Range Resources Corp. doesn't really know how many wells it may drill from its million acre-plus holdings in the Appalachian Basin. Simple answer, "it's a lot of wells" that will grow in number for at least 10 or 20 years, COO Ray Walker told analysts Wednesday.

The Fort Worth, TX-based explorer, whose main targets today are Pennsylvania's Marcellus, Utica and Upper Devonian shales,  earlier in October issued 3Q2013 oil and natural gas production numbers, indicating record production of 960 MMcfe/d total, a 21% increase from 3Q2012 (see Shale Daily,Oct. 17).

On Wednesday the management team, led by CEO Jeff Ventura and Walker, discussed the quarterly results and provided their take on the gas in place in the Appalachian Basin, as well as what they expect the operator to achieve not only in Appalachia but in other basins across the country, including the Permian Basin. Most of the discussion, however, centered on the Pennsylvania rainmaker, where year/year natural gas output rose 19%, oil and condensate production increased 43% and natural gas liquids production jumped 28%. Marcellus production in 3Q2013 averaged 756 MMcfe/d net.

"Range continued to make significant progress during the third quarter, with record production results, lower unit costs, and materially higher cash flow," said Ventura. "Our balance sheet, liquidity and cash flow growth positions us well to continue growing production 20-25% for many years."

Range's growth, he said, "is led by our approximate one million acre leasehold position in Pennsylvania, which essentially doubles when stacked pay reservoirs across most of our acreage in the basin are considered."

The Marcellus may have been the primary target, but Range's experts have been on the case of the stacked shales since the start. The Upper Devonian is above the Marcellus and the Utica is below. So the Upper Devonian already is well delineated, because information was logged as wells were drilled to the Marcellus.

The Marcellus anchors Range's position, and as everyone alive is aware, the shale monster is the most prolific gas play in North America. Based on the estimated gas in place (GIP) maps released by Range on Tuesday, its southwest Pennsylvania acreage "is strategically located at the nexus where the largest estimated gas in place exists, when considering all three shale horizons," Ventura said.

"Range believes that this area also encompasses the core of the super-rich and wet areas of both the Marcellus and the Upper Devonian shales. We believe that our expected 20-25% production growth for many years, coupled with the high returns, low cost and low reinvestment risk will drive substantial per share value for our shareholders for years to come."

The confidence in delivering the high production growth for years comes in part from not only the GIP numbers but from the long-term designs put in place for infrastructure, both for well pads and for pipeline takeaway, Walker explained.

"We typically design these pads for more wells than we actually drill…We will typically drill anywhere from two to six wells per pad in today's world. That's trying to optimize our capital efficiency...We did economies of scale for more wells [than] we put on the pad, and yet we're still trying to build infrastructure and delineate all of those different issues by stepping out as much as we can and doing that. As we go back, we have the ability to put a whole lot of wells on there," he told analysts.

There's no number to quote on the possible number of wells Range may drill in Appalachia because of the "various evolutions of designs" for drilling, Walker said.

"But I think there will be a point in time where you could have 20, 30, 40 wells on a pad, there's no question about that. The real technology breakthrough that we need going forward is the ability to do multiple laterals out of a single wellbore. That technology does exist today, but it's extremely expensive. It's just simply cheaper to start over and drill a new gas roots vertical for each well today. But I think that there's no doubt that that's coming down the road."

In Range's long-term project designs, the company looks "10, 15, 20 years out, because we think we have the resource potential as we continue to demonstrate with gas in place maps, and we keep rolling out more information as we gain confidence in history, and we become very confident in what we're putting out there so we can actually grow this for many years...

"That's in all of our plans for midstream infrastructure, whether it's for compressors, whether it's processing plants…how we power those compressors …how we would stack wells together, how we would handle condensate…all of that is going into that plan...It's a lot of wells."

The 20-25% production growth this year continues a decade's long double-digit output growth, Ventura noted. In addition, cash flow increases should outpace output, "depending on commodity prices." Range's resource potential is "nine to 13 times proved reserves."

The proof is in the reserves base, where the upside is growing, explained the CEO. At the end of 2007, proved reserves were 2.2 Tcfe, with a resource potential of 16-22 Tcfe. By the end of last year, proved reserves totaled 6.5 Tcfe, with a potential of 60-83 Tcfe of resources. Proved reserves have increased by around 23% a year on a compounded basis, and Range has added 12-15 Tcfe with tighter-spaced drilling in the wet and super-rich portions of the Marcellus. In just the past three years, 4.7 Tcfe of resource potential has moved into the proved reserves column.

Range has about one million net acres prospective for shale drilling in Pennsylvania, with 315,000 of legacy land in the northwest mostly held by production (HBP); 145,000 acres in the northeast with one rig projected to hold all blocked up acreage targeted for development and 540,000 acres in the southwest, where 93% is HBP or projected to be drilled.