Range Resources Corp. said last week that it increased reserves by 491 Bcfe or 72% last year. The company's proved reserves as of Dec. 31, 2004 totaled 1.18 Tcfe, comprised of 943 Bcf of natural gas and 39 million barrels of oil and natural gas liquids.
The increase was due to 464 Bcfe of acquisitions and 156 Bcfe of discoveries and extensions, offset by 72 Bcfe of production and 58 Bcfe of property sales and revisions, Range said.
The pretax present value of the company's proved reserves at year-end, based on constant prices and costs and discounted at 10%, rose to $2.3 billion, representing a 64% increase for the year, according to Range's figures. The valuation was based on spot prices of $6.18/MMbtu and $43.33/bbl, compared to $6.19/MMBtu and $32.52/bbl one year earlier.
Breaking down the reserves into categories, Range said 80% of the proved reserves by volume was natural gas and 63% was attributable to proved developed reserves. The company noted that over 80% of its proved undeveloped reserves are located in Appalachia. At year-end 2004, Range's reserve life index stood at 14.9 years based on fourth quarter production levels. Approximately 88% of the company's reserves were audited by independent petroleum consultants.
During 2004, the company replaced 826% of production, including 216% from drilling. Total anticipated finding costs in 2004, including all exploration, development, acquisition, leasehold and seismic cash costs averaged $1.21/Mcfe. The company's three-year average (2002-2004) finding cost equates to $1.17/Mcfe.
"We are extremely pleased to have increased our proved reserves by 72% at an all-in cost of $1.21/Mcfe," said John H. Pinkerton, Range's president. "Importantly, our drilling effort alone replaced more than 200% of production. This performance is a direct reflection of our superb technical team and our strategy of steady drill bit growth coupled with complementary acquisitions. Our 2005 drilling program is off to a solid start as we have 13 rigs running. For the year we anticipate drilling 787 gross wells."
The independent oil and gas company operates in the Southwest, Appalachian and Gulf Coast regions of the United States.
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