Range Resources Corp. CEO Jeff Ventura said Wednesday Appalachian natural gas producers need more support from policymakers if they are  expected to help meet increasing demand for the fuel at home and abroad.

Aggressive domestic and international energy transition policies, along with Russia’s invasion of Ukraine, which has jeopardized European gas imports, have pushed prices higher. The policies also have reduced supply,  Ventura said during a first quarter conference call.

Ventura joined a growing group of c-suite peers in Appalachia and across the country who are seizing the moment to promote American oil and gas production and liquefied natural gas (LNG) exports.

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“As we look forward, we see a world that desperately needs access to ethical, safe, secure, reliable and abundant fuel sources, while at the same time being mindful of and continuing to prioritize a lower-carbon future,” he told analysts.

Range holds nearly 500,000 net acres in the core of the Marcellus Shale in Southwest Pennsylvania, where it still has a multi-decade drilling inventory. Ventura said Appalachian natural gas and natural gas liquids (NGL) should have a stronger role in the global call for supplies. 

However, the CEO  stressed that “a more meaningful increase in natural gas supply will require support from federal, state and local governments, to provide critical infrastructure in the form of pipelines, compression and LNG terminals to get Appalachian natural gas to the end markets that need it.”

Some in-basin demand and incremental takeaway projects are expected in Appalachia in the years ahead, Ventura said. Still, he noted that more infrastructure is needed to significantly boost production.

“But the industry is currently hindered by a lack of additional infrastructure due to permitting delays, policy decisions and rhetoric that discourages long-term capital investment in natural gas and natural gas infrastructure,” he said.

Rising commodity prices lifted Range’s first quarter results. Realized natural gas, NGL and oil prices during the period, including cash-settled hedges and derivative settlements. averaged $4.83/Mcfe, up from $3.01 in the year-ago period. 

Average realized natural gas prices, including the impact of basis hedging, was $4.92/Mcf, or 3 cents above the average New York Mercantile Exchange price for the period. Pre-hedge NGL realizations were $40.03/bbl, or 74 cents above the benchmark Mont Belvieu equivalent during the quarter. 

Range said first quarter NGL realizations were driven by higher ethane prices and an improving market for propane and heavier NGL products. The company expects up to a $2 premium to Mont Belvieu pricing this year given its international exposure at the Marcus Hook export terminal near Philadelphia. 

Growing NGL Demand

As buyers in Europe look to diversify energy supplies in a pivot away from Russia, COO Dennis Degner said the company expects strong international NGL demand. He added that domestic propane levels are at historic lows as well. 

“The ongoing strength in export demand will present a challenge to domestic buyers as they work to refill storage levels from historically low levels, supporting Mont Belvieu prices through the summer and setting up for another bullish winter for the 2022-2023 season,” Degner said. 

About 30% of Range’s full-year production is expected to be NGLs. 

The company produced 2.071 Bcfe in the first quarter, flat with 1Q2021 volumes of 2.081 Bcfe as the company looked to better control spending and output heading into the year. 

Management also stressed that it was keeping a close eye on inflation and supply chain issues as the costs for fuel, steel and sand have increased. Some costs have been offset by previous moves to secure 2022 tubular goods and extend a contract for the company’s electric hydraulic fracturing fleet, Degner said. 

“We will continue to watch the supply chain landscape and adjust our plan as necessary,” he said. 

Range reported a first quarter net loss of $457 million (minus $1.86/share), compared with year-ago net profits of i$27 million (11 cents). The 1Q2022 results were primarily related to a $939 million hedging loss from a wrong-way bet on the direction of natural gas prices.