

Taxes other than income:

$0.04 — $0.05 per mcfe

Exploration expense:

$22 — $28 million

G&A expense:

$0.17 — $0.19 per mcfe

Interest expense:

$0.14 — $0.16 per mcfe

DD&A expense:

$0.46 — $0.48 per mcfe

Net brokered gas marketing expense:

$8 — $10 million

 

2023 Price Guidance

 

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

 

FY 2023 Natural Gas:(1)

NYMEX minus $0.35 to $0.45

FY 2023 Natural Gas Liquids (including ethane):(2)

MB minus $1.00 to +$1.00 per barrel

FY 2023 Oil/Condensate:

WTI minus $9.00 to $13.00

 

(1) Including basis hedging

(2) Mont Belvieu-equivalent pricing based on weighting of 53% ethane, 27% propane, 8% normal butane, 4% iso-butane and 8% natural gasoline.

3


 

Hedging Status

 

Range hedges portions of its expected future production volumes to increase the predictability of cash flow and to help improve and maintain a strong, flexible financial position. 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 to limit volatility between benchmark and regional prices. The combined fair value of natural gas basis hedges as of March 31, 2023, was a net loss of $50.3 million.

 

Conference Call Information

 

A conference call to review the financial results is scheduled on Tuesday, April 25 at 8:00 AM Central Time (9:00 AM Eastern Time). Please click here to pre-register for the conference call and obtain a dial in number with passcode.

 

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 May 25th.

 

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 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

4


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 or Quarterly Reports on Form 10-K or 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.

We believe that the presentation of PV10 value of our proved reserves is a relevant and useful metric for 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 credit 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 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

5


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 Contact:

 

Laith Sando, Vice President – Investor Relations

817-869-4267

lsando@rangeresources.com

 

 

Range Media Contact:

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6


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 March 31,

 

 

2023

 

 

 

2022

 

 

 

%

 

Revenues and other income:

 

 

 

 

 

 

 

 

 

 

 

Natural gas, NGLs and oil sales (a)

$

736,282

 

 

$

1,032,351

 

 

 

 

 

Derivative fair value income (loss)

 

367,967

 

 

 

(939,057

)

 

 

 

 

Brokered natural gas, marketing and other (b)

 

77,417

 

 

 

87,423

 

 

 

 

 

Other (b)

 

4,694

 

 

 

19

 

 

 

 

 

Total revenues and other income

 

1,186,360

 

 

 

180,736

 

 

 

556

%

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Direct operating

 

26,569

 

 

 

19,939

 

 

 

 

 

Direct operating – stock-based compensation (c)

 

415

 

 

 

349

 

 

 

 

 

Transportation, gathering, processing and compression

 

285,483

 

 

 

297,787

 

 

 

 

 

Taxes other than income

 

7,894

 

 

 

7,079

 

 

 

 

 

Brokered natural gas and marketing

 

66,407

 

 

 

92,604

 

 

 

 

 

Brokered natural gas and marketing – stock-based

   compensation (c)

 

661

 

 

 

519

 

 

 

 

 

Exploration

 

4,284

 

 

 

4,247

 

 

 

 

 

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

 

320

 

 

 

452

 

 

 

 

 

Abandonment and impairment of unproved properties

 

7,510

 

 

 

1,996

 

 

 

 

 

General and administrative

 

33,422

 

 

 

30,473

 

 

 

 

 

General and administrative – stock-based compensation (c)

 

9,600

 

 

 

11,573

 

 

 

 

 

General and administrative – lawsuit settlements

 

124

 

 

 

491

 

 

 

 

 

Exit costs

 

12,323

 

 

 

11,115

 

 

 

 

 

Deferred compensation plan (d)

 

9,396

 

 

 

73,343

 

 

 

 

 

Interest expense

 

30,857

 

 

 

45,101

 

 

 

 

 

Interest expense – amortization of deferred financing costs (e)

 

1,345

 

 

 

2,074

 

 

 

 

 

Loss on early extinguishment of debt

 

 

 

 

69,210

 

 

 

 

 

Depletion, depreciation and amortization

 

86,562

 

 

 

85,604

 

 

 

 

 

Gain on sale of assets

 

(138

)

 

 

(331

)

 

 

 

 

Total costs and expenses

 

583,034

 

 

 

753,625

 

 

 

-23

%

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

603,326

 

 

 

(572,889

)

 

 

205

%

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit):

 

 

 

 

 

 

 

 

 

 

 

Current

 

2,699

 

 

 

4,751

 

 

 

 

 

Deferred

 

119,180

 

 

 

(120,832

)

 

 

 

 

 

 

121,879

 

 

 

(116,081

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

481,447

 

 

$

(456,808

)

 

 

205

%

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.98

 

 

$

(1.86

)

 

 

 

 

Diluted

$

1.95

 

 

$

(1.86

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, as reported:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

238,019

 

 

 

245,350

 

 

 

-3

%

Diluted

 

240,882

 

 

 

245,350

 

 

 

-2

%

(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)

 

March 31,

 

 

 

December 31,

 

 

 

2023

 

 

 

2022

 

 

 

(Unaudited)

 

 

 

(Audited)

 

Assets

 

 

 

 

 

 

 

Current assets

$

546,235

 

 

$

538,662

 

Derivative assets

 

231,381

 

 

 

41,915

 

Natural gas and oil properties, successful efforts method

 

5,950,245

 

 

 

5,890,404

 

Transportation and field assets

 

2,087

 

 

 

2,434

 

Operating lease right-of-use assets

 

67,608

 

 

 

84,070

 

Other

 

84,711

 

 

 

68,077

 

 

$

6,882,267

 

 

$

6,625,562

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities

$

736,311

 

 

$

864,678

 

Asset retirement obligations

 

4,570

 

 

 

4,570

 

Derivative liabilities

 

16,019

 

 

 

151,417

 

 

 

 

 

 

 

 

 

Bank debt

 

 

 

 

9,509

 

Senior notes

 

1,833,238

 

 

 

1,832,451

 

Total long-term debt

 

1,833,238

 

 

 

1,841,960

 

 

 

 

 

 

 

 

 

Deferred tax liability

 

452,753

 

 

 

333,571

 

Derivative liabilities

 

6,861

 

 

 

15,495

 

Deferred compensation liability

 

103,711

 

 

 

99,907

 

Operating lease liabilities

 

18,953

 

 

 

20,903

 

Asset retirement obligations and other liabilities

 

114,662

 

 

 

112,981

 

Divestiture contract obligation

 

289,734

 

 

 

304,074

 

 

 

 

 

 

 

 

 

Common stock and retained deficit

 

3,742,451

 

 

 

3,305,198

 

Other comprehensive income

 

476

 

 

 

467

 

Common stock held in treasury

 

(437,472

)

 

 

(429,659

)

Total stockholders’ equity

 

3,305,455

 

 

 

2,876,006

 

 

$

6,882,267

 

 

$

6,625,562

 

 

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

 

(Unaudited, in thousands)

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues and other income, as reported

$

1,186,360

 

 

$

180,736

 

 

 

556

%

Adjustment for certain special items:

 

 

 

 

 

 

 

 

 

 

 

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

 

(333,499

)

 

 

805,922

 

 

 

 

 

Total revenues, as adjusted, non-GAAP

$

852,861

 

 

$

986,658

 

 

 

-14

%

 

 

 

 

 

8


 

 

RANGE RESOURCES CORPORATION

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

(Unaudited in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Net income (loss)

$

481,447

 

 

$

(456,808

)

Adjustments to reconcile net cash provided from continuing operations:

 

 

 

 

 

 

 

Deferred income tax expense (benefit)

 

119,180

 

 

 

(120,832

)

Depletion, depreciation, amortization and impairment

 

86,562

 

 

 

85,604

 

Abandonment and impairment of unproved properties

 

7,510

 

 

 

1,996

 

Derivative fair value (income) loss

 

(367,967

)

 

 

939,057

 

Cash settlements on derivative financial instruments

 

34,468

 

 

 

(133,135

)

Divestiture contract obligation

 

12,215

 

 

 

10,954

 

Amortization of deferred issuance costs and other

 

1,310

 

 

 

1,965

 

Deferred and stock-based compensation

 

20,681

 

 

 

86,113

 

Gain on sale of assets and other

 

(138

)

 

 

(331

)

Loss on early extinguishment of debt

 

 

 

 

69,210

 

 

 

 

 

 

 

 

 

Changes in working capital:

 

 

 

 

 

 

 

Accounts receivable

 

225,213

 

 

 

58,674

 

Prepaid and other

 

(5,335

)

 

 

(5,908

)

Accounts payable

 

(10,822

)

 

 

51,996

 

Accrued liabilities and other

 

(129,368

)

 

 

(182,141

)

Net changes in working capital

 

79,688

 

 

 

(77,379

)

Net cash provided from operating activities

$

474,956

 

 

$

406,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF NET CASH PROVIDED FROM OPERATING ACTIVITIES, AS REPORTED, TO CASH FLOW FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL, a non-GAAP measure

 

 

 

 

 

 

 

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

Net cash provided from operating activities, as reported

$

474,956

 

 

$

406,414

 

Net changes in working capital

 

(79,688

)

 

 

77,379

 

Exploration expense

 

4,284

 

 

 

4,247

 

Lawsuit settlements

 

124

 

 

 

491

 

Non-cash compensation adjustment and other

 

(146

)

 

 

393

 

Cash flow from operations before changes in working capital – non-GAAP measure

$

399,530

 

 

$

488,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

Basic:

 

 

 

 

 

 

 

Weighted average shares outstanding

 

243,667

 

 

 

251,561

 

Stock held by deferred compensation plan

 

(5,648

)

 

 

(6,211

)

Adjusted basic

 

238,019

 

 

 

245,350

 

 

 

 

 

 

 

 

 

Dilutive:

 

 

 

 

 

 

 

Weighted average shares outstanding

 

243,667

 

 

 

251,561

 

Dilutive stock options under treasury method

 

(2,785

)

 

 

(6,211

)

Adjusted dilutive

 

240,882

 

 

 

245,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9


RANGE RESOURCES CORPORATION

RECONCILIATION OF NATURAL GAS, NGLs AND OIL SALES AND DERIVATIVE FAIR VALUE INCOME (LOSS) TO CALCULATED CASH REALIZED NATURAL GAS, NGLs AND OIL PRICES WITH AND WITHOUT THIRD PARTY TRANSPORTATION, GATHERING AND COMPRESSION FEES, a non-GAAP measure

 

 

(Unaudited, in thousands, except per unit data)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

 

2022

 

 

 

%

 

Natural gas, NGL and oil sales components:

 

 

 

 

 

 

 

 

 

 

 

Natural gas sales

$

441,580

 

 

$

629,923

 

 

 

 

 

NGL sales

 

256,440

 

 

 

338,369

 

 

 

 

 

Oil sales

 

38,262

 

 

 

64,059

 

 

 

 

 

Total oil and gas sales, as reported

$

736,282

 

 

$

1,032,351

 

 

 

-29

%

 

 

 

 

 

 

 

 

 

 

 

 

Derivative fair value income (loss), as reported:

$

367,967

 

 

$

(939,057

)

 

 

 

 

Cash settlements on derivative financial instruments – (gain) loss:

 

 

 

 

 

 

 

 

 

 

 

Natural gas

 

(36,650

)

 

 

99,458

 

 

 

 

 

NGLs

 

 

 

 

12,318

 

 

 

 

 

Crude Oil

 

2,182

 

 

 

21,359

 

 

 

 

 

Total change in fair value related to commodity derivatives prior to settlement, a non-GAAP measure

$

333,499

 

 

$

(805,922

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation, gathering, processing and compression components:

 

 

 

 

 

 

 

 

 

 

 

Natural gas

$

152,589

 

 

$

160,436

 

 

 

 

 

NGLs

 

132,712

 

 

 

137,340

 

 

 

 

 

Oil

 

182

 

 

 

11

 

 

 

 

 

Total transportation, gathering, processing and compression, as reported

$

285,483

 

 

$

297,787

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas, NGL and oil sales, including cash-settled derivatives: (c)

 

 

 

 

 

 

 

 

 

 

 

Natural gas sales

$

478,230

 

 

$

530,465

 

 

 

 

 

NGL sales

 

256,440

 

 

 

326,051

 

 

 

 

 

Oil sales

 

36,080

 

 

 

42,700

 

 

 

 

 

Total

$

770,750

 

 

$

899,216

 

 

 

-14

%

 

 

 

 

 

 

 

 

 

 

 

 

Production of oil and gas during the periods: (a)

 

 

 

 

 

 

 

 

 

 

 

Natural gas (mcf)

 

133,646,064

 

 

 

131,250,337

 

 

 

2

%

NGL (bbl)

 

9,289,739

 

 

 

8,453,445

 

 

 

10

%

Oil (bbl)

 

573,036

 

 

 

730,462

 

 

 

-22

%

Gas equivalent (mcfe) (b)

 

192,822,714

 

 

 

186,353,779

 

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

Production of oil and gas – average per day: (a)

 

 

 

 

 

 

 

 

 

 

 

Natural gas (mcf)

 

1,484,956

 

 

 

1,458,337

 

 

 

2

%

NGL (bbl)

 

103,219

 

 

 

93,927

 

 

 

10

%

Oil (bbl)

 

6,367

 

 

 

8,116

 

 

 

-22

%

Gas equivalent (mcfe) (b)

 

2,142,475

 

 

 

2,070,598

 

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

Average prices, excluding derivative settlements and before third party

       transportation costs:

 

 

 

 

 

 

 

 

 

 

 

Natural gas (mcf)

$

3.30

 

 

$

4.80

 

 

 

-31

%

NGL (bbl)

$

27.60

 

 

$

40.03

 

 

 

-31

%

Oil (bbl)

$

66.77

 

 

$

87.70

 

 

 

-24

%

Gas equivalent (mcfe) (b)

$

3.82

 

 

$

5.54

 

 

 

-31

%

 

 

 

 

 

 

 

 

 

 

 

 

Average prices, including derivative settlements before third party
transportation costs: (c)

 

 

 

 

 

 

 

 

 

 

 

Natural gas (mcf)

$

3.58

 

 

$

4.04

 

 

 

-11

%

NGL (bbl)

$

27.60

 

 

$

38.57

 

 

 

-28

%

Oil (bbl)

$

62.96

 

 

$

58.46

 

 

 

8

%

Gas equivalent (mcfe) (b)

$

4.00

 

 

$

4.83

 

 

 

-17

%

 

 

 

 

 

 

 

 

 

 

 

 

Average prices, including derivative settlements and after third party

       transportation costs: (d)

 

 

 

 

 

 

 

 

 

 

 

Natural gas (mcf)

$

2.44

 

 

$

2.82

 

 

 

-14

%

NGL (bbl)

$

13.32

 

 

$

22.32

 

 

 

-40

%

Oil (bbl)

$

62.64

 

 

$

58.44

 

 

 

7

%

Gas equivalent (mcfe) (b)

$

2.52

 

 

$

3.23

 

 

 

-22

%

 

 

 

 

 

 

 

 

 

 

 

 

Transportation, gathering and compression expense per mcfe

$

1.48

 

 

$

1.60

 

 

 

-7

%

(a) Represents volumes sold regardless of when produced.

(b) Oil and NGLs are converted at the rate of one barrel equals six mcfe based upon the approximate relative energy content of oil to natural gas, which is not necessarily indicative of the relationship of oil and natural gas prices.

(c) Excluding third party transportation, gathering and compression costs.

10


(d) Net of transportation, gathering, and compression costs.

 

RANGE RESOURCES CORPORATION

 

RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES AS REPORTED TO INCOME BEFORE INCOME

TAXES EXCLUDING CERTAIN ITEMS, a non-GAAP measure

 

 

(Unaudited, in thousands, except per share data)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

 

2022

 

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations before income taxes, as reported

$

603,326

 

 

$

(572,889

)

 

 

205

%

Adjustment for certain special items:

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of assets

 

(138

)

 

 

(331

)

 

 

 

 

Change in fair value related to derivatives prior to settlement

 

(333,499

)

 

 

805,922

 

 

 

 

 

Abandonment and impairment of unproved properties

 

7,510

 

 

 

1,996

 

 

 

 

 

Loss on early extinguishment of debt

 

 

 

 

69,210

 

 

 

 

 

Lawsuit settlements

 

124

 

 

 

491

 

 

 

 

 

Exit costs

 

12,323

 

 

 

11,115

 

 

 

 

 

Brokered natural gas and marketing – non-cash stock-based
compensation

 

661

 

 

 

519

 

 

 

 

 

Direct operating – non-cash stock-based compensation

 

415

 

 

 

349

 

 

 

 

 

Exploration expenses – non-cash stock-based compensation

 

320

 

 

 

452

 

 

 

 

 

General & administrative – non-cash stock-based compensation

 

9,600

 

 

 

11,573

 

 

 

 

 

Deferred compensation plan – non-cash adjustment

 

9,396

 

 

 

73,343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes, as adjusted

 

310,038

 

 

 

401,750

 

 

 

-23

%

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense, as adjusted

 

 

 

 

 

 

 

 

 

 

 

Current

 

2,699

 

 

 

4,751

 

 

 

 

 

Deferred (a)

 

68,610

 

 

 

100,438

 

 

 

 

 

Net income excluding certain items, a non-GAAP measure

$

238,729

 

 

$

296,562

 

 

 

-20

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP income per common share

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.00

 

 

$

1.21

 

 

 

-17

%

Diluted

$

0.99

 

 

$

1.18

 

 

 

-16

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP diluted shares outstanding, if dilutive

 

240,882

 

 

 

251,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Taxes are estimated to be approximately 23% for 2023 and deferred taxes were estimated to be 25% for 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11


RANGE RESOURCES CORPORATION

 

RECONCILIATION OF NET INCOME (LOSS), EXCLUDING

CERTAIN ITEMS AND ADJUSTED EARNINGS PER SHARE, non-GAAP measures

 

 

 

 

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

Three Months Ended

March 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Net income (loss), as reported

$

481,447

 

 

$

(456,808

)

Adjustment for certain special items:

 

 

 

 

 

 

 

Gain on sale of assets

 

(138

)

 

 

(331

)

Loss on early extinguishment of debt

 

 

 

 

69,210

 

Change in fair value related to derivatives prior to settlement

 

(333,499

)

 

 

805,922

 

Abandonment and impairment of unproved properties

 

7,510

 

 

 

1,996

 

Lawsuit settlements

 

124

 

 

 

491

 

Exit costs

 

12,323

 

 

 

11,115

 

Non-cash stock-based compensation

 

10,996

 

 

 

12,893

 

Deferred compensation plan

 

9,396

 

 

 

73,343

 

Tax impact

 

50,570

 

 

 

(221,269

)

 

 

 

 

 

 

 

 

Net income excluding certain items, a non-GAAP measure

$

238,729

 

 

$

296,562

 

 

 

 

 

 

 

 

 

Net income (loss) per diluted share, as reported

$

1.95

 

 

$

(1.86

)

Adjustment for certain special items per diluted share:

 

 

 

 

 

 

 

Gain on sale of assets

 

(0.00

)

 

 

(0.00

)

Loss on early extinguishment of debt

 

 

 

 

0.28

 

Change in fair value related to derivatives prior to settlement

 

(1.38

)

 

 

3.21

 

Abandonment and impairment of unproved properties

 

0.03

 

 

 

0.01

 

Lawsuit settlements

 

0.00

 

 

 

0.00

 

Exit costs

 

0.05

 

 

 

0.04

 

Non-cash stock-based compensation

 

0.05

 

 

 

0.05

 

Deferred compensation plan

 

0.04

 

 

 

0.29

 

Tax impact

 

0.21

 

 

 

(0.88

)

Dilutive share impact (rabbi trust and other)

 

0.04

 

 

 

0.04

 

 

 

 

 

 

 

 

 

Net income per diluted share, excluding certain items, a non-

     GAAP measure

$

0.99

 

 

$

1.18

 

 

 

 

 

 

 

 

 

Adjusted earnings per share, a non-GAAP measure:

 

 

 

 

 

 

 

Basic

$

1.00

 

 

$

1.21

 

Diluted

$

0.99

 

 

$

1.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12


 

RANGE RESOURCES CORPORATION

RECONCILIATION OF CASH MARGIN PER MCFE, a non-GAAP measure

 

 

 

 

 

 

 

(Unaudited, in thousands, except per unit data)

 

 

 

 

 

 

 

 

Three Months Ended

March 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Natural gas, NGL and oil sales, as reported

$

736,282

 

 

$

1,032,351

 

Derivative fair value income (loss), as reported

 

367,967

 

 

 

(939,057

)

       Less non-cash fair value (gain) loss

 

(333,499

)

 

 

805,922

 

Brokered natural gas and marketing and other, as reported

 

82,111

 

 

 

87,442

 

       Less ARO settlement and other (gains) losses

 

(4,694

)

 

 

(19

)

               Cash revenue applicable to production

 

848,167

 

 

 

986,639

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Direct operating, as reported

 

26,984

 

 

 

20,288

 

       Less direct operating stock-based compensation

 

(415

)

 

 

(349

)

Transportation, gathering and compression, as reported

 

285,483

 

 

 

297,787

 

Taxes other than income, as reported

 

7,894

 

 

 

7,079

 

Brokered natural gas and marketing, as reported

 

67,068

 

 

 

93,123

 

       Less brokered natural gas and marketing stock-based

       compensation

 

(661

)

 

 

(519

)

General and administrative, as reported

 

43,146

 

 

 

42,537

 

       Less G&A stock-based compensation

 

(9,600

)

 

 

(11,573

)

       Less lawsuit settlements

 

(124

)

 

 

(491

)

Interest expense, as reported

 

32,202

 

 

 

47,175

 

       Less amortization of deferred financing costs

 

(1,345

)

 

 

(2,074

)

               Cash expenses

 

450,632

 

 

 

492,983

 

 

 

 

 

 

 

 

 

Cash margin, a non-GAAP measure

$

397,535

 

 

$

493,656

 

 

 

 

 

 

 

 

 

Mmcfe produced during period

 

192,823

 

 

 

186,354

 

 

 

 

 

 

 

 

 

Cash margin per mcfe

$

2.06

 

 

$

2.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF INCOME BEFORE INCOME TAXES TO CASH MARGIN

 

 

 

 

 

 

 

(Unaudited, in thousands, except per unit data)

 

 

 

 

 

 

 

 

Three Months Ended

March 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes, as reported

$

603,326

 

 

$

(572,889

)

Adjustments to reconcile income before income taxes to

   cash margin:

 

 

 

 

 

 

 

ARO settlements and other gains

 

(4,694

)

 

 

(19

)

Derivative fair value (income) loss

 

(367,967

)

 

 

939,057

 

Net cash receipts (payments) on derivative settlements

 

34,468

 

 

 

(133,135

)

Exploration expense

 

4,284

 

 

 

4,247

 

Lawsuit settlements

 

124

 

 

 

491

 

Exit costs

 

12,323

 

 

 

11,115

 

Deferred compensation plan

 

9,396

 

 

 

73,343

 

Stock-based compensation (direct operating, brokered natural gas

   and marketing, general and administrative and termination costs)

 

10,996

 

 

 

12,893

 

Interest – amortization of deferred financing costs

 

1,345

 

 

 

2,074

 

Depletion, depreciation and amortization

 

86,562

 

 

 

85,604

 

Gain on sale of assets

 

(138

)

 

 

(331

)

Loss on early extinguishment of debt

 

 

 

 

69,210

 

Abandonment and impairment of unproved properties

 

7,510

 

 

 

1,996

 

Cash margin, a non-GAAP measure

$

397,535

 

 

$

493,656

 

 

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