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Baird 2015 Industrial Conference – Range Resources Corp

Range Resources Corp · Nov 9, 2015 · 62 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. Baird 2015 Industrial Conference – Range Resources Corp – slide 1
    Baird 2015 Industrial Conference Alan Farquharson SVP - Reservoir Engineering & Economics November 9, 12015
  2. Baird 2015 Industrial Conference – Range Resources Corp – slide 2
    Range Resources Long-Term Focus Per share growth of production and reserves each year on a debt-adjusted basis Return-focused capital allocation process Approximately 1.6 million acres of stacked pay potential Majority of capital…
  3. Baird 2015 Industrial Conference – Range Resources Corp – slide 3
    Current Outlook for 2016 Capital Budget 20% Growth* % Y-O-Y Production Growth 20% 15% 10% Growth* 10% 5% 0% 550 Million 890 Million 2016 range of estimates 270 million capital budget is estimated to maintain the…
  4. Baird 2015 Industrial Conference – Range Resources Corp – slide 4
    2016 Leverage and Liquidity Outlook Solid, stable coverage on debt covenants EBITDAX to interest minimum of 2.5x (3Q Actual 6.1x) PV9 proved reserves value to debt minimum of 1.5x (3Q Actual 2.5x) Proforma for Nora sale, Range has…
  5. Baird 2015 Industrial Conference – Range Resources Corp – slide 5
    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…
  6. Baird 2015 Industrial Conference – Range Resources Corp – slide 6
    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…
  7. Baird 2015 Industrial Conference – Range Resources Corp – slide 7
    Drilling Efficiencies/Competitive Advantages Average lateral lengths expected to increase to SWPA Average Lateral Length 6,900 ft. in 2016 7,000 6,900 Lateral lengths expected 6,000 to continue to increase in 6,000 the future,…
  8. Baird 2015 Industrial Conference – 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. Baird 2015 Industrial Conference – 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. Baird 2015 Industrial Conference – Range Resources Corp – slide 10
    Range Marcellus 2015 Well Economic Summary SW Super-Rich SW Wet SW Dry NE Dry 12.9 Bcfe 17.6 Bcfe EUR 17.1 Bcf 15.2 Bcf 1,169 Mbbls & 5.9 Bcf 1,501 Mbbls & 8.6 Bcf EUR/1,000 ft. lateral 2.40 Bcfe 2.95 Bcfe 2.52 Bcf 2.67 Bcf…
  11. Baird 2015 Industrial Conference – Range Resources Corp – slide 11
    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 price in Cabot 18.18 2.71 EQT 15.84 2.74 the…
  12. Baird 2015 Industrial Conference – Range Resources Corp – slide 12
    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…
  13. Baird 2015 Industrial Conference – 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. Baird 2015 Industrial Conference – Range Resources Corp – slide 14
    Utica/Point Pleasant Update OH PA 1st well estimated to have 15 Bcf EUR, or 2.8 Bcf per 1,000 lateral foot 2nd well completed with higher sand concentration and brought online in Q3 with choke management at 13 Mmcf per day 2nd…
  15. Baird 2015 Industrial Conference – Range Resources Corp – slide 15
    Two Near-Term Pricing Enhancements Spectra Uniontown to Gas City Pipeline Moves 200 Mmcf per day of Range gas production as anchor shipper from local Appalachia M2 to Midwest markets effective September 1 Added 5.7 million…
  16. Baird 2015 Industrial Conference – Range Resources Corp – slide 16
    Significant U.S. Natural Gas Demand Growth Projected Additional 20 Bcfd of demand by 2020, plus an additional 15 Bcfd by 2025 * Source: EIA, Bernstein estimates * Exports include LNG and exports to Mexico 17
  17. Baird 2015 Industrial Conference – Range Resources Corp – slide 17
    U.S. LNG Exports Expected to be 8 Bcf/day by 2020 per TPH Research report dated 10/8/2015 18
  18. Baird 2015 Industrial Conference – Range Resources Corp – slide 18
    Appalachian Rig Counts Declining Utica / Point Pleasant Rig Count 60 50 Utica/Point Pleasant 40 rig count down 55% 30 from the peak in 2014 20 10 0 Marcellus Rig Count 140 120 Marcellus rig count 100 down 66% from the…
  19. Baird 2015 Industrial Conference – Range Resources Corp – slide 19
    BCF/d 58 74 60 62 64 66 68 70 72 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Source - ITG IR, Ventyx & Bloomberg Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15…
  20. Baird 2015 Industrial Conference – Range Resources Corp – slide 20
    U.S. Natural Gas Production Growth is Slowing 50 7 major regions account for 95% of domestic natural gas production growth Significant reduction in Capital spending in the 7 regions would suggest continuation of this trend 45 Bcf/D…
  21. Baird 2015 Industrial Conference – Range Resources Corp – slide 21
    U.S. Domestic Oil Production Appears to Have Peaked 7 major regions account for 95% of domestic oil production growth 6,000 Production appears to have peaked in 2nd Qtr. 2015 Significant reduction in Capital spending in the 7 regions…
  22. Baird 2015 Industrial Conference – Range Resources Corp – slide 22
    Range Resources Quality, Efficiency, Strength at Low Cost 1. Largest acreage position in core of Marcellus, Upper Devonian and Utica; one of the best EUR/1,000 ft. recoveries and cost/1,000 ft. in the basin 2. Marcellus development…
  23. Baird 2015 Industrial Conference – Range Resources Corp – slide 23
    Appendix Portfolio Detail 24
  24. Baird 2015 Industrial Conference – Range Resources Corp – slide 24
    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…
  25. Baird 2015 Industrial Conference – Range Resources Corp – slide 25
    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) 3.00…
  26. Baird 2015 Industrial Conference – Range Resources Corp – slide 26
    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…
  27. Baird 2015 Industrial Conference – Range Resources Corp – slide 27
    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…
  28. Baird 2015 Industrial Conference – Range Resources Corp – slide 28
    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) 3.00 - 26%…
  29. Baird 2015 Industrial Conference – Range Resources Corp – slide 29
    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…
  30. Baird 2015 Industrial Conference – Range Resources Corp – slide 30
    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…
  31. Baird 2015 Industrial Conference – Range Resources Corp – slide 31
    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…
  32. Baird 2015 Industrial Conference – Range Resources Corp – slide 32
    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…
  33. Baird 2015 Industrial Conference – Range Resources Corp – slide 33
    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…
  34. Baird 2015 Industrial Conference – Range Resources Corp – slide 34
    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%…
  35. Baird 2015 Industrial Conference – Range Resources Corp – slide 35
    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 Normalized Mcf/Day per 1,000 ft. 3,500 2015…
  36. Baird 2015 Industrial Conference – Range Resources Corp – slide 36
    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…
  37. Baird 2015 Industrial Conference – Range Resources Corp – slide 37
    Results of Marcellus Tighter Spacing Pilot Projects Projects conducted in the Wet and Super Rich areas of the Marcellus 3,000 500 foot spaced wells produced 79% of 1,000 foot spaced wells over a five-and-a-half-year period 2,500…
  38. Baird 2015 Industrial Conference – Range Resources Corp – slide 38
    Targeting/Down Spacing Test Results Encouraging Average Normalized Time Zero Decline Curves 3500 Optimized targeting 700 ft. shows a 50% increase in 3000 spacing cumulative production after 500 days Average Mcfe/day per 1000…
  39. Baird 2015 Industrial Conference – Range Resources Corp – slide 39
    Ranges Natural Gas Liquids Provide Revenue Uplift 4.00 /Wellhead Gas 3.70 - 3.80 Range is one of the largest NGL 3.50 producers in 3.00 Appalachia, with the 1.70 - 1.80 highest Btu inlet gas 2.50 NGLs (C2+) Higher Btu gas…
  40. Baird 2015 Industrial Conference – Range Resources Corp – slide 40
    Marcellus NGL Pricing Weighted Avg. Realized Marcellus NGL Prices Composite Barrel (1) 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 10% NYMEX WTI 98.61 102.97 96.99 73.11 48.62 57.88 46.61 (per bbl) 10% Mont Belvieu 4% Weighted Priced 37.22…
  41. Baird 2015 Industrial Conference – Range Resources Corp – slide 41
    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…
  42. Baird 2015 Industrial Conference – Range Resources Corp – slide 42
    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…
  43. Baird 2015 Industrial Conference – Range Resources Corp – slide 43
    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…
  44. Baird 2015 Industrial Conference – Range Resources Corp – slide 44
    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…
  45. Baird 2015 Industrial Conference – Range Resources Corp – slide 45
    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)…
  46. Baird 2015 Industrial Conference – Range Resources Corp – slide 46
    What Does the Futures Strip Price Indicate for Regional Basis Dawn 2015 +0.25 2020 -0.11 Algonquin 2015 +2.34 MichCon Transco Z6 2020 +1.27 Chicago CG 2015 +0.15 (NNY) 2015 +0.13 2020 -0.19 2015 +0.46 2020 -0.15 2020 +0.33…
  47. Baird 2015 Industrial Conference – Range Resources Corp – slide 47
    PointLogic Estimated Daily Production from Pipeline Flows Gross Wellhead Production Estimates - Year-over-Year Change (Bcf/d) 10 8 6 Y-O-Y Growth Bcf/d 4 2 0 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14…
  48. Baird 2015 Industrial Conference – Range Resources Corp – slide 48
    PointLogic - Northeast Daily Pipeline Flows Year-over-Year Daily Local Production from Pipeline Flows Year-over-Year Change (Bcf/d) 6 5 Y-O-Y Growth Bcf/d 4 3 2 1 0 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15…
  49. Baird 2015 Industrial Conference – Range Resources Corp – slide 49
    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…
  50. Baird 2015 Industrial Conference – Range Resources Corp – slide 50
    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…
  51. Baird 2015 Industrial Conference – Range Resources Corp – slide 51
    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…
  52. Baird 2015 Industrial Conference – Range Resources Corp – slide 52
    Appendix Financial and Reserve Detail 53
  53. Baird 2015 Industrial Conference – Range Resources Corp – slide 53
    Disciplined Financial Approach Strong, Simple Balance Sheet Bank debt, long-term bonds and common stock No near-term maturities, first bond maturity in 2021. Bank credit facility matures in 2019 Recent 4.875% senior notes offering met…
  54. Baird 2015 Industrial Conference – Range Resources Corp – slide 54
    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…
  55. Baird 2015 Industrial Conference – Range Resources Corp – slide 55
    Long Life Reserves Enhances Credit Profile Proved Developed Reserves / Production With a best-in-class reserve life 18.0x index, Ranges low production 16.0x Range well above the average decline provides more stable 14.0x 12.0x…
  56. Baird 2015 Industrial Conference – Range Resources Corp – slide 56
    Selected Rating Agency Commentary Ranges credit ratings were recently reaffirmed by both rating agencies Standard & Poors Oct. 26, 2015 Moodys Oct. 12, 2015 Corporate Rating: BB+ / Stable Outlook Corporate Rating: Ba1 / Stable…
  57. Baird 2015 Industrial Conference – Range Resources Corp – slide 57
    Debt Maturities Range maintains an orderly debt maturity ladder 900 800 750 750 700 600 600 500 500 ( Millions ) 400 300 200 111 100 0 Interest Rate 1.8% 5.75% 5.0% 5.0% 4.875% Proforma Nora Sale: Senior…
  58. Baird 2015 Industrial Conference – Range Resources Corp – slide 58
    Strong, Simple Balance Sheet Proforma YE 2012 YE 2013 YE 2014 Q1 2015 Q2 2015 Q3 2015 Nora Sale ( in millions) Bank borrowings 739 500 723 912 364 987 111 Sr. Notes 750 750 750 Sr. Sub. Notes 2,139 2,641 2,350 2,350 2,350 1,850…
  59. Baird 2015 Industrial Conference – Range Resources Corp – slide 59
    Gas and Oil Hedging Status Volumes Hedged Average Floor Price Average Cap Price Period ( / Mmbtu) (Mmbtu/day) ( / Mmbtu) Gas Hedging 4Q 2015 Swaps 727,500 3.63 4Q 2015 Collars 145,000 4.07 4.56 2016 Swaps 630,000 3.42…
  60. Baird 2015 Industrial Conference – Range Resources Corp – slide 60
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged (1) Period (bbls/day) Price (/gal) 4Q 2015 Swaps 12,000 0.55 Propane (C3) 2016 Swaps 5,500 0.60 Normal Butane 4Q 2015 Swaps 3,500 0.72 (NC4) 2016 Swaps 2,500…
  61. Baird 2015 Industrial Conference – Range Resources Corp – slide 61
    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…
  62. Baird 2015 Industrial Conference – Range Resources Corp – slide 62
    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…

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