Range 2Q profit tops analysts' estimates; output rises 8 pct.

Posted July 27, 2011

Observer Reporter

FORT WORTH, Texas – Range Resources Corp. saw its revenue increase of 48 percent to $256.7 million and production of natural gas rise by 8 percent for its second quarter, which ended June 30.

The results, reported after the close of Monday’s stock market, helped the oil and natural gas drilling and exploration company post adjusted earnings per share of 27 cents, beating estimates of 19 cents.

For the second quarter, the company’s net income stood at $51.3 million, or 32 cents per share, compared with $9.1 million, or 6 cents a share for the second quarter of a year ago.

According to Range, the largest driller of natural gas in Pennsylvania’s Marcellus Shale, its production was 76 percent natural gas, 17 percent natural gas liquids and 7 percent crude oil.

Targeted drilling to Range’s liquids-rich plays, including its Marcellus Shale holdings, increased its NGL production by almost 20 percent between years. Realized prices averaged $5.76 per thousand cubic feet, a 14 percent increase over the comparable quarter a year ago. The company said the increase in the average per mcfe prices was primarily due to a greater proportion of liquids in the total production mix and stronger NGL and oil prices.

The company said it continued to drive down its unit costs, posting a decrease of 9 percent across its five largest cost categories.

Range Chief Executive Officer John Pinkerton said the quarter was marked by the simultaneous closing of the sale of the company’s Barnett Shale properties and an increase in production above its guidance.

“We finished the quarter in the best financial position in the company’s history with $289 million in cash, no borrowings outstanding on our $2 billion bank credit facility and no bond maturities until 2017,” Pinkerton said.

He said that in the second half of the year, Range expects to fully replace all of its Barnett production by the end of the third quarter, reaching its company-wide production increase target of 10 percent for the year. He said Range expects to finish the year at 400 million cubic feet per day net from the Marcellus Shale. 

 

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