Boosted by activity in the Marcellus Shale and Mississippian Lime, Range Resources Inc. said Thursday it has beaten its 3Q2012 forecast for natural gas and natural gas liquids (NGL) production, with output up 47% year/year (y/y) and 10% sequentially.
CEO Jeff Ventura said the company is on track to meet its target to grow production 35% in 2012 while staying within its capital spending plan.
According to the preliminary results released Thursday, natural gas accounted for more than three-quarters (79%) of the total three-month net output at 623.3 MMcf/d, which is 52% higher than in 3Q2011. NGLs accounted for 15% of the quarterly production at 20,040 b/d, while oil claimed 6%, or 7,748 b/d. The Fort Worth, TX-based independent previously had said its 3Q2012 production would average 618-628 MMcf/d of gas, 18,600 b/d of NGLs, and 7,600-7,800 b/d of oil.
NGL output is about 30% higher than a year ago, and oil is up 36% y/y and 10% higher than in 2Q2012.
The results put Range “well on track to achieve our 2012 production growth target of 35%,” said Ventura. “Our focus on reducing total unit costs continues to bear fruit and capital expenditures remain within our original budget. Given the positive operating results during the first three quarters of the year, coupled with our outstanding hedge position, we are well-positioned to have a strong finish for 2012.”
In the preliminary tally Range’s realized price for natural gas was $3.88/Mcf, well below the $6.41 received in 3Q2011 and $4.74 in 2Q2012. NGL realized prices were $38.79/bbl, while crude oil was $84.86.
With little comment, Range said its capital spending plan doesn’t include any more drilling in the gassy Barnett Shale. The company “has elected not to drill the last remaining Barnett undeveloped leasehold, which it had retained when the Barnett properties were sold in 2011. The Barnett undeveloped leasehold will increase the noncash unproved property impairment provision by $20 million for the quarter.”
Range sold most of its Barnett leasehold two years ago to concentrate its exploration efforts in the Marcellus (see Shale Daily, Oct. 29, 2010).
The company said it has hedged about 84% of its expected 4Q2012 natural gas production at a weighted average floor of $4.27/Mcf, with 80% of its projected crude oil production hedged at a floor of $91.19/bbl and 60% of its composite NGL production at “current market prices.” For 3Q2012 Range expects to realize about $80 million in hedging gains.
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