Fort Worth-based independent Range Resources Corp. said it has hedged approximately 80% of its anticipated 2007 production at an average floor price of $8.12/Mcf of natural gas and $53.46/bbl of oil. For 2008, the company has hedged roughly 60% of its anticipated production at average floor prices of $8.91/Mcf and $58.09/bbl.
"With approximately 80% of Range's reserves being natural gas, we have locked in an average floor price of approximately $8.50/Mcf on a significant portion of our 2007 and 2008 natural gas production," said Range CEO John H. Pinkerton. "Despite the recent drop in natural gas prices, we are in an excellent position to continue to develop our large inventory of more than 8,000 low-cost drilling projects.
"With a large portion of our cash flow locked in with the hedges, we can focus on driving up production and reserves in what we believe will be a moderating service cost environment. For 2007, we believe this will translate into another year of double-digit production growth, attractive returns on capital expended and record financial results."
Range's hedge announcement came on the same day some industry analysts slashed their price expectations for 2007 to $7.50 and less (see related stories).
In July Range reported a 13% increase in production for the second quarter of 2006 over the year-ago period (see Daily GPI, July 19, 2006). Range also bought Fort Worth-based Stroud Energy Inc. last year for $456 million, including $82 million in assumed debt, giving it an additional 171 Bcfe of proved reserves and 33 MMcf/d of production, half of which is from the Barnett Shale (see Daily GPI, Nov. 17, 2006; May 12, 2006).
Ranger operates in the Southwest, Appalachian and Gulf Coast regions of the United States.
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