Range Resources Corp.’s planned five-rig drilling program for 2013 in the Mississippian Lime, which was scheduled to start up early next year, already is under way based on encouraging results from a crop of wells in the Nemaha Ridge area, the company said Thursday.

The stepped up program is based on some of the wells drilled to date this year. Two new wells each had 24-hour initial production (IP) rates of more than 1,000 boe/d with 82% liquids. To date this year Range has completed 18 horizontal wells; four of those wells had IP rates of more than 1,000 boe/d that were 83% weighted to liquids.

The updated production results “continue to reaffirm” Range’s estimated ultimate recovery of 600,000 boe for the 3,500-foot-plus lateral well design. Range said it has accumulated 157,000 net acres in the Nemaha Ridge core area.

“Range believes its location along the Nemaha Ridge largely accounts for our positive results,” said CEO Jeff Ventura. “Our technical team has done a great job targeting this core area of the play, which is essential for success.

“We believe our 2012 results with four wells having initial rates over 1,000 boe/d, spanning an 11-mile width of the Nemaha Ridge, confirm that we have identified a core area of the play. We are concentrated in those areas with the best historical oil results with over 4,500 vertical wells confirming our targeted area of development along the Nemaha Ridge.”

Based on its current plans, Range expects to run a five-rig program in 2013, increasing to 10 rigs in 2014 and 15 rigs in 2015.

The multi-year rig program is projected to hold “substantially all” of the company’s current acreage position. Next year’s five-rig program is scheduled to drill 68 wells, consisting of 51 producing wells and 17 water disposal wells.

“With more production history, our first eight horizontal wells from 2009-2011 are performing better than our original type curve for the 2,200-foot lateral wells,” Ventura said. “The production history on the first 18 wells in our 2012 program, with greater than 3,500-foot laterals, is resulting in a projected estimated ultimate recovery of 600,000 boe for this group of longer lateral wells.”

Range officials are “increasingly confident that the horizontal Mississippian play will be a high return, low-cost liquids play that complements our Marcellus Shale play in Pennsylvania.”

The company’s leasehold primarily is on the Nemaha Ridge in Kay County, OK, and Cowley County, KS, running north/south and 15-20 miles wide. The area already had 4,500 vertical wells drilled in the area that Range now controls.

“Along portions of the Nemaha Ridge, there is a Chat component in the formation, which provides up to 30-40% porosity as compared to 3-5% in the lime portion of the formation,” the CEO said. “In addition, since the Nemaha Ridge was thrusted up, Range believes that the area along the ridge has more natural fracturing creating better permeability within the reservoir which enhances hydrocarbon flow.”

Range has been testing the carbonate play since 2006.

“We deliberately tested the play with over 100 new vertical wells of our own before we moved to horizontal development in 2009” and “based on our evaluation to date, Range believes that portion along the Nemaha Ridge where we have focused our development will likely represent the ‘core’ of the horizontal Mississippian Play due to being higher structurally, a higher Chat component, a higher degree of natural fracturing and a higher proportion of oil and natural gas liquids in the production stream.”

This year Range has turned 18 wells to sales with average IP rates of more than 500 boe/d. Ten of the wells have been online for more than a month; the IP rate for those wells was more than 390 boe/d. The average lateral of the 18 wells this year is about 3,800 feet with an average of 19 hydraulic fracture stages.

Range is projecting a well level rate of return of 96% based on a flat $80.00/bbl West Texas Intermediate oil price and a flat $4.00/Mcf New York Mercantile Exchange natural gas price.

“This projected return is based on expected drilling and completion costs of $3.4 million per well, which includes $200,000 for water disposal infrastructure, and includes all estimated costs for gathering, pipeline and processing.”

All of the necessary infrastructure needed is in place to allow for the planned growth in 2013, said the company. “Contracts are in place with two gathering and processing companies covering five facilities in the area with sufficient capacity for the expected growth in natural gas liquids and natural gas.”

Range is targeting one disposal well for each five to eight drilled producing wells. The company’s planned water disposal facilities should handle all of the produced water required for next year’s program. In addition, Range is moving forward with plans to recycle produced water for fracture stimulations.