FORT WORTH, Texas, Aug. 03, 2020 (GLOBE NEWSWIRE) — RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its second quarter 2020 financial results.
Second Quarter Highlights –Well costs averaged less than $600 per lateral foot, including facility costs, the lowest in AppalachiaTransportation, gathering, processing and compression expense improved $0.15 per mcfe, or 10% versus prior yearDirect operating expense improved $0.05 per mcfe, or 31% versus prior yearG&A expense (before certain items) improved $0.05 per mcfe, or 28% versus prior yearProduction taxes improved $0.02 per mcfe, or 40% versus prior yearInterest expense improved $0.02 per mcfe, or 8% versus prior yearDD&A expense improved $0.19 per mcfe, or 28% versus prior yearTotal cash unit costs improved $0.29 per mcfe, or 14% versus prior yearProduction averaged 2,349 Mmcfe per day, approximately 71% natural gasRepurchased approximately $47 million of outstanding notes principal at an average 20% discount to parIn July, signed purchase and sale agreement to divest North Louisiana assets for gross proceeds of $245 million, plus an additional $90 million contingent on future commodity pricesCommenting on the quarter, Jeff Ventura, the Company’s CEO said, “Range continued to make steady progress in the second quarter – significantly improving our cost structure, operating safely, and methodically developing our core asset with peer-leading well costs and capital efficiency. After the sale of our North Louisiana assets, Range’s cost structure and capital productivity will take another meaningful step forward, driven by material improvements in our cash unit costs and a base decline solidly under 20%. Our shallow base decline and peer leading well costs provide Range a sustaining capital requirement per mcfe that we believe is the lowest amongst peers, providing us a solid foundation for generating corporate returns. In 2020, we expect Range to reduce total debt outstanding for the third consecutive year in a row, reflecting our commitment to disciplined capital allocation and a strong balance sheet. Range remains well-positioned to successfully navigate the current commodity environment and benefit from an improved outlook for natural gas and natural gas liquids, particularly given Range’s industry-leading inventory of core natural gas and liquids wells.”Financial DiscussionExcept for generally accepted accounting principles (GAAP) reported amounts, specific expense categories exclude non-cash impairments, unrealized mark-to-market adjustment on derivatives, non-cash stock compensation and other items shown separately on the attached tables. “Unit costs” as used in this release are composed of direct operating, transportation, gathering, processing and compression, production and ad valorem taxes, general and administrative, interest and depletion, depreciation and amortization costs divided by production. See “Non-GAAP Financial Measures” for a definition of each of the non-GAAP financial measures and the tables that reconcile each of the non-GAAP measures to their most directly comparable GAAP financial measure.GAAP revenues for second quarter 2020 totaled $377 million, GAAP net cash provided from operating activities (including changes in working capital) was $79 million, and GAAP earnings was a loss of $147 million ($0.61 per diluted share). Non-GAAP revenues for second quarter 2020 totaled $502 million, and cash flow from operations before changes in working capital, a non-GAAP measure, was $81 million. Adjusted earnings comparable to analysts’ estimates, a non-GAAP measure, was a loss of $25 million ($0.10 per diluted share) in second quarter 2020.North Louisiana Asset SaleSubsequent to June 30, Range signed a purchase and sale agreement to divest the Company’s North Louisiana assets for gross proceeds of $245 million, with the potential for $90 million in additional proceeds contingent on future commodity prices. At the time of the sale, the assets were producing approximately 160 Mmcfe per day, and Range did not have any drilling and completion activity planned for the assets this year. Per the agreement, Range will retain certain commitments through their remaining term. Range intends to use $28.5 million of the sale proceeds to reduce a portion of the retained commitments. The transaction is expected to close in August with an effective date of February 1, 2020.Capital ExpendituresSecond quarter 2020 drilling and completion expenditures were $99 million. In addition, during the quarter, a combined $5 million was spent on acreage and gathering systems. Total year-to-date expenditures were $235 million at the end of the second quarter. Well costs, including all facilities, averaged less than $600 per foot in the second quarter, the lowest normalized well costs in Appalachia. Range remains on track to spend at or below its total capital budget of $430 million for 2020.Financial Position and Buyback Activity
At the end of the second quarter, Range had $639 million drawn on its revolver and over $1.4 billion of additional borrowing capacity under the commitment amount. Range expects its $3.0 billion borrowing base to be unchanged following the sale of its North Louisiana assets. Following the planned closing on the Company’s North Louisiana asset sale in August, Range’s liquidity is expected to exceed $1.6 billion.Range repurchased and retired approximately $47 million in principal amount of its senior and subordinated notes during the second quarter at a weighted average discount to par of 20%. Range also repurchased 200,000 shares of the Company’s common stock during the second quarter at an average price of $2.22 per share. In total, Range has repurchased $360 million in debt principal at a discount and ten million shares since second half 2019. Unit Costs and PricingThe following table details Range’s unit costs per mcfe(a):(a) Excludes stock-based compensation, legal settlements and amortization of deferred financing costs.
(b) May not add due to rounding.The following table details Range’s average production and realized pricing for second quarter 2020:
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