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Credit Suisse Energy Summit – Range Resources Corp

Range Resources Corp · Feb 4, 2013 · 66 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. Credit Suisse Energy Summit – Range Resources Corp – slide 1
    Credit Suisse Energy Summit - Vail, Colorado Alan Farquharson - SVP Reservoir Engineering & Economics February 6, 2013
  2. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Range Resources Corp – slide 3
    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…
  4. Credit Suisse Energy Summit – Range Resources Corp – slide 4
    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…
  5. Credit Suisse Energy Summit – Range Resources Corp – slide 5
    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 9.2 1.0 0.0 (Tcfe) YE 2006 YE 2007…
  6. Credit Suisse Energy Summit – Range Resources Corp – slide 6
    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,…
  7. Credit Suisse Energy Summit – Range Resources Corp – slide 7
    Higher Quality / Lower Cost Wells Driving Capital Efficiency 2012 Drill bit Reserve Replacement over 750%, with F&D under 0.80 for past 4 years 900% 1.80 840% 850% Drill bit Replacement 1.60 800% 773% Drill bit Reserve…
  8. Credit Suisse Energy Summit – Range Resources Corp – slide 8
    2013 Capital Budget Budget = 1.3 Billion Budget by Area Drilling Pipelines, Facilities & Other Marcellus Midcontinent Acreage & Seismic Permian Appalachia / Nora 82% 79% 2% 8% 2% 17% 10% 85% of capital spending…
  9. Credit Suisse Energy Summit – Range Resources Corp – slide 9
    Range Portfolio Provides Flexibility The quality and diversity of its current drilling portfolio allows Range to focus on the highest rates of return each year while adjusting to commodity prices. In 2013 Range focuses on balancing…
  10. Credit Suisse Energy Summit – Range Resources Corp – slide 10
    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…
  11. Credit Suisse Energy Summit – Range Resources Corp – slide 11
    Southwest PA Ranges 540,000 net acres are highly prospective Approximately 1,500 wells likely have Beaver Butler Armstrong Indiana defined the productive Allegheny limits of the Marcellus (1,000 horizontal & 500 vertical)…
  12. Credit Suisse Energy Summit – Range Resources Corp – slide 12
    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…
  13. Credit Suisse Energy Summit – Range Resources Corp – slide 13
    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…
  14. Credit Suisse Energy Summit – Range Resources Corp – slide 14
    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 712…
  15. Credit Suisse Energy Summit – Range Resources Corp – slide 15
    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…
  16. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Range Resources Corp – slide 18
    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 1.04 Mmboe W/O ETHANE 1,000 W/ ETHANE W/ ETHANE…
  19. Credit Suisse Energy Summit – Range Resources Corp – slide 19
    Marcellus Wet Gas Provides Significant 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 1.01…
  20. Credit Suisse Energy Summit – Range Resources Corp – slide 20
    158,000 Net Acres are Prospective in Horizontal Mississippian All of Ranges 158,000 net acres appear prospective with vertical well control Over 4,500 Mississippian wells have defined the productive limits On 80 acre spacing…
  21. Credit Suisse Energy Summit – Range Resources Corp – slide 21
    Range has 158,000 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…
  22. Credit Suisse Energy Summit – Range Resources Corp – slide 22
    Horizontal Mississippian Development Mode Economics EUR 600 Mboe 160% Drill & Complete Capital 3.4MM 150% Includes 200M for SWD 140% F&D 7.27/boe 130% IRR (1)(2)(3) 120% 110% 3,500 NYMEX 100% Laterals Oil Price 600…
  23. Credit Suisse Energy Summit – Range Resources Corp – slide 23
    2012 Horizontal Mississippian Type Curves By Product 1000 2012 Development Program - 17 wells average EUR is 600 Mboe - 3,800 ft. laterals and 19 stages - 67% of EUR comprised of liquids - EUR equates to 6-11% recovery of the…
  24. Credit Suisse Energy Summit – Range Resources Corp – slide 24
    Other Areas for Future Development Upper Devonian Utica/Point Pleasant - First four wells successful - Significant acreage positions in two areas - Latest well 24 hour test rate SW PA dry gas 10.0 Mmcfe/d with ethane recovery NW PA…
  25. Credit Suisse Energy Summit – Range Resources Corp – slide 25
    Safety and Environmental Safety and Environmental is a part of every aspect of our business. As such, protecting our employees, contractors, the public and the environment is held as a core value. Range has established a leadership…
  26. Credit Suisse Energy Summit – Range Resources Corp – slide 26
    Why Invest in Range Proven Track Record of Growth at Low Cost 7 consecutive years of double-digit production and reserve growth per share One of the lowest cost structures in the industry 0.80/mcfe or less finding and development…
  27. Credit Suisse Energy Summit – Range Resources Corp – slide 27
    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…
  28. Credit Suisse Energy Summit – Range Resources Corp – slide 28
    Appendix 28
  29. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Range Resources Corp – slide 30
    Shale Wells Drilled and Permitted SW PA LegendLegend RANGE ANADARKO CHEVRON/CHIEF SW CABOT CHESAPEAKE CHIEF CONSOL ECA EOG EQT EXCO REX SHELL TALISMAN ULTRA XTO/EXXON/PHILLIPS OTHERS LARGER DOTS DRILLED SMALLER…
  31. Credit Suisse Energy Summit – Range Resources Corp – slide 31
    Shale Wells Drilled and Permitted NE PA Tioga Broom Steuben Chemung Range/Talisman - Area of Mutual Interest Tioga Susquehanna Bradford LegendLegend RANGE ANADARKO CHEVRON/CHIEF SW Potter CABOT CHESAPEAKE Lycoming…
  32. Credit Suisse Energy Summit – Range Resources Corp – slide 32
    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.…
  33. Credit Suisse Energy Summit – Range Resources Corp – slide 33
    Proposed Gross Capacity Additions Cryogenic Processing Installed by MarkWest Liberty Capacity Committed to Range Houston, PA Majorsville, WV & Other Third Party Total (Mmcf/day) Volume Volume Volumes Volume April 2009 35 35…
  34. Credit Suisse Energy Summit – Range Resources Corp – slide 34
    MarkWest Liberty Marcellus Project Schedule MarkWest Liberty is developing integrated and scalable gathering, processing, fractionation, and marketing infrastructure to support production in excess of 2.1 Bcf/d Houston Processing and…
  35. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Range Resources Corp – slide 37
    Marcellus Area Pipelines Great Take-Away Capacity Firm Transport & Sales with Firm Transport 2012 2014 SW Firm Transport 355 Mmcf/day 450 Mmcf/day Firm Sales 200 Mmcf/day 200 Mmcf/day NE Firm Transport -- -- Firm Sales 80 Mmcf/day…
  38. Credit Suisse Energy Summit – Range Resources Corp – slide 38
    Southwest PA Industry Activity in Dry Acreage Range has 210,000 net acres in the dry gas window Beaver Butler Armstrong Indiana 45% of horizontal dry gas Marcellus wells drilled by industry in SW PA have projected recoveries…
  39. Credit Suisse Energy Summit – Range Resources Corp – slide 39
    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…
  40. Credit Suisse Energy Summit – Range Resources Corp – slide 40
    SW PA Dry Gas Marcellus Type Curve 100000 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 5 Years 2,805.5 10 Years 4,107.6 20…
  41. Credit Suisse Energy Summit – Range Resources Corp – slide 41
    Northeast PA Update New Developments: 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, new wells tested IP 8 Mmcf/day in…
  42. Credit Suisse Energy Summit – Range Resources Corp – slide 42
    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 5.0MM…
  43. Credit Suisse Energy Summit – Range Resources Corp – slide 43
    NE PA Dry Area Marcellus Type Curve 100,000 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 Years 3,263.5 10 Years 4,680.5 20…
  44. Credit Suisse Energy Summit – Range Resources Corp – slide 44
    Upper Devonian and Utica Shale UPPER DEVONIAN Formation Current Status First four wells successful Latest well 24 hour test rate 10.0 Mmcfe/d with ethane recovery Upper Devonian Shales 4.0 Mmcf/d gas 172 bbls condensate 826…
  45. Credit Suisse Energy Summit – Range Resources Corp – slide 45
    Range is 4 for 4 in the Upper Devonian Super-Rich 110,000 acres Latest well 24 hour test rate Wet Gas 10.0 Mmcfe/d with ethane 220,000 acres recovery composed of: 4.0 Mmcf/d gas 172 bbls condensate 826 bbls NGLs Completion…
  46. Credit Suisse Energy Summit – Range Resources Corp – slide 46
    Industry Well Activity in the Upper Devonian is Increasing 46
  47. Credit Suisse Energy Summit – Range Resources Corp – slide 47
    Northwest PA Range holds 190,000 net Utica/Point Pleasant acres POINT PLEASANT CHESAPEAKE Geatches David - 1 RANGE 1st Well ( Completed) Net Point Pleasant EVEP HUNT Thickness = 150 - 250 Frank - 2H Zimmer -1 CHESAPEAKE 870…
  48. Credit Suisse Energy Summit – Range Resources Corp – slide 48
    Target is Point Pleasant Carbonate Section CHK Area RANGE Carroll Co., OH Location NE OH PA SW RHOZ [G/C3] RHOZ [G/C3] NE 2.3 3 2.3 3 DPHZ [CFCF] DPHZ [CFCF] RHOB [G/C3] RHOB [G/C3] Higher carbonate 0.3 -0.1 0.3 -0.1 2.5 3…
  49. Credit Suisse Energy Summit – 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 49
  50. Credit Suisse Energy Summit – Range Resources Corp – slide 50
    Avg. Cum. Oil Production per Well from Mississippian *Cowley County, Kansas data skewed due to reporting inconsistency in state reports * Highest average cumulative oil production from vertical wells are located in Kay…
  51. Credit Suisse Energy Summit – Range Resources Corp – slide 51
    Concentrated Position Allows Low Cost Future Development Range has 158,000 net acres largely blocked up for economy of scale Gas processing and crude oil refining are Conoco Phillips crude oil refinery Capacity: 187,000 Bbls/d…
  52. Credit Suisse Energy Summit – Range Resources Corp – slide 52
    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…
  53. Credit Suisse Energy Summit – Range Resources Corp – slide 53
    Midland Basin Cline Oil Shale & Wolfberry RANGE 4th Quarter 2012 Activity Apache Additional 3 Wolfberry Locations Devon Range has 100,000 net Laredo Firewheel acres; 91% HBP Cline Shale Horizontal Wolfberry IP: 282 BOPD + 123…
  54. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Range Resources Corp – slide 55
    Range Virginia Assets 353,000 gross, 231,000 net acres Interest in over 3,000 producing wells 6,000+ additional wells to drill F&D < 1.00/mcf LOE 0.60/mcf Proven 60 year track record in the field First horizontal wells…
  56. Credit Suisse Energy Summit – Range Resources Corp – slide 56
    Nine Years of Double-Digit Production Growth 20-25% Growth Projected for 2013 800 700 600 Mmcfe/d 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Includes impact of acquisitions and asset…
  57. Credit Suisse Energy Summit – Range Resources Corp – slide 57
    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…
  58. Credit Suisse Energy Summit – Range Resources Corp – slide 58
    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 - 2007 2008 2009 2010 2011 2012E Reserve 1.59 1.64 1.25 0.83 0.68 0.68 Replacement(1) LOE (2) 0.92 0.99 0.82 0.72 0.60 0.44…
  59. Credit Suisse Energy Summit – Range Resources Corp – slide 59
    Margins are a Key Focus 7.00 6.00 5.00 4.00 /Mcfe 3.00 2.00 1.00 0.00 2007 2008 2009 2010 2011 2012E Realized Prices 8.11 8.66 6.76 5.72 6.20 4.90 Cash Costs 2.47 2.66 2.59 2.59 2.61 2.43(2) Cash Margin 5.64 6.00…
  60. Credit Suisse Energy Summit – Range Resources Corp – slide 60
    Strong, Simple Balance Sheet 1st 2nd 3rd Year-End Year-End Year-End Quarter Quarter Quarter 2009 2010 2011 2012 2012 2012 ( in millions) Bank borrowings 324 274 187 0 235 461 Sr. Sub. Notes 1,384 1,686 1,788 2,388 2,389…
  61. Credit Suisse Energy Summit – Range Resources Corp – slide 61
    Debt Maturities Range maintains an orderly debt maturity ladder 700 600 600 500 500 500 461 ( Millions ) 400 300 300 250 200 100 0 Senior Secured Revolving Credit Facility (as of September 30, 2012)…
  62. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Range Resources Corp – slide 63
    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…
  64. Credit Suisse Energy Summit – Range Resources Corp – slide 64
    Gas Hedging Status Hedges Insulate Cash Flow Volumes Average Average Premium Hedged Floor Price Cap Price Paid (Mmbtu/day) ( / Mmbtu) ( / Mmbtu) ( / Mmbtu) 4Q 2012 Swaps 270,000 3.77 (0.01) 4Q 2012 Collars 279,641 4.76 5.22…
  65. Credit Suisse Energy Summit – Range Resources Corp – slide 65
    Oil Hedging Status Hedges Insulate Cash Flow Volumes Average Average Premium Hedged Floor Price Cap Price Received (bbls/day) (/bbl) (/bbl) (/bbl) 4Q 2012 Calls 2,200 85.00 13.71 4Q 2012 Collars 4,500 75.56 82.78 8.57 2013…
  66. Credit Suisse Energy Summit – Range Resources Corp – slide 66
    Natural Gas Liquids Hedging Status Hedges Insulate Cash Flow (a) Hedged Volumes Hedged Price Natural (bbls/day) (/gal) Gasoline (C5) 4Q 2012 Swaps 6,500 2.2923 (b ( 2013 Swaps 6,500 2.1343 (b) Propane (C3) 4Q 2012 Swaps…

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