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Howard Weil 41st Annual Energy Conference – Range Resources Corp

Range Resources Corp · Mar 19, 2013 · 70 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 1
    Howard Weil 41st Annual Energy Conference Jeff Ventura President & CEO March 19, 2013
  2. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 2
    Range Resources Strategy Proven track record of performance Marcellus Shale 26 to 34 Tcfe resource potential Focus on PER SHARE Upper Devonian Shale 12 to 18 Tcfe resource potential GROWTH of production Utica Shale and reserves…
  3. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 3
    Range Significant Growth Potential for Many Years 20%-25% line-of-sight production growth for many years Cash flow growth is expected to outpace production growth High rate of return, high growth, large scale assets Low cost…
  4. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 4
    Financial Position Strong, Simple Balance Sheet Bank debt, subordinated notes and common stock No debt maturity until 2016 (bank) and 2018 (notes) Available liquidity of 1.7 billion after note offering Well Structured Bank Credit…
  5. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 5
    Resilient Credit Metrics Driven by Low Cost Growth Debt / EBITDAX Debt / Total Proved (/mcfe) 4.5x 1.00 Covenant 0.90 BB / Ba2 Peer Average for 2011 4.0x 0.80 3.5x 0.70 3.0x 0.60 0.50 2.5x 0.40 2.0x 0.30 1.5x 0.20 0.10…
  6. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 6
    Range is Focused on Per Share Growth, on a Debt-Adjusted Basis Production/share debt adjusted Reserves/share debt adjusted 1.8 40 1.6 35 1.4 30 Mcfe Mcfe 1.2 25 1.0 20 0.8 15 0.6 10 0.4 5 2007 2008 2009 2010…
  7. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 7
    Ten Years of Double-Digit Production Growth 20%-25% Growth Projected for 2013 1000 900 800 700 Mmcfe/d 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Includes impact of acquisitions…
  8. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 8
    Unit Costs Are a Key Focus 5.00 4.50 4.00 3.50 /mcfe 3.00 2.50 2.00 1.50 1.00 0.50 0.00 - 2008 2009 2010 2011 2012 Reserve 1.64 1.25 0.83 0.68 0.67 Replacement(1) LOE (2) 0.99 0.82 0.72 0.60 0.41 Prod.…
  9. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 9
    Range Low Cost Producer 1st, 2nd, or 3rd in the Bank of America Study for Each of the Last 8 years Reserve Replacement Costs PUD Adjustment Interest Expense G&A Expense Lease Operating Expense 14.00 12.00 10.00 2011 Average…
  10. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 10
    Ranges Reserve Base and Upside are Growing Size = Resource Potential Placement = Proved Reserves 9.0 Proved Reserves (Tcfe) 8.0 7.0 68.0 6.0 5.0 60.0 52.0 4.0 3.0 28.2 31.7 2.0 21.9 1.0 0.0 (Tcfe) YE 2007 YE 2008 YE…
  11. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 11
    1 Million Net Acres Prospective for Shale in PA Northwest 315,000 net acres(1) 89% HBP Northeast 145,000 net acres 69% HBP Greater Pittsburgh Southwest 540,000 net acres(2) 51% HBP Note: Townships where Range…
  12. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 12
    Southwest PA Ranges 540,000 Net Acres are Highly Prospective Approximately 1,650 wells likely have Beaver Butler Armstrong Indiana defined the productive Allegheny limits of the Marcellus (1,150 horizontal & 500 vertical)…
  13. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 13
    Southwest PA Large Upside Potential Small Percentage of Acreage Drilled Prospective acreage 540,000 Assumed spacing 80 acres Potential Marcellus Shale locations 6,750 Producing horizontal wells 400 Drilled wells divided by…
  14. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 14
    Southwest PA Wet Marcellus Over 200 wells placed on Super-Rich production in wet gas area 110,000 acres over the last four years with Wet Gas varying lateral lengths and 220,000 acres frac stages As of the end of 2012, Range has…
  15. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 15
    SW PA Wet Marcellus Projected Development Mode Economics Southwestern PA (wet gas case) with Reserves and economics based on planned 2013 activity of 3,200 foot Pennsylvania State Impact Fee lateral length with 13 frac stages EUR…
  16. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 16
    Southwest PA Super-Rich Marcellus Range plans to add more frac Super-Rich stages to wells drilled in the 110,000 acres super-rich area in 2013 Wet Gas As of the end of 2012, Range 220,000 acres has turned to sales 51 super- rich…
  17. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 17
    SW PA Super-Rich Area Marcellus Projected Development Mode Economics Southwestern PA (High BTU case) with Reserves and economics based on Pennsylvania State Impact Fee planned 2013 activity of 3,800 foot EUR 824 Mbbls & 3.7 Bcf (1.44…
  18. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 18
    Marcellus Wet Gas Provides Significant Price Uplift /Wellhead Mcf 7.15 - 7.25 7.00 6.80 - 6.90 6.50 6.00 3.52 - NGLs NGLs 3.17 - NGLs 3.62 (C2+) 2.19 (C3+) 3.27 (C2+) 5.00 4.00 Condensate 3.54 1.01 Condensate Condensate 3.00…
  19. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 19
    Innovative NGL Marketing Mariner East & West have access to international markets and premium export Ethane/Propane can be tied into NE markets or be pricing for future contracts Ethane export to exported internationally Canada 2013…
  20. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 20
    SW PA Wet Gas Volume Projected to At Least Double by 2016 Maximum ethane recovery would result in wet gas production of 800 Mmcf/d by 2016. Minimum ethane recovery would result in wet gas production of 1.8 Bcf/d. Actual production…
  21. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 21
    Southwest PA Industry Activity in Dry Gas Acreage Range has 210,000 net acres in the dry gas window Beaver Butler Armstrong Indiana 53% of horizontal dry gas Marcellus wells drilled by industry in SW PA have projected recoveries…
  22. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 22
    SW PA Dry Gas Marcellus Development Mode Economics Southwestern PA (dry gas) with Pennsylvania State Impact Fee 2,900 lateral length & 10 stages EUR 7.5 Bcf (Based on 16 wells 100% completed in 2012) Drill and Complete Capital 4.5…
  23. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 23
    Oklahoma/Kansas - Horizontal Mississippian Ranges 160,000 net 64 MBO* acres appear prospective based on vertical well control 67 MBO Over 4,500 Mississippian wells have defined the productive limits On 80 acre spacing (4,000…
  24. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 24
    Horizontal Mississippian Development Mode Economics Based on 25 wells to date 160% EUR 485 Mboe (2009-2011 wells) 140% 600 Mboe (2012 wells) 120% Drill & Complete Capital 3.4 MM 100% All cases include 200 M for SWD IRR…
  25. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 25
    New Markets Increasing Demand for Natural Gas Power Generation Sector Utilities using more gas versus coal due to an increasingly reliable supply, environmental advantages and cost Per EIA, 2012 natural gas used for power generation…
  26. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 26
    Environment, Health and Safety - A Core Value at Range Environmental, Health and Safety issues can affect many aspects of our business. Range feels a deep responsibility to protect our employees, contractors, the public and the…
  27. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 27
    Why Invest in Range Growth in Production, Reserves, & Cash Flow 20%-25% line-of-sight organic production growth for many years Cash flow growth is expected to outpace production growth 7 consecutive years of double-digit production…
  28. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 28
    Contact Information Range Resources Corporation 100 Throckmorton, Suite 1200 Fort Worth, Texas 76102 Main: 817.870.2601 Fax: 817.870.2316 Rodney Waller, Senior Vice President rwallerrangeresources.com David Amend, Investor…
  29. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 29
    Appendix 30
  30. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 30
    Shale Wells Drilled and Permitted LegendLegend RANGE ANADARKO CHEVRON/CHIEF SW Super-Rich Area CABOT CHESAPEAKE CHIEF CONSOL ECA EOG EQT Wet Area EXCO REX SHELL TALISMAN ULTRA XTO/EXXON/PHILLIPS OTHERS LARGER DOTS…
  31. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 31
    SW PA Wet Area Marcellus Type Curve Performance for 3,200 foot lateral, 13 frac stages with projected EUR 8.7 Bcfe 10,000 mmcf/day (residue gas) W/O ETHANE 1,000 W/ ETHANE W/ ETHANE bbls/day Estimated Cumulative…
  32. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 32
    SW PA Super-Rich Area Marcellus Type Curve 10,000 Historical 2012 performance for 3,800 foot laterals and 15 mmcf/day (residue gas) frac stages with projected EUR 1.32 Mmboe W/O ETHANE 1,000 W/ ETHANE W/ ETHANE…
  33. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 33
    SW PA Dry Gas Marcellus Type Curve 100,000 2,900 foot lateral length with 10 stages 10,000 mmcf/day (residue gas) 1,000 Estimated Cumulative Recoveries Residue (Mmcf) 100 1 Year 1,178.1 2 Years 1,709.3 3 Years…
  34. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 34
    Marcellus NGL Pricing Realized Marcellus NGL Prices (2) Currently all ethane sold with the natural gas as additional Btus WTI Oil Marcellus NGL as % Price NGL Price of WTI 1Q 2009 43.20 24.20 56% 2Q 2009 59.77 27.25 46% Wt. Avg.…
  35. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 35
    Proposed Gross Capacity Additions Cryogenic Processing Installed by MarkWest Liberty Capacity Committed to Range Houston, PA Majorsville, WV Third Party Total (Mmcf/day) Volume Volume Volumes* Volume Current Capacity - 2Q 2009 35…
  36. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 36
    The Mariner Project West & East New Connection to Existing Sunoco Pipelines Mariner West Sarnia, Ontario Targeted service by 2H2013 Sunoco Logistics Existing Pipeline Sunoco 40 mile 10 pipe to existing Philadelphia Sunoco pipeline…
  37. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 37
    ATEX Express Pipeline: Transport Ethane from Marcellus / Utica Shale Range has up to 20,000 Bbls/day contracted. Anchor shipper rate of 0.145 per gallon. Published expected commencement 1Q 2014. 1,230 mile pipeline with capacity…
  38. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 38
    Marcellus Area Pipelines Take-Away Capacity Firm Transport & Sales with Firm Transport YE 2013 YE 2015 SW Firm Transport 450 Mmcf/day 650 Mmcf/day Firm Sales 225 Mmcf/day 150 Mmcf/day NE Firm Transport -- -- Firm Sales 120 Mmcf/day…
  39. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 39
    Current Marcellus Net Backs After Firm Transportation Millennium NYMEX Flat Tennessee 300 NYMEX Less 0.20 to 0.50 TCO Columbia NYMEX Less 0.20 Transco NYMEX Flat less 0.30 TRANSMISSION PIPELINES COLUMBIA DOMINION…
  40. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 40
    Northeast PA Pennsylvania Northeast 145,000 Running 1-2 rigs in net acres IP 23 Mmcf/d 2013 to hold acreage In addition to Lycoming County IP 10 Mmcf/day wells, wells tested in IP 8 Mmcf/day Clinton and Centre counties 69%…
  41. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 41
    NE PA Dry Gas Marcellus Projected Development Mode Economics Northeastern PA (dry gas case) with 4,200 lateral length and 14 stages Pennsylvania State Impact Fee 100% EUR 8.5 Bcf (Based on 20 wells) Drill and Complete Capital…
  42. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 42
    NE PA Dry Area Marcellus Type Curve 100,000 4,200 foot lateral length with 14 stages 10,000 Gas Rate (MCFPD) 1,000 Estimated Cumulative Recoveries Residue 100 (Mmcf) 1 Year 1,215.7 2 Years 1,895.8 3 Years 2,430.1 5…
  43. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 43
    Stacked Pay Provides Opportunity for Growth Returns Formation Current Status First four wells successful UPPER DEVONIAN Latest well 24 hour test rate 10.0 Mmcfe/d with ethane recovery 4.0 Mmcf/d gas Upper Devonian Shales 172…
  44. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 44
    Range is 4 for 4 in the Upper Devonian Super-Rich Latest well 24 hour test rate 110,000 acres 10.0 Mmcfe/d with ethane Wet Gas recovery composed of: 220,000 acres 4.0 Mmcf/d gas 172 bbls condensate 826 bbls NGLs Completion method…
  45. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 45
    Industry Well Activity in the Upper Devonian is Increasing 46
  46. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 46
    Northwest PA Wet Utica/Point Pleasant NY Range Lippert Unit 1H test results for Utica/Point Pleasant Net Utica/Point Pleasant Thickness = 285 feet at a depth of approx. 7,000 ft Gas Btu of 1200 to 1250 with 63 gravity…
  47. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 47
    Range has 160,000 Net Acres on or in Close Proximity to the Nemaha Ridge West East NEMAHA RIDGE (Uplift) Location is Important Our location on the Nemaha Chat Uplift offers enhanced Chat development, as well as a Pennsylvania…
  48. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 48
    Avg. Cum. Oil Production per Well from Mississippian * Highest average cumulative oil production from vertical wells are located in Kay County Based on industry reporting sources *Internal estimates indicate 64 MBO…
  49. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 49
    % of Mississippian Wells Classified as Oil Oilier to the East Over 90% of historical wells drilled on the east side of the play are classified as oil wells Based on industry reporting sources 50
  50. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 50
    2009 - 2011 Horizontal Mississippian Type Curves By Product 2009-2011 Development Program 1,000 - 8 wells average EUR is 485 Mboe - 2,197 ft. laterals and 12 stages (averages) - 67% of EUR comprised of liquids - EUR equates to 4-9%…
  51. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 51
    2012 Horizontal Mississippian Type Curves By Product 2012 Development Program 1000 - 17 wells average EUR is 600 Mboe - 3,800 ft. laterals and 19 stages - 70% of EUR comprised of liquids - EUR equates to 6-11% recovery of the…
  52. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 52
    Concentrated Position Allows Low Cost Future Development Range has 160,000 net acres largely Bellmon Plant Superior blocked up for Capacity: 15 Mmcf/d; 30 Mmcf/d 1Q13 47 Mcf/d 2Q13; 61 Mmcf/d 3Q13; 115 Mmcf/d 4Q13 economy of…
  53. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 53
    Efficient Plan to Ramp up Production and Hold Acreage Horizontal Mississippian Development design provides for cost efficiencies now and in the section future Design allows maximum leasehold one mile perpetuation County…
  54. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 54
    Midland Basin Cline Oil Shale Clayton Williams Range has 100,000 Apache Barracuda 45-2H net acres; 91% HBP Firewheel (24-hr IP: 810 Horwood-2151H BOE/D, 3,800 Devon (24-hr IP: 561 lateral and 11 stages) Laredo Bearkat 904H (30-…
  55. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 55
    Midland Basin Vertical Wolfberry RANGE Expected 2013 Activity Additional 5 Wolfberry Wells Wolfberry First six wells had an average 24-hour IP of 513 Boe/d Range Wolfberry wells (262 Boe/d oil, 133 Boe/d NGLs and 977 Mcf/d…
  56. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 56
    Conger Field Cline & Wolfberry RANGE RESOURCES EDMONDSON A Time Strat. Units 37-19 42173334980000 Formations RANGE CONGER AREA PROPERTIES I LM USBY 0. 2 2000 GR I LD 0 150 0. 2 2000 M_CLFK 5500 LSBY Spraberry -…
  57. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 57
    Range Virginia Assets 231,000 net acres 75 RANGE RESOURCES VIRGINIA ACREAGE POSITION Mmcf/day very low Range Acreage decline rate Natural Gas Producing Area Interest in over 3,000 producing wells 6,000+ additional wells to…
  58. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 58
    2012 Reserve Performance Rollforward of Proved Reserves (Bcfe) Extensions & Revision - Year-end 2011 Discoveries Performance Revision - Price Divestitures Production Year-end 2012 366 (257) (149) 1,767 (276) 6,505 5,054 29%…
  59. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 59
    Resource Potential is 7 to 10 Times Proved Reserves Net Unproven Gas Liquids Resource Area Resource (Tcf) (Mmbbls) Potential (Tcfe) Marcellus Shale 21 27 900 1,200 26 34 Upper Devonian Shale 8 12 600 940 12 18 Midcontinent,…
  60. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 60
    2013 Capital Budget Budget = 1.3 Billion Budget by Area Drilling Pipelines, Facilities & Other Marcellus Midcontinent Acreage & Seismic Permian Appalachia / Nora 82% 79% 8% 2% 10% 2% 17% 85% of capital spending directed…
  61. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 61
    Growth at Low Cost Top quartile growth at top quartile cost 3 Year 5 Year 2008 2009(4) 2010 2011 2012 Average Average Reserve growth 19% 18% 42% 14% 29% 36% 38% Drill bit replacement (1) 386% 540% 840% 850% 773% 815% 706% All…
  62. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 62
    Strong, Simple Balance Sheet Year-End Year-End Year-End Year-End Year-End 2012 2009 2010 2011 2012 (Pro-forma) (3) ( in millions) Bank borrowings 324 274 187 739 1 Sr. Sub. Notes 1,384 1,686 1,788 2,139 2,889 Less: Cash (1)…
  63. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 63
    Debt Maturities Range maintains an orderly debt maturity ladder 800 750 700 600 600 500 500 500 ( Millions ) 400 300 300 250 200 100 Credit Facility 1 0 Senior Secured Revolving Credit Facility (as of…
  64. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 64
    Ranges Outstanding Bonds Corporate Rating: BB / Ba2 Outlook: Stable Senior Subordinated Notes Amount Rating Current YTW 7.25% due 2018 250 BB / Ba3 3.20% 8.00% due 2019 300 BB / Ba3 3.05% 6.75% due 2020 500 BB / Ba3 4.00% 5.75%…
  65. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 65
    Why Natural Gas Consumer Savings Could save U.S. households up to as much as 113 billion a year per(1) Pennsylvania consumers saved more than 600 million in 2011 Manufacturing American Products: Low feedstock and energy prices…
  66. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 66
    Natural Gas Less Environmental Impact Water Usage: Least water consumptive energy resources per MMBTU at 0.6-5.8 gallons(1) Nuclear: 8-14 Oil: 8-20 gallons Coal: 13-32 gallons Biodiesel from soy: 14,000-75,000 gallons Surface…
  67. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 67
    Natural Gas Has Greatly Reduced Emissions Switch from coal to natural gas has singlehandedly caused the United States to reduce its annual CO2 emissions by about 500 metric tons. This is about twice as much as the entire global…
  68. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 68
    Gas Hedging Status Volumes Average Average Hedged Floor Price Cap Price (Mmbtu/day) ( / Mmbtu) ( / Mmbtu) 1Q 2013 Swaps 205,000 3.62 1Q 2013 Collars 280,000 4.59 5.05 2Q 2013 Swaps 255,000 3.63 2Q 2013 Collars 280,000 4.59…
  69. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 69
    Oil Hedging Status Volumes Average Average Hedged Floor Price Cap Price (bbls/day) (/bbl) (/bbl) 1Q 2013 Swaps 4,653 96.52 1Q 2013 Collars 3,000 90.60 100.00 2Q 2013 Swaps 4,825 96.64 2Q 2013 Collars 3,000 90.60 100.00 3Q…
  70. Howard Weil 41st Annual Energy Conference – Range Resources Corp – slide 70
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged Price (bbls/day) (/gal) Natural Gasoline (C5) 1Q 2013 Swaps 6,500 2.13 2Q 2013 Swaps 6,500 2.13 3Q 2013 Swaps 6,500 2.13 4Q 2013 Swaps 6,500 2.13 Propane (C3) 1Q…

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