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JULY 2015 INVESTOR PRESENTATION – Range Resources Corp

Range Resources Corp · Jul 28, 2015 · 60 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. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 1
    July 28, 2015 Company Presentation 1
  2. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 2
    Large Scale Growth Story with Low Cost and Low Risk Focused on PER SHARE GROWTH of production and reserves at top-quartile or better cost structure 1. Largest acreage position in core of Marcellus, Upper Devonian and Utica 2. Unit…
  3. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 3
    Range: Low-Cost, Large Scale Company Total Reserves Breakeven Positions (tcfe) (US/mcf) Range 30.00 2.62 Range has both highest net risked Rex 3.19 2.66 resource and lowest breakeven cost in Cabot 18.18 2.71 EQT 15.84 2.74 the…
  4. JULY 2015 INVESTOR PRESENTATION – 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 3.00 70.00 2.50 60.00 Mcfe/share 50.00 Mcfe/share 2.00 40.00 1.50 30.00 1.00 20.00 0.50…
  5. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 5
    SW/NE Pennsylvania Stacked Pays Total (1) Wet Dry Net Acreage Acreage Acreage Upper Devonian 330,000 195,000 525,000 Marcellus 330,000 310,000 640,000 Utica/Point Pleasant - 400,000 400,000 660,000 905,000 1,565,000…
  6. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 6
    Driving Down Unit Costs 4.50 4.00 3.50 3.00 /mcfe 2.50 2.00 1.50 1.00 0.50 0.00 - 2008 2009 2010 2011 2012 2013 2014 2015E Reserve 1.64 1.25 0.83 0.68 0.68 0.66 0.59 0.56 Replacement(1) LOE (2) 0.99 0.82 0.72 0.60 0.41…
  7. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 7
    Sustained Growth with Improving Capital Efficiency Growth achieved despite reducing capital, demonstrating improved efficiency 1,500 30 Capex per Incremental mcfe Production 1,250 25 Production (mmcfepd) 1,000 20 750…
  8. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 8
    Cost & Efficiency Improvements SW Pennsylvania Average Lateral Length Well Cost/Lateral Length 2,500 6,500 2,200 5,500 1,900 4,500 1,600 3,500 1,300 2,500 1,000 700 1,500 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015…
  9. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 9
    Cost & Efficiency Improvements NE Pennsylvania Average Lateral Length Well Cost / Lateral Length 6,000 2,400 2,100 5,000 1,800 4,000 1,500 3,000 1,200 2,000 900 1,000 600 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015…
  10. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 10
    Disciplined Financial Approach Strong, Simple Balance Sheet Bank debt, long-term bonds and common stock No near term maturities, first bond maturity in 2021, after the expected call of 2020s. Bank credit facility matures in 2019…
  11. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 11
    A History of Strong Credit Metrics EBITDAX / Interest 8.0x Range has a long history of 7.0x disciplined financial 6.0x management 5.0x 4.0x Strong EBITDAX coverage of 3.0x interest expense evidences 2.0x the low cost structure…
  12. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 12
    Long Life Reserves Enhances Credit Profile Proved Developed Reserves / Production With a best-in-class reserve life 18.0x Range well above the average index, Ranges low production 16.0x decline provides more stable 14.0x 12.0x…
  13. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 13
    Gas In Place (GIP) Analysis Shows Greatest Potential in SW PA When GIP analysis from the Marcellus, Upper Devonian and Point Pleasant are combined, the largest stacked pay resource is located in SW PA where Range has concentrated…
  14. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 14
    Additional Upside Utica/Point Pleasant OH PA 24 hour IP of 59 Mmcf/d at Claysville Sportsmans Club 11H Producing on an interruptible basis into existing wet gas gathering system 1 well currently completing 1 well planned to be…
  15. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 15
    Range Marcellus 2015 Well Economic Summary The different Marcellus areas provide optionality and a balanced approach to developing acreage and growing overall Marcellus production SW Super-Rich SW Wet SW Dry NE Dry 12.9 Bcfe 17.6…
  16. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 16
    Ranges Natural Gas Liquids Provide Revenue Uplift 4.00 Range is one of the largest /Wellhead Gas NGL producer in 3.40 - 3.50 3.50 Appalachia, (56,000 bpd in 2Q15) with the highest Btu 3.00 inlet gas 1.40 - 1.50 Higher Btu gas…
  17. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 17
    Two Key Marketing Events Spectra - Uniontown to Gas City Pipeline Moves 200 Mmcf/day of Range gas production as anchor shipper from local Appalachia M2 to Midwest markets Under current strip prices this project is expected to capture…
  18. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 18
    Significant Natural Gas Demand Growth Projected Beginning in 2015 LONG TERM US NATURAL GAS DEMAND ROADMAP (BCF/D) Cumulative 2015 2016 2017 2018 2019 2020 2015-2020 LNG Exports Sabine Pass 1.2 1.2 0.6 3.0 Freeport 0.5 1.0 0.4 1.9…
  19. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 19
    U.S. Gas Production Growth Has Slowed Lower Oil Prices will Affect Gas Production 16 Bcf per day of associated gas with oil plays 8 Bcf per day of associated gas with shale oil plays Capital budgets in oil plays typically reduced by…
  20. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 20
    Natural Gas Production Flattening Lower 48 gas leveling out in 2015 Marcellus production flat in 2015 Estimated Total L48 Gas Pipeline Flows Marcellus Pipeline Flows 74 18 72 16 70 14 12 68 10 66 Bcf/d 8 BCF/d…
  21. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 21
    Appalachian Rig Counts Declining Utica / Point Pleasant Rig Count 60 50 Utica/Point Pleasant rig 40 count down 66% from the 30 peak in 2014 20 10 0 Marcellus Rig Count 140 120 100 Marcellus rig count down 80 55% from the…
  22. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 22
    Range Resources Concluding Summary 1. Largest acreage position in core of Marcellus, Upper Devonian and Utica 2. Marcellus development has driven down unit costs over 40%; capital costs down 57% or more on a per lateral foot…
  23. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 23
    Appendix Portfolio Detail 24
  24. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 24
    SW PA Super-Rich Area Marcellus Projected 2015 Well Economics Southwestern PA (High Btu case) NYMEX 12.9 EUR / 1,000 ft. 2.40 Bcfe Gas Price Bcfe EUR 12.9 Bcfe Strip - 26% (182 Mbbls condensate, 987 Mbbls NGLs, and 5.9 Bcf gas)…
  25. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 25
    Southwest PA - Super-Rich Area 2015 Turn in Line Forecast 3,000 Improvements Between Years EUR Well Costs Lateral (Bcfe) ( MM) Lengths (ft.) 2,500 2014 Type Curve - Drilling 12.3 6.8 5,300 Normalized Mcfe/Day per 1,000 ft. 2015…
  26. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 26
    Southwest PA Super Rich Marcellus Horizontal Length (TIL) Average Number of Stages 6,000 30 5,500 5,000 25 Stages 4,500 Feet 20 4,000 3,500 15 3,000 2,500 10 2,000 2013 2014 2015 5 Actual Actual Forecast 2013 2014…
  27. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 27
    SW PA Wet Area Marcellus Projected 2015 Well Economics Southwestern PA (Wet Gas case) NYMEX 17.6 EUR / 1,000 ft. 2.95 Bcfe Gas Price Bcfe EUR 17.6 Bcfe Strip - 28% (48 Mbbls condensate, 1,453 Mbbls NGLs, and 8.6 Bcf gas) Drill and…
  28. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 28
    Southwest PA - Wet Area 2015 Turn in Line Forecast 3,500 Improvements Between Years EUR Well Costs Lateral (Bcfe) ( MM) Lengths (ft.) 3,000 2014 Type Curve - Drilling 12.3 6.1 4,200 Normalized Mcfe/Day per 1,000 ft. 2,500…
  29. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 29
    Southwest PA Wet Marcellus Horizontal Length (TIL) Average Number of Stages 6,500 35 6,000 5,500 30 5,000 25 Stages Feet 4,500 4,000 20 3,500 15 3,000 2,500 10 2,000 2013 2014 2015 5 Actual Actual Forecast 2013…
  30. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 30
    SW PA Dry Area Marcellus Projected 2015 Well Economics Southwestern PA (Dry Gas case) NYMEX 17.1 EUR / 1,000 ft. 2.52 Bcf Gas Price Bcf EUR 17.1 Bcf Strip - 60% Drill and Complete Capital 6.0 MM, 3.00 - 46% (883 K per 1,000…
  31. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 31
    Southwest PA Dry Area 2015 Turn in Line Forecast 6,000 Improvements Between Years EUR Well Costs Lateral (Bcf) ( MM) Lengths (ft.) 5,000 2014 Type Curve - Drilling 13.4 6.6 5,200 Normalized Mcf/Day per 1,000 ft. 2015 Type…
  32. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 32
    Southwest PA Dry Marcellus Horizontal Length (TIL) Average Number of Stages 8,000 40 7,000 35 6,000 30 Stages Feet 25 5,000 20 4,000 15 3,000 10 2,000 5 2013 2014 2015 2013 2014 2015 Actual Actual Forecast EUR…
  33. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 33
    NE PA Dry Area Marcellus Projected 2015 Well Economics Northeastern PA (Dry Gas case) EUR / 1,000 ft. 2.67 Bcf NYMEX 15.2 EUR 15.2 Bcf Gas Price Bcf Drill and Complete Capital 4.9 MM, Strip - 64% (865 K per 1,000 ft.) 3.00 - 42%…
  34. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 34
    Northeast PA Dry Area 2015 Turn in Line Forecast 4,500 Improvements Between Years EUR Well Costs Lateral 4,000 (Bcf) ( MM) Lengths (ft.) 2014 Type Curve - Drilling 13.1 4.7 4,800 3,500 Normalized Mcf/Day per 1,000 ft. 2015…
  35. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 35
    Northeast PA Dry Marcellus Horizontal Length (TIL) Average Number of Stages 6,000 30 5,500 5,000 25 4,500 Feet Stages 4,000 20 3,500 15 3,000 2,500 10 2,000 2013 2014 2015 5 Actual Actual Forecast 2013 2014 2015…
  36. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 36
    Results of Marcellus Tighter Spacing Pilot Projects Projects Conducted in the Wet and Super Rich Areas of the Marcellus 3,000 Normalized for lateral length 500 foot spaced wells produced 80% of 1,000 foot spaced wells 2,500 over a…
  37. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 37
    Targeting/Down Spacing Test Results Encouraging AVERAGE NORMALIZED TIME ZERO DECLINE CURVES 3,500 Optimized targeting 3,000 700 ft. shows a 53% increase in spacing cumulative production after 300 days Average Mcfe/Day per 1,000…
  38. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 38
    Marcellus NGL Pricing Weighted Avg. Realized Marcellus NGL Prices Composite Barrel (1) 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 10% NYMEX WTI 98.61 102.97 96.99 73.11 48.62 57.88 (per bbl) 10% Mont Belvieu 4% Weighted Priced 37.22 33.43…
  39. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 39
    Range NGLs Add Cash Flow Range has the highest Btu gas and a large liquids resource base Range has size and scale Range has a competitive advantage in pricing as most large projects require/benefit from Ranges participation Ranges…
  40. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 40
    Takeaway Largely Overbuilt by 2016-2017 50 LNG exports starting in late 2015 40 Appears to have sufficient takeaway capacity by 2016 30 Bcf/d 20 10 0 Appalcahia Consumption Regional Storage Injections Announced…
  41. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 41
    Announced Appalachian Basin Takeaway Projects 1 of 2 Capacity Approved or Northeast PA Operator Main Line Market Start-up Bcf/d Fully Committed with FERC 2014 Northeast Connector Williams Transco NE Q4'14 0.1 Y Y Iroquois Access…
  42. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 42
    Announced Appalachian Basin Takeaway Projects 2 of 2 Capacity Approved or Southwest Operator Main Line Market Start-up Bcf/d Fully Committed with FERC 2016 Gulf Expansion Ph1 Spectra TETCO Gulf Coast Q4'16 0.3 Y Y Clarington West…
  43. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 43
    Total Appalachian Production Growth is Slowing Appalachian Pipeline Flow Date by Region (Mcf/d) 10,000,000 Shut Ins 9,000,000 8,000,000 7,000,000 NE PA 6,000,000 Central PA SW PA 5,000,000 WV 4,000,000 Utica…
  44. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 44
    Appalachia Gas Transportation Arrangements Projected YE 2015 Projected YE 2016 Projected YE 2018 Transport Transport Transport Mmbtu/day Mmbtu/day Mmbtu/day Regional Direction Cost per Cost per Cost per (Gross) (Gross) (Gross)…
  45. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 45
    What Does the Futures Strip Price Indicate for Regional Basis Dawn 2015 +0.22 2020 -0.12 Algonquin 2015 +2.34 MichCon Transco Z6 2020 +1.13 Chicago CG 2015 +0.14 (NNY) 2015 +0.11 2020 0.00 2015 +0.36 2020 -0.13 2020 +0.32…
  46. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 46
    LNG Exports Developing Projects To-Date LNG Exports by Facility - Bcf/d 14 12 Based on operator 10 announced dates 8 6 4 2 0 Sabine Pass Elba Island Cove Point Freeport Cameron Corpus Christi Lake Charles Golden…
  47. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 47
    Gas In Place (GIP) Marcellus Shale GIP is a function of pressure, temperature, thermal maturity, porosity, hydrocarbon saturation and net thickness Two core areas have been developed in the Marcellus Condensate and NGLs are…
  48. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 48
    Gas In Place (GIP) Point Pleasant Outlined portion represents the area of the highest pressure gradients in the Point Pleasant Note: Townships where Range holds 3,000 or more acres (as of 12/31/2014), and estimated as…
  49. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 49
    Gas In Place (GIP) Upper Devonian Shale The greatest GIP in the Upper Devonian is found in SW PA A significant portion of the GIP in the Upper Devonian is located in the wet gas window Note: Townships where Range holds 3,000…
  50. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 50
    Southern Appalachia Strategic Marketing Advantages 465,000 net acres - Range owns minerals on Nora is strategically positioned to provide gas to southeast markets most of the acreage Contracts in place for 100 Mmcf/d at 0.20/Mmbtu…
  51. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 51
    2014 Nora Enhanced Results From New Completion Design 180 2014 CBM 160 Pumping sand at higher 140 pressures during completion 120 2014 wells with new completion design operations has significantly MCFD 100 increased…
  52. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 52
    Midcontinent Division 360,000 net acres Development activity has been in the Mississippian Chat along the Nemaha Ridge Horizontal Granite Wash, Cleveland and Woodford potential on existing HBP acreage 2015 Planned Activity…
  53. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 53
    Appendix Financial and Reserve Detail 54
  54. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 54
    Capital Efficiencies Driving Growth Budget = 870 Million Budget by Area 4% 5% 13% 95% 93% 83% Drilling Acreage & Seismic Pipelines, Facilities & Others Marcellus Nora/Midcontinent Capital Efficiencies Driving Growth with…
  55. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 55
    Track Record of Building Reserves at Low Costs YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 Track Proved Record of 3.1Building 4.4 Reserves 5.1 at6.5 Low Costs 8.2 10.3 Reserves (Tcfe) Drill Bit Finding 0.69 0.59 0.76…
  56. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 56
    Successful Senior Notes Offering Range sold 750 million of senior notes due 2025 with a 4.875% coupon Ratings Agencies Moodys assigned a Ba1 rating to the new senior unsecured bonds, affirmed its Ba2 rating on the subordinated…
  57. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 57
    Strong, Simple Balance Sheet Pro YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 Q1 2015 Q2 2015 forma Q2 2015(3) ( in millions) Bank borrowings 274 187 739 500 723 912 364 881 Sr. Notes 750 750 Sr. Sub. Notes 1,686 1,788 2,139 2,641 2,350…
  58. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 58
    Debt Maturities Range maintains an orderly debt maturity ladder 900 800 750 750 700 600 600 500 500 500 ( Millions ) 400 364 300 200 100 0 Interest Rate 1.8% 6.75% 5.75% 5.0% 5.0% 4.875% Senior Secured…
  59. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 59
    Gas and Oil Hedging Status Volumes Hedged Average Floor Price Average Cap Price Period ( / Mmbtu) (Mmbtu/day) ( / Mmbtu) 3Q 2015 Swaps 747,500 3.63 Gas Hedging 4Q 2015 Swaps 727,500 3.63 3Q 2015 Collars 145,000 4.07 4.56 4Q…
  60. JULY 2015 INVESTOR PRESENTATION – Range Resources Corp – slide 60
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged (1) Period (bbls/day) Price (/gal) 3Q 2015 Swaps 14,000 0.61 Propane (C3) 4Q 2015 Swaps 12,000 0.55 2016 Swaps 5,500 0.60 3Q 2015 Swaps 3,500 0.72 Normal Butane 4Q…

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