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Morgan Stanley Marcellus Utica Conference – Range Resources Corp

Range Resources Corp · Sep 17, 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. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 1
    Morgan Stanley Marcellus-Utica Summit John Applegath- Vice-President- S. Marcellus Shale Div. September 19, 2013
  2. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 2
    Range Resources Strategy Proven track record of performance Marcellus Shale Focus on PER SHARE 38 to 49Tcfe resource potential Upper Devonian Shale 12 to 18 Tcfe resource potential GROWTH of production Utica Shale and reserves at…
  3. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 3
    Range Significant Growth Model 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. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 4
    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…
  5. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 5
    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…
  6. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 6
    1 Million Net Acres Prospective for Shale in PA Northwest 315,000 net acres(1) 89% HBP Northeast 145,000 net acres 69% HBP Southwest 540,000 net acres(2) 51% HBP Note: Townships where Range holds 3,000+ acres are shown…
  7. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 7
    Southwest PA Ranges 540,000 Net Acres Approximately 1,950 industry wells (1,450 horizontal & 500 vertical) likely have defined the productive boundaries of the Marcellus Greater Ranges acreage is Pittsburgh highly prospective…
  8. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 8
    Southwest PA Super-Rich Marcellus Super-Rich As of the end of 2012, Range 110,000 acres Wet Gas has turned to sales 51 Super- 220,000 acres Rich wells with an average lateral length of 3,895 feet and 15 frac stages 17 wells…
  9. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 9
    SW PA Super-Rich Area Marcellus Projected Development Mode Economics Southwestern PA (high Btu case) Reserves and economics based on EUR 1.82 Mmboe (10.9 Bcfe) planned future activity of 4,500 foot lateral length with 22 frac stages,…
  10. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 10
    Southwest PA Wet Marcellus Over 200 Range wells placed Super-Rich Wet Gas on production in wet gas 110,000 acres area over the last four years 220,000 acres with varying lateral lengths and frac stages As of the end of 2012,…
  11. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 11
    SW PA Wet Marcellus Projected Development Mode Economics Southwestern PA (wet gas case) Reserves and economics based on planned future activity of 4,200 foot EUR 12.3 Bcfe (27 Mbbls condensate, 951 lateral length with 21 frac stages,…
  12. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 12
    Southwest PA Industry Activity in Dry Gas Acreage 56% of horizontal dry gas Marcellus wells drilled by industry in SW PA have projected recoveries from 5 to over 20 Bcf per well Ranges SW Pennsylvania dry gas acreage is…
  13. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 13
    SW PA Dry Marcellus Projected Development Mode Economics Southwestern PA (dry gas) Reserves and economics based on EUR 12.2 Bcf planned future activity of 5,000 foot lateral length with 25 frac stages, Drill and Complete Capital 6.0…
  14. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 14
    Southwest PA Super-Rich Marcellus 2013 Well Performance 10,000 2013 Avg Mmcf/day Residue Gas Gas Type Curve 1,000 2013 Avg Bbls/day Liquids 100 Liquids Type Curve Moved EUR from 1.32 Mmboe to 1.82 Mmboe to…
  15. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 15
    Marcellus Wet Gas Provides Significant Price Uplift /Wellhead Mcf 8.00 7.70- 7.80 7.40 7.00 1.95 2.97 - NGLs (C3+) 3.07 NGLs (C2+) 6.00 5.00 1.53 Condensate 4.16 4.00 1.53 Condensate 3.00 Gas Gas 2.00 4.16 3.92 Gas…
  16. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 16
    Tighter Spacing Adds 12 to 15 Tcfe in Super-Rich and Wet Areas Range has completed two 500 foot spaced pilot projects in the super-rich and wet areas of the Marcellus Shale in Washington County PA that have been online for three…
  17. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 17
    Additional Upside Appalachia Stacked Pays As Marcellus drilling holds all depths, industry activity is proving up our SW PA Utica/Point Pleasant and Upper Devonian acreage Utica/Point Pleasant Shale Significant acreage positions in…
  18. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 18
    Innovative NGL Marketing Mariner East & West have access to international markets and premium export Propane/Ethane can be tied into NE markets or be pricing for future contracts Ethane export to exported internationally Canada 2013…
  19. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 19
    Marcellus - Proposed Infrastructure Projects through 2016 Incremental capacity: +7.1 Bcfd North & Northeast Constitution Pipeline Williams NE Supply Link Spectra AIM Project +1.3 Bcfd West & Northwest TETCO/DTE/Enbridge NEXUS…
  20. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 20
    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…
  21. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 21
    Ranges Natural Gas Vehicle Fleet 22
  22. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 22
    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, and low…
  23. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 23
    Appendix 24 24
  24. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 24
    Marcellus and Appalachia Section 25 25
  25. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 25
    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…
  26. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 26
    Current Capability of Ranges Marcellus Area Processing Plant 1.4 Bcf/d gas 1.8 Bcf/d of wet inlet gas 55,000 bbls/d ethane Inlet gas needed to produce 140,000 bbls/d 55,000 bbls ethane per day, assuming minimum extraction…
  27. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 27
    Southwest PA Large Upside Potential Small Percentage of Acreage Drilled Prospective acreage 540,000 Assumed spacing (1,000 foot) 80 acres Potential Marcellus Shale locations 6,750 Producing horizontal wells 460 Drilled wells…
  28. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 28
    Southwest PA Super-Rich Marcellus Well Projection 10,000 EUR 1,038 Mbbls & 4.7 BCF (1.82 Mmboe) 4,500 lateral length 22 frac stages Mcf/d 1,000 100 Bbls/d Estimated Cumulative Recoveries Condensate Residue NGL w/…
  29. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 29
    Southwest PA Wet Marcellus Well Projection 10,000 EUR 978 Mbbls & 6.4 BCF (12.3 Bcfe) 4,200 lateral length 21 frac stages Mcf/d 1,000 100 Estimated Cumulative Recoveries Bbls/d Condensate Residue NGL w/ Ethane…
  30. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 30
    Southwest PA Dry Marcellus Well Projection 100,000 EUR 12.2 BCF 5,000 lateral length 25 frac stages 10,000 1,000 Mcf/d Estimated Cumulative 100 Recoveries Residue (Mmcf) 1 Year 2,576 2 Years 3,699 10 3 Years 4,503…
  31. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 31
    Southwest PA Super-Rich Marcellus Horizontal Length Average Number of Stages 5,000 23 21 4,500 19 4,000 17 Stages Feet 15 3,500 13 3,000 11 9 2,500 7 2,000 5 2010-2012* 2013 2014+ 2010-2012* 2013 2014+ EUR…
  32. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 32
    Southwest PA Wet Marcellus Horizontal Length Average Number of Stages 4,500 25 4,000 20 Stages 3,500 Feet 15 3,000 10 2,500 2,000 5 2007-2012* 2013 2014+ 2007-2012* 2013 2014+ EUR per 1,000 ft. EUR by Year 3.5…
  33. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 33
    Southwest PA Dry Marcellus Horizontal Length Average Number of Stages 5,500 30 5,000 25 4,500 Stages 4,000 20 Feet 3,500 15 3,000 10 2,500 2,000 5 2011-2012* 2013 2014+ 2011-2012* 2013 2014+ EUR per 1,000 ft. EUR…
  34. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 34
    Southwest PA - Economic Summary Super-Rich Wet Dry 1.82 Mmboe (10.9 Bcfe) 12.3 Bcfe EUR 1,038 Mbbls & 4.7 Bcf 978 Mbbls & 6.4 Bcf 12.2 Bcf 0.40 Mmboe EUR/1,000 ft lateral (2.41 Bcfe equivalent) 2.93 Bcfe 2.44 Bcfe 82.7 Mboe…
  35. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 35
    Marcellus NGL Pricing Realized Marcellus NGL Prices (2) Wt. Avg. Composite Barrel (1) WTI Oil Marcellus NGL as % Price NGL Price of WTI 1Q 2010 78.81 44.79 57% 18% 2Q 2010 77.72 39.09 50% Propane C3 Iso Butane iC4 3Q 2010…
  36. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 36
    Marcellus Condensate Pricing Ranges condensate pricing in Realized Marcellus Condensate Prices Appalachia has improved each year since 2010 Condensate WTI Oil Marcellus Condensate as bbls/d Price Condensate Price % of WTI…
  37. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 37
    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…
  38. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 38
    The Mariner Project West & East New Connection to Existing Sunoco Pipelines Mariner West Sarnia, Ontario Project commenced in 3Q2013 Sunoco Logistics Existing Pipeline Sunoco 40 mile 10 pipe to existing Sunoco Philadelphia pipeline…
  39. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 39
    Ethane Ship Currently Being Used by Evergas Photo Courtesy of Evergas 40 40
  40. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 40
    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 to…
  41. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 41
    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…
  42. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 42
    Pennsylvania Stacked Pays Net Acreage Wet Dry Total Acreage Acreage Acreage Upper Devonian 330,000 235,000 565,000 Marcellus 480,000 355,000 835,000 Utica 180,000 400,000 580,000 990,000 990,000 1,980,000 Stacked pays…
  43. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 43
    Northeast PA Running 1-2 rigs in 2013 to hold acreage Northeast In addition to Lycoming 145,000 net acres County wells, wells tested in Clinton and Centre counties 69% of acreage HBP (As of December 31, 2012) There are…
  44. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 44
    Range is 4 for 4 in the Upper Devonian Super-Rich Latest Super-Rich well 110,000 acres (24 hour test rate) 10.0 Wet Gas Mmcfe/d recovery 220,000 acres composed of: 4.0 Mmcf/d gas 172 bbls condensate 826 bbls NGLs Completion…
  45. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 45
    Industry Well Activity in the Upper Devonian is Increasing Note: Townships where Range holds 3,000 or more acres are shown in yellow (As of 12/31/2012) 46 46
  46. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 46
    Western PA Wet and Dry Utica/Point Pleasant POINT PLEASANT ABSENT Range has significant acreage positions in the Utica shale play 400,000 net acres are prospective for dry Utica 180,000 net acres are prospective for wet Utica…
  47. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 47
    Financial and Reserve Section 48 48
  48. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 48
    Financial Position Strong, Simple Balance Sheet Bank debt, subordinated notes and common stock No debt maturity until 2016 (bank) and 2019 (notes) Available liquidity of 1.4 billion under commitment amount Well Structured Bank…
  49. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 49
    Range 1 Low Cost Producer in 2012 1st, 2nd, or 3rd in the Bank of America Study for Each of the Last 9 Years ** 16.00 Lease Operating Expense G&A Expense Interest Expense PUD Adjustment 3-Year Reserve Replacement 14.00…
  50. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 50
    Unit Costs Are a Key Focus 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 1H 2013 Reserve 1.64 1.25 0.83 0.68 0.68 0.68 Replacement(1) LOE (2) 0.99 0.82 0.72 0.60 0.41 0.38…
  51. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 51
    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…
  52. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 52
    Strong, Simple Balance Sheet Year-End Year-End Year-End Year-End 1st Quarter 2nd Quarter 2009 2010 2011 2012 2013 2013 ( in millions) Bank borrowings 324 274 187 739 47 309 Sr. Sub. Notes 1,384 1,686 1,788 2,139 2,890 2,640…
  53. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 53
    Debt Maturities Range maintains an orderly debt maturity ladder 800 750 700 600 600 500 500 500 ( Millions ) 400 Credit Facility 309 300 300 200 100 0 Senior Secured Revolving Credit Facility (as of June…
  54. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 54
    Ranges Outstanding Bonds Corporate Rating: BB / Ba2 Outlook: Stable Senior Subordinated Notes Amount Current YTW 8.00% due 2019 300 2.93% 6.75% due 2020 500 4.21% 5.75% due 2021 500 4.54% 5.00% due 2022 600 5.07% 5.00% due 2023…
  55. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 55
    Resilient Credit Metrics Driven by Low Cost Growth Debt / EBITDAX Debt / Total Proved (/mcfe) 4.5x 1.00 Covenant 0.90 4.0x BB / Ba2 Peer Average for 2012 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…
  56. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 56
    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…
  57. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 57
    Ranges Reserve Base and Upside are Growing Tcfe YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 Proved 2.2 2.7 3.1 4.4(1) 5.1 6.5 Reserves Resource 16 - 22 21 - 29 24 - 32 35 - 52 44 - 60 60 - 83 Potential (2) Proved…
  58. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 58
    Resource Potential is 9 to 13 Times Proved Reserves Net Unproven Gas Liquids Resource Area Resource (Tcf) (Mmbbls) Potential (Tcfe) Marcellus Shale 27 35 1,800 2,400 38 49 Upper Devonian Shale 8 12 600 940 12 18…
  59. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 59
    Results of Marcellus Tighter Spacing Pilot Projects Projects conducted in the Super-Rich and Wet areas of the Marcellus 3,000 500 foot spaced wells produced 2,500 80% of 1,000 foot spaced wells over a three year period 2,000…
  60. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 60
    Gas Hedging Status Volumes Average Average Hedged Floor Price Cap Price (Mmbtu/day) ( / Mmbtu) ( / Mmbtu) 3Q 2013 Swaps 300,000 3.75 3Q 2013 Collars 280,000 4.59 5.05 4Q 2013 Swaps 293,370 3.82 4Q 2013 Collars 280,000 4.59…
  61. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 61
    Oil Hedging Status Volumes Average Average Hedged Floor Price Cap Price (bbls/day) (/bbl) (/bbl) 3Q 2013 Swaps 5,825 96.74 3Q 2013 Collars 3,000 90.60 100.00 4Q 2013 Swaps 6,825 96.79 4Q 2013 Collars 3,000 90.60 100.00…
  62. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 62
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged Price (bbls/day) (/gal) Natural Gasoline (C5) 3Q 2013 Swaps 6,500 2.13 4Q 2013 Swaps 6,500 2.13 Propane (C3) 3Q 2013 Swaps 8,000 0.935 4Q 2013 Swaps 8,000 0.935…
  63. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 63
    Why Natural Gas Consumer Savings Shale production could save U.S. households up to as much as 113 billion a year per through 2015(1) American will likely save on average 650 per household in 2013(2) Per EIA, natural gas will supply…
  64. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 64
    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…
  65. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 65
    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…
  66. Morgan Stanley Marcellus Utica Conference – Range Resources Corp – slide 66
    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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