As other shale players are moving to liquids, Range Resources Corp. said Wednesday it is simply expanding the house it has long been building in the neighborhood.

The Fort Worth, TX-based company will focus 75% of its $1.6 billion capital budget on liquids-rich plays in Appalachia and the Midcontinent. “These are not new projects thrown together in response to current market conditions,” COO Ray Walker said during a conference call on Wednesday.

Range is adding five “enhancements” this year: the “super-rich” Marcellus Shale, the “super-rich” Upper Devonian Shale, the wet Utica Shale, the horizontal Mississippian plays and the Cline Shale in the Permian Basin. Range also plans to continue traditional wet and dry Marcellus drilling.

In the fourth quarter Range recorded a net loss of $3 million (minus 2 cents/diluted share) versus a net loss of $318 million (minus $2.02/diluted share) in the year-ago quarter. Range said the increase in quarterly net income from a year ago was driven by a 46% increase in production and lower costs per Mcfe. The company earned $58 million for full-year 2011 (36 cents/diluted share) compared to a net loss of $239 million (minus 52 cents/diluted share) in 2010. Cash flow from operations increase 28% to $737 million from $577 million in 2010.

Although it lost 20% of its production by selling its Barnett Shale assets in 2011, Range posted a 12% increase in production to 554 MMcfe/d. The company expects 30-35% production growth this year.

Range drilled eight wells in the super-rich Marcellus — defined as 1,350 BTU or higher — between spring 2010 and summer 2011. Those wells averaged $4.7 million each, 3,742-foot laterals and 14 frac stages and had an average estimated ultimate recovery (EUR) rate of 400,000 barrels of liquids and 3.9 Bcf of natural gas, not including ethane extraction.

The super rich region covers 125,000 net acres in western Washington County and southern Beaver County in the area west of Pittsburgh. The wet region covers 210,000 net acres just to the east, mostly in Washington.

In the wet and super-rich region, Range is using a new completion technique that clusters more hydraulic fracturing stages on each lateral, from every 300 feet to roughly every 150 to 200 feet. EQT Corp. announced a similar technique last year, believing it could increase production by pumping more hydraulic pressure into the shale (see Shale Daily, Aug. 1, 2011).

The technique added around $1.6 million to the cost of each well but increased production by 60% for EQT. Range expects to also see higher completion costs in return for increased production from fewer wells.

When Range sold its Barnett Shale assets in 2011, it touted its ability to access three stacked shales in Pennsylvania, and after taking a wait-and-see approach now plans to drill in the Upper Devoninan above the Marcellus and in the Utica below the Marcellus (see Shale Daily, March 7, 2011).

The company is drilling its first Upper Devonian test wells in Washington County. It believes the geology and reserve potential is similar to the Marcellus and therefore could double production from existing acreage.

Range also plans to drill its first Utica well in northwestern Pennsylvania this summer, targeting wet-gas in the Point Pleasant formation at 7,000 feet. The company holds 115,000 net acres prospective for wet Utica.

In the Midcontinent, Range recently began drilling horizontal oil wells on its 125,000 net acres in the Mississippian plays in Oklahoma and Kansas. The company is currently running two rigs and could add a third this year.

Finally, in the Cline Shale of west Texas, Range recently drilled an “encouraging” well at 600 boe/d and is currently drilling a second well.

Although not a major focus, Range still operates in the dry northeastern Pennsylvania counties of Clearfield, Centre, Clinton and Lycoming and believes it can earn a 27-32% rate of return on its 180,000 net acres, in part because 75% of its 2012 gas production is hedged at a floor price around 50% above current prices. But by comparison, Range said it can earn 73-99% rate of return on its wet plays in the Marcellus and Mississippian.

Range is currently running four rigs in the dry Marcellus, but could reduce that to one or two later in the year depending on the pricing environment.

Asked about Act 13, the Pennsylvania impact fee, Range offered only praise, saying it standardized regulations while helping communities offset the impacts of development. By comparison, Talisman Energy Inc. praised the legislation in concept but decried the timing (see Shale Daily, Feb. 16).

“We believe the commonwealth now has some of the strongest safety and environmental legislation in the country. Range pioneered or advocated for many of the provisions and it has been implementing these standards voluntarily in the field for some time,” Walker said, praising in particular the “uniform” standards that restrict how local governments can regulate.

That said, Range expects to pay $25 million when the 2011 payment is due in September and $28 million for the next payment in April. The company said the impact fee would eventually add around 20 cents/Mcfe to its costs.