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Simmons Thirteenth Annual Energy Conference – Range Resources Corp

Range Resources Corp · Feb 26, 2013 · 69 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 1
    Range Resources Corporation Company Presentation February 26, 2013
  2. Simmons Thirteenth 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. Simmons Thirteenth 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. Simmons Thirteenth 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 927 million as of December 31, 2012 Well Structured Bank…
  5. Simmons Thirteenth 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. Simmons Thirteenth 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. Simmons Thirteenth 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. Simmons Thirteenth 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. Simmons Thirteenth 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 12 10 2011 Average /Mcfe 8…
  10. Simmons Thirteenth 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. Simmons Thirteenth 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. Simmons Thirteenth 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 13
    Southwest PA Large Upside Potential Calculation 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 14
    Southwest PA Wet Marcellus Super-Rich Over 200 wells placed on 110,000 acres production in wet gas area Wet Gas over the last four years with varying lateral lengths and 220,000 acres frac stages As of the end of 2012, Range has…
  15. Simmons Thirteenth 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 16
    Southwest PA Super-Rich Marcellus Range plans to add more frac Super-Rich stages in the super-rich area 110,000 acres in 2013 Wet Gas As of the end of 2012, Range 220,000 acres has turned to sales 51 super- rich wells with an…
  17. Simmons Thirteenth 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 18
    Marcellus Wet Gas Provides Significant Uplift /Wellhead Mcf 7.15 - 7.25 6.80 - 6.90 7.00 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 1.01…
  19. Simmons Thirteenth 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. Simmons Thirteenth 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 21
    Southwest PA Industry Activity in Dry 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 from…
  22. Simmons Thirteenth 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 23
    Oklahoma/Kansas - Horizontal Mississippian All of Ranges 160,000 64 MBO* net acres appear prospective based on vertical well control 67 MBO Over 4,500 Mississippian wells have defined the productive limits On 80 acre spacing…
  24. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 24
    Horizontal Mississippian Development Mode Economics Based on 25 wells to date 160% EUR 485 Mboe , 600 Mboe 140% Drill & Complete Capital 3.4 MM 120% All cases include 200 M for SWD 100% F&D 8.91/boe (485 Mboe) IRR (1)(2)(3)…
  25. Simmons Thirteenth 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 26
    Environment, Health and Safety- A Core Value at Range Environmental, Health and Safety issues affect every aspect of our business. Range feels a deep responsibility to protect our employees, contractors, the public and the…
  27. Simmons Thirteenth 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. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 28
    Appendix 29
  29. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 29
    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…
  30. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 30
    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…
  31. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 31
    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…
  32. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 32
    SW PA Dry Gas Marcellus Type Curve 100000 2,900 foot lateral length with 10 stages 10000 mmcf/day (residue gas) 1000 Estimated Cumulative Recoveries Residue (Mmcf) 100 1 Year 1,178.1 2 Years 1,709.3 3 Years 2,126.0…
  33. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 33
    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.…
  34. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 34
    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…
  35. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 35
    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…
  36. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 36
    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…
  37. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 37
    Marcellus Area Pipelines Great 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…
  38. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 38
    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…
  39. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 39
    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%…
  40. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 40
    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…
  41. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 41
    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…
  42. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 42
    Asset Depth Stacked Pay 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 bbls condensate 826 bbls NGLs…
  43. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 43
    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…
  44. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 44
    Industry Well Activity in the Upper Devonian is Increasing 45
  45. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 45
    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…
  46. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 46
    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…
  47. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 47
    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…
  48. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 48
    % 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 49
  49. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 49
    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…
  50. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 50
    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…
  51. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 51
    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…
  52. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 52
    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-…
  53. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 53
    Midland Basin Vertical Wolfberry RANGE Expected 2013 Activity Additional 5 Wolfberry Wells Range has 20,000 net acres Wolfberry First six wells had Range Wolfberry an average 24-hour wells IP of 513 Boe/d (262 Boe/d oil, 133…
  54. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 54
    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 -…
  55. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 55
    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…
  56. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 56
    2012 Reserve Performance Proved Reserves Walk Forward Bcfe 2012 Performance 29% year-over-year increase Balance at December 31, 2011 5,054 Crude oil and NGL reserve Discoveries and extensions 1,767 volumes increased 64% Purchases…
  57. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 57
    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,…
  58. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 58
    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…
  59. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 59
    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…
  60. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 60
    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 324 274 187 739 739 Sr. Sub. Notes 1,384 1,686 1,788 2,139 2,139 Less: Cash (1)…
  61. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 61
    Debt Maturities Range maintains an orderly debt maturity ladder 800 739 700 600 600 500 500 500 ( Millions ) 400 300 300 250 200 100 0 Senior Secured Revolving Credit Facility (as of December 31, 2012) Senior…
  62. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 62
    Ranges Outstanding Bonds Corporate Rating: BB / Ba2 Outlook: Stable Senior Subordinated Notes Amount Rating Current YTW 7.25% due 2018 250 BB / Ba3 1.15% 8.00% due 2019 300 BB / Ba3 2.36% 6.75% due 2020 500 BB / Ba3 3.82% 5.75%…
  63. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 63
    Why Natural Gas Utility Savings Could save U.S. households up to as much as 113 billion a year per(1) Pennsylvania consumers saved more than 600 million Manufacturing American Products: Low feedstock and energy prices Could…
  64. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 64
    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…
  65. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 65
    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…
  66. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 66
    Gas Hedging Status Hedges Insulate Cash Flow Volumes Average Average Hedged Floor Price Cap Price (Mmbtu/day) ( / Mmbtu) ( / Mmbtu) 1Q 2013 Swaps 205,000 3.24 1Q 2013 Collars 280,000 4.59 5.05 2Q 2013 Swaps 215,000 3.28…
  67. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 67
    Oil Hedging Status Hedges Insulate Cash Flow 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…
  68. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 68
    Natural Gas Liquids Hedging Status Hedges Insulate Cash Flow (a) Hedged Volumes Hedged Price Natural (bbls/day) (/gal) 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…
  69. Simmons Thirteenth Annual Energy Conference – Range Resources Corp – slide 69
    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…

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