Range Beats on Improved Revenue - Analyst Blog

Range Resources Corp. (RRC) has reported better-than-expected first-quarter earnings on the back of increased production volumes and improved liquids prices. Quarterly earnings per share came in at 16 cents, compared to the Zacks Consensus Estimate of 14 cents and year-earlier earnings of 24 cents. Revenue for the quarter was $236.8 million, up 17% from the year-earlier quarter.

Operational Performance

Total production volumes for the quarter increased 12% year over year, driven by solid contribution from the Barnett and Marcellus shale plays. Total volume averaged 41.8 Bcfe (81% natural gas), reflecting the 29th consecutive quarter of sequential production growth.

While average oil production decreased 29% from the year-earlier level to 5.7 thousand barrels per day (MBbl/d), natural gas liquid and natural gas volumes jumped 96% and 10% year over year to 9.2 MBbl/d and 375 million cubic feet per day (MMcf/d), respectively.

Average price realization for natural gas during the quarter, including hedging effects, was $4.77 per Mcf (compared with $6.47 in the year-ago period). Average prices for crude oil and natural gas liquids were $69.72 (versus $59.64) and $43.18 (vs. $16.22) per barrel, respectively.

At the end of the quarter, long-term debt stood at $1.74 billion, representing a debt-to-capitalization ratio of 40.7%.

Outlook

Range’s long-term production prospect is gaining momentum with superb drilling results in the Marcellus play and its expansion plan for its Northeast Pennsylvania acreages. The company has increased its Marcellus resource potential. Additionally, the company has made an excellent headway in driving down costs. We believe that Range is well-positioned to continue ramping up its upstream activity, aided by operating cash flow and proceeds from asset sales.