Shale Player Posts "Outstanding" Earnings

Buoyed by record production and one-time financial gains, Fort Worth-based Range Resources Corp. posted strong earnings of $77.6 million, or 48 cents a share, on revenues of $348.5 million for the first quarter of 2010.

That compared favorably with net income of $32.6 million, or 21 cents a share, on revenues of $276.4 million for the first quarter of 2009.

In a statement issued with the company’s earnings report late Tuesday afternoon, Range CEO John Pinkerton termed the first-quarter results “outstanding” and said they reflected the shift by the natural gas and oil producer into higher-return, lower-cost drilling plays in recent years. Range has been active in headline-making shale gas plays, including the Barnett Shale in North Texas and the Marcellus Shale in the Appalachian region in the eastern U.S.

Range reported record production in the first quarter, averaging the equivalent of 465 million cubic feet of natural gas per day, a 12 percent increase over the first quarter of 2009 and the 29th consecutive quarter of production growth.

The company estimates that it will recover the equivalent of 4 billion to 5 billion cubic feet of natural gas over the producing lifetime of a typical Marcellus Shale well in a choice drilling area in southwest Pennsylvania. That’s up from a prior estimate of 3 billion to 4 billion cubic feet.

In the Barnett Shale, Range said a new well in eastern Hood County was put on production at a rate equivalent to 4.6 million cubic feet of natural gas per day, the best rate it has achieved in that area of the play. A new Parker County well began producing at a rate equivalent to 6 million cubic feet of gas per day, Range said.

The first-quarter earnings were buttressed by a $68.9 million gain on a sale of properties in Ohio and a $46.3 million gain from hedging on energy prices, but was partially offset by other one-time items, including an $18.9 million write-down in the value of some properties.

Excluding the special items, Range’s first-quarter adjusted net income was $25.9 million, or 16 cents a share, compared with $38.4 million, or 24 cents a share, in the first quarter of 2009.

Range said it has 77 percent of its gas production for the rest of 2010 hedged at a floor price of $5.54 per 1,000 cubic feet and has hedged 51 percent of its 2010 gas production at a floor of $5.73. In futures trading Tuesday on the New York Mercantile Exchange, gas closed at $4.22 in contracts for May delivery.

By Jack Smith for the Star-Telegram. April 28, 2010.

SOURCE:
Star-Telegram: “Range Resources Posts Earnings”

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Posted by admin on April 28th, 2010. Filed under Marcellus Shale, Natural Gas, Shale Basins. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry