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Scotia Howard Weil Energy Conference – Range Resources Corp

Range Resources Corp · Mar 22, 2016 · 53 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. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 1
    Scotia Howard Weil 2016 Energy Conference Company Presentation Jeff Ventura Chairman, President & CEO March 22, 2016 1
  2. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 2
    Reduced Capital of 495 Million Results in Production Growth of 8-10% Budget = 495 Million Budget by Area 4% 6% 93% 96% 94% Drilling Acreage & Seismic S. Marcellus N. Marcellus & Other Improved targeting and Completed…
  3. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 3
    Track Record of Impressive Reserve Replacement at Low Cost 3-Year 5-Year 2011 2012 2013 2014 2015 Average Average Reserve Replacement All sources excluding PUD removals(1) 849% 680% 745% 793% 436% 638% 669% All sources (2)…
  4. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 4
    Appalachia Producers 2015 F & D Costs Core Acreage Has Big Impact on Value of Reserves 2.50 N N N N 2.25 e e e e g g g g 2.00 a a a a t t t t 1.75 i i i i 2015 F & D per Mcfe v v v v 1.50 e e e e 1.25 A A A A d d d…
  5. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 5
    Sustained Growth with Improving Capital Efficiency Range has one of the most capital efficient spending programs in the sector 1,500 30 Capex per Incremental mcfe Production 1,250 25 Production (Mmcfepd) 1,000 20 750…
  6. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 6
    Cost & Efficiency Improvements SW Pennsylvania Average Lateral Length Well Cost / Lateral Length 8,000' 2,500 7,000' 2,000 6,000' 5,000' 1,500 4,000' 3,000 ' 1,000 2,000 ' 500 1,000 ' - - 2012 2013 2014 2015 2016 E 2012…
  7. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 7
    Driving Down Unit Costs 4.50 4.00 3.50 /mcfe 3.00 2.50 2.00 1.50 1.00 0.50 0.00 - 2011 2012 2013 2014 2015 2016E DD&A 1.69 1.62 1.44 1.30 1.14 0.96(2) LOE(1) 0.60 0.41 0.36 0.35 0.26 0.25 Prod. Taxes 0.14 0.15 0.13 0.10…
  8. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 8
    Near-Term Price Enhancements RRC Marcellus NG Differential to NYMEX Natural Gas Differential - 0.00 (0.10) Range will be able to utilize a full year of (0.42) (0.20) Spectras Uniontown to Gas City project, which Midpoint (0.30)…
  9. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 9
    Mariner East: Opening New Lanes First Ethane Shipments Faster Propane Loading Combined with VLGC Ships Range is the only producer with current capacity on Mariner East First international shipments of ethane to Europe Optionality…
  10. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 10
    Appalachia Gas Transportation Arrangements Transportation Portfolio additions improve Ranges differentials to NYMEX Regional Direction Projected Avg. 2016 Projected Avg. 2017 Transport Cost Transport Cost Mmbtu/day Mmbtu/day per…
  11. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 11
    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…
  12. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 12
    SW/NE Pennsylvania Stacked Pays Total Wet Dry Net Acreage Acreage Acreage (1) Upper Devonian 335,000 180,000 515,000 Marcellus 335,000 290,000 625,000 Utica/Point Pleasant - 400,000 400,000 670,000 870,000 1,540,000…
  13. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 13
    Range Marcellus 2016 Well Economic Summary Industry leading EUR/1,000 ft. and Cost/1,000 ft. in SW Appalachia SW Super-Rich SW Wet SW Dry NE Dry 16.0 Bcfe 20.6 Bcfe EUR 17.6 Bcf 14.1 Bcf 1,450 Mbbls & 7.3 Bcf 1,756 Mbbls & 10.1…
  14. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 14
    Liquidity and Leverage Outlook At December 31, 2015, Range has 1.8 billion liquidity under bank commitments, which is currently limited to 1.3 billion by senior subordinated note indentures 3 billion borrowing base and 2 billion…
  15. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 15
    Per Share Growth, on a Debt-Adjusted Basis Production/share debt adjusted Reserves/share debt adjusted 3.00 60.00 2.50 50.00 Mcfe/share Mcfe/share 2.00 40.00 1.50 30.00 1.00 20.00 0.50 10.00 - - 2011 2012 2013…
  16. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 16
    U.S. Natural Gas Production is Slowing Supply has now declined by 0.6 1.1 Bcf/d since the September 2015 peak 73.0 71.0 69.0 BCF per day 67.0 65.0 63.0 Sep-14 Feb-15 Mar-15 Apr-15 Sep-15 Feb-14…
  17. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 17
    U.S. Natural Gas Production Growth has Slowed Considerably December 2015 marks the first Y/Y supply decrease since February 2010 12.0% 10.0% Monthly Y/Y % Growth 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Feb-14 Mar-14…
  18. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 18
    Ranges Keys for Success Assets, Agreements & Strategy Low cost structure with Improving capital Better realizations from ability to continue driving efficiency additional takeaway costs lower Longer laterals capacity and sales…
  19. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 19
    Outstanding 2015 Reserve Performance Proved Reserves Walk Forward Bcfe Highlights on 12/31/15 Reserves Balance at December 31, 2014 10,310 436% reserve replacement without PUD reclassification; 248% drilling without revisions…
  20. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 20
    Range: Low-Cost, Large Scale Range has lowest breakeven price in the SW Range - Southwest Rich EQT - Southwest Rich Marcellus per Wood Mackenzie EQT - WV Rich 5.50 Southwestern - Rich Gas Core CONSOL - Southwest Rich 140 tcfe in…
  21. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 21
    SW PA Super-Rich Area Marcellus Projected 2016 Well Economics Southwestern PA (High Btu case) NYMEX 110,00 Net Acres ROR EUR / 1,000 ft. 2.40 Bcfe Gas Price EUR 16.0 Bcfe Strip - 22% (226 Mbbls condensate, 1,224 Mbbls NGLs & 7.3…
  22. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 22
    Southwest PA - Super-Rich Area 2016 Turn in Line Forecast 3,000 Improvements Between Years EUR Well Costs Lateral (Bcfe) ( MM) Lengths (ft.) 2,500 2015 Type Curve - TIL 12.9 5.9 5,367 Normalized Mcfe/Day per 1,000 ft. 2016…
  23. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 23
    Southwest PA Super-Rich Marcellus Horizontal Length (TIL) Average Number of Stages 7,000 35 6,500 6,000 30 5,500 25 Stages Feet 5,000 4,500 20 4,000 3,500 15 3,000 10 2,500 2,000 5 2014 2015 2016 2014 2015 2016…
  24. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 24
    SW PA Wet Area Marcellus Projected 2016 Well Economics Southwestern PA (Wet Gas case) NYMEX 225,00 Net Acres ROR Gas Price EUR / 1,000 ft. 2.95 Bcfe EUR 20.6 Bcfe Strip - 20% (56 Mbbls condensate, 1,700 Mbbls NGLs & 10.1 Bcf gas)…
  25. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 25
    Southwest PA - Wet Area 2016 Turn in Line Forecast 3,000 Improvements Between Years EUR Well Costs Lateral (Bcfe) ( MM) Lengths (ft.) 2,500 2015 Type Curve - TIL 17.6 5.9 5,955 Normalized Mcfe/Day per 1,000 ft. 2016 Type Curve -…
  26. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 26
    Southwest PA Wet Marcellus Horizontal Length (TIL) Average Number of Stages 8,000 40 7,000 35 30 6,000 Stages Feet 25 5,000 20 4,000 15 3,000 10 2,000 5 2014 2015 2016 2014 2015 2016 EUR per 1,000 ft. EUR by…
  27. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 27
    SW PA Dry Area Marcellus Projected 2016 Well Economics Southwestern PA (Dry Gas case) 180,00 Net Acres NYMEX ROR EUR / 1,000 ft. 2.52 Bcf Gas Price EUR 17.6 Bcf Strip - 41% Drill and Complete Capital 5.2 MM 3.00 - 54% (743 K per…
  28. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 28
    SW PA Dry Area 2016 Turn in Line Forecast 3,500 Improvements Between Years EUR Well Costs Lateral (Bcf) ( MM) Lengths (ft.) 3,000 2015 Type Curve - TIL 17.1 6.0 6,798 Normalized Mcf/Day per 1,000 ft. 2,500 2016 Type Curve - TIL…
  29. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 29
    Southwest PA Dry Marcellus Horizontal Length (TIL) Average Number of Stages 8,000 40 7,000 35 30 6,000 Stages Feet 25 5,000 20 4,000 15 3,000 10 2,000 5 2014 2015 2016 2014 2015 2016 EUR per 1,000 ft. EUR by…
  30. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 30
    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 2015 with choke management at 13 Mmcf per day…
  31. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 31
    Cost & Efficiency Improvements Northern Marcellus Average Lateral Length Well Cost/Lateral Length 9,000 ' 2,500 8,000 ' 7,000' 2,000 6,000' 1,500 5,000' 4,000' 1,000 3,000' 2,000' 500 1,000' 0 0 2011 2012 2013 2014 2015…
  32. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 32
    Significant Natural Gas Demand Growth Projected Beginning in 2016 LONG TERM US NATURAL GAS DEMAND ROADMAP (BCF/D) Cumulative 2016 2017 2018 2019 2020 2015-2020 LNG Exports Sabine Pass 1.2 1.2 0.7 3.1 Freeport 0.5 1.0 1.5 Cove…
  33. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 33
    U.S. LNG Exports Expected to be 8 Bcf/day by 2020 per TPH Research report dated 10/08/2015 37
  34. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 34
    Appalachian Rig Counts Declining Utica / Point Pleasant Rig Count 60 50 Utica/Point Pleasant 40 rig count down 73% 30 from the peak in 2014 20 10 0 Marcellus Rig Count 140 120 Marcellus rig count 100 down 79% from the…
  35. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 35
    Appalachian Pipeline Flow Data by Region (Mcf/d) 10,000,000 9,000,000 8,000,000 7,000,000 Mcf/d 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014…
  36. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 36
    U.S. Domestic Oil Production Appears to Have Peaked 7 major regions account for 95% of domestic oil production growth Production appears to have peaked in 2nd Qtr. 2015 6,000 Significant reduction in Capital spending in the 7 regions…
  37. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 37
    Associated Gas Growth Now Near Zero We expect gas production from oil plays to continue to decline in 2016 due to a lack of drilling within these plays 20.0% 18.0% 16.0% Monthly Y/Y % Growth 14.0% 12.0% 10.0% 8.0%…
  38. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 38
    Normalized Production Results of Marcellus Tighter Spacing Projects Projects conducted in the Wet and Super Rich areas of the Marcellus 3,000 Tighter spaced wells turned to sales in 2009 and 2010 Average lateral length of these…
  39. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 39
    Targeting/Down Spacing Test Results Encouraging Average Normalized Time Zero Decline Curves 3,500 3,000 Optimized targeting shows a 53% increase in cumulative production Average Mcfe/day per 1000 ft. after 600 days 2,500…
  40. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 40
    Marcellus NGL Pricing Weighted Avg. Realized Marcellus NGL Prices Composite Barrel (1) 2014 2015 3Q 4Q 1Q 2Q 3Q 4Q NYMEX WTI 96.99 73.11 48.62 57.88 46.61 42.22 12% (per bbl) 11% Mont Belvieu Weighted 40% 32.14 24.38 18.05…
  41. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 41
    Appalachian Production, Consumption & Takeaway - 2015-2018 50 LNG exports starting in early 2016 40 Appears to have sufficient takeaway capacity by 2017 30 Bcf/d 20 10 0 Jul-13 Nov-13 Jul-14 Nov-14…
  42. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 42
    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 2015 Niagara Expansion Kinder Morgan TGP Canada Q4'15 0.2 Y Y Northern Access…
  43. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 43
    Announced Appalachian Basin Takeaway Projects 2 of 2 Capacity Approved or Southwest Operator Main Line Market Start-up Bcf/d Fully Committed with FERC Midwest/Canada/ 2017 Rover Ph1 ETP Gulf Coast Q2'17 1.9 Y Y Rayne/Leach Xpress…
  44. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 44
    What Does the Futures Strip Price Indicate for Regional Basis Dawn 2015 0.30 2020 -0.01 Algonquin 2015 2.24 MichCon Leidy 2020 0.81 Chicago CG 2015 0.19 2015 -1.52 2015 0.15 2020 0.02 2020 -0.60 Transco Z6 (NY) 2020 0.02…
  45. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 45
    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…
  46. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 46
    Gas In Place (GIP) Point Pleasant Bold, outlined portion represents the area of the highest pressure gradients in the Point Pleasant Note: Townships where Range holds 2,000+ acres (as of January 2016) and estimated as prospective,…
  47. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 47
    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 2,000+…
  48. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 48
    Range Maintains an Orderly Debt Maturity Ladder 3,000 Borrowing Base - 3 Billion 2,500 2,000 Bank Commitment - 2 Billion ( Millions ) 1,500 Bond Incurrence Limit - 1.5 Billion 1,000 750 750 600 500 500 95 95…
  49. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 49
    Strong, Simple Balance Sheet YE 2012 YE 2013 YE 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 ( in millions) Bank borrowings(1) 739 500 723 912 364 987 95 Sr. Notes(1) 750 750 750 Sr. Sub. Notes(1) 2,139 2,641 2,350 2,350 2,350 1,850…
  50. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 50
    Early, Continuous Action Taken to Prepare for Low Prices Called high cost 8% notes, reducing annual interest expense by 24 million or 0.06 mcfe June Redemption funded by an equal sized equity offering aimed at accelerating balance…
  51. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 51
    Range Bonds Continue to Trade Well 14.0% Since December highs, Range bonds tightened and continue to trade well relative to a group of 12.0% high quality peer bonds of similar duration including investment grade 10.0% Yield to…
  52. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 52
    Gas and Oil Hedging Status Volumes Hedged Average Floor Price Period (Mmbtu/day) (/Mmbtu) 1Q 2016 Swaps 703,187 3.29 2Q 2016 Swaps 760,000 3.21 Gas Hedging 3Q 2016 Swaps 760,000 3.22 4Q 2016 Swaps 760,000 3.24 2017 Swaps…
  53. Scotia Howard Weil Energy Conference – Range Resources Corp – slide 53
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged Price(1) Period (bbls/day) (/gal) Propane (C3) 2016 Swaps 5,500 0.60 1Q 2016 Swaps 2,500 0.72 Normal Butane 2Q 2016 Swaps 3,750 0.66 (NC4) 3Q 2016 Swaps 3,750 0.66…

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