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June 2016 Corporate Update – Range Resources Corp

Range Resources Corp · Jun 27, 2016 · 68 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. June 2016 Corporate Update – Range Resources Corp – slide 1
    FILED BY RANGE RESOURCES CORPORATION PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933 AND DEEMED FILED PURSUANT TO RULE 14a-12 UNDER THE SECURITIES EXCHANGE ACT OF 1934 SUBJECT COMPANY: RANGE RESOURCES CORPORATION, AND…
  2. June 2016 Corporate Update – Range Resources Corp – slide 2
    Ranges Keys for Success High quality, large scale acreage position containing repeatable projects with good returns improving further as costs are reduced Low cost structure with ability to continue driving costs down Improving…
  3. June 2016 Corporate Update – Range Resources Corp – slide 3
    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 0.23 Prod. Taxes 0.14 0.15 0.13 0.10…
  4. June 2016 Corporate Update – Range Resources Corp – slide 4
    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)…
  5. June 2016 Corporate Update – Range Resources Corp – slide 5
    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 Historic first shipments of ethane from U.S. to Europe…
  6. June 2016 Corporate Update – Range Resources Corp – slide 6
    First VLGC Loading of Range Propane for Export 7
  7. June 2016 Corporate Update – Range Resources Corp – slide 7
    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…
  8. June 2016 Corporate Update – Range Resources Corp – slide 8
    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…
  9. June 2016 Corporate Update – Range Resources Corp – slide 9
    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…
  10. June 2016 Corporate Update – Range Resources Corp – slide 10
    Over 180 Existing Pads Facilitate Future Development 124 pads with 5 or fewer wells, 59 pads with 6 to 9 wells Most pads designed to accommodate 20 wells with the flexibility to drill Marcellus, Utica/Point Pleasant or Upper…
  11. June 2016 Corporate Update – Range Resources Corp – slide 11
    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…
  12. June 2016 Corporate Update – Range Resources Corp – slide 12
    Appalachian Peers Well Cost Comparison Average Average Cost Well Cost* Lateral Length per 1,000 ft. (000s) (feet) (per 1,000 feet) Range 5,630 6,876 819 K Peer A 6,300 7,000 900 Peer B 8,500 9,000 944 Peer C 6,700 7,000…
  13. June 2016 Corporate Update – Range Resources Corp – slide 13
    Unhedged Recycle Ratio Recycle Ratio: (Margin divided by F&D) Assumed 2017 Natural Gas price*: 3.00 Less: 2016 Expected Corp. differential 0.42 2016 Expected All-in cash unit costs 1.87 Adjusted Margin 0.71 Expected future…
  14. June 2016 Corporate Update – Range Resources Corp – slide 14
    Liquidity and Leverage Outlook (Range pre-merger) At March 31, 2016, Range had 1.7 billion liquidity under bank commitments, which is currently limited to 1.2 billion by senior subordinated note indentures 3 billion borrowing base and…
  15. June 2016 Corporate Update – Range Resources Corp – slide 15
    Ranges Keys for Success Assets, Team, Agreements & Strategy Low cost structure with Improving capital Better realizations from ability to continue driving efficiency additional takeaway costs lower Longer laterals; 2016 plan capacity…
  16. June 2016 Corporate Update – Range Resources Corp – slide 16
    Range Resources/Memorial Resource Development Proposed Merger Announced May 16, 2016 Closing expected late 3rd Qtr. / early 4th Qtr. 2016 17
  17. June 2016 Corporate Update – Range Resources Corp – slide 17
    Highlights of Merger Core acreage positions in two of the most prolific high- quality natural gas plays in North America Immediately cash flow accretive and credit enhancing Combination of two low-cost gas producers with…
  18. June 2016 Corporate Update – Range Resources Corp – slide 18
    Transaction Details Range Resources (Range) merges with Memorial Resource Development (MRD) for 0.375 shares of Range per MRD share; All-stock transaction Consideration Implied value of 15.75 per MRD share, a 17% premium based on…
  19. June 2016 Corporate Update – Range Resources Corp – slide 19
    Immediately Accretive & Credit Enhancing Pro Forma Annual Consensus Metrics* Existing RRC % Change RRC 2016E Production 520 Bcfe 670 Bcfe +29% 2016E Production per day 1,420 Mmcfe 1,830 Mmcfe +29% 2016E Cash Flow 375 Million 780…
  20. June 2016 Corporate Update – Range Resources Corp – slide 20
    Marketing and Operational Efficiencies Marketing MRDs position gives Range a Marcellus presence in the Gulf Coast in advance of additional transportation availability out of Appalachia Opportunities to optimize Ranges…
  21. June 2016 Corporate Update – Range Resources Corp – slide 21
    Appendix 22
  22. June 2016 Corporate Update – Range Resources Corp – slide 22
    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…
  23. June 2016 Corporate Update – Range Resources Corp – slide 23
    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…
  24. June 2016 Corporate Update – Range Resources Corp – slide 24
    U.S. Natural Gas Production Growth has Slowed Considerably December 2015 marked 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% Mar-14…
  25. June 2016 Corporate Update – Range Resources Corp – slide 25
    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)…
  26. June 2016 Corporate Update – Range Resources Corp – slide 26
    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…
  27. June 2016 Corporate Update – Range Resources Corp – slide 27
    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…
  28. June 2016 Corporate Update – Range Resources Corp – slide 28
    SW PA Super-Rich Area Marcellus Projected 2016 Well Economics Southwestern PA (High Btu case) NYMEX 110,000 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…
  29. June 2016 Corporate Update – Range Resources Corp – slide 29
    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…
  30. June 2016 Corporate Update – Range Resources Corp – slide 30
    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…
  31. June 2016 Corporate Update – Range Resources Corp – slide 31
    SW PA Wet Area Marcellus Projected 2016 Well Economics Southwestern PA (Wet Gas case) NYMEX 225,000 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)…
  32. June 2016 Corporate Update – Range Resources Corp – slide 32
    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 -…
  33. June 2016 Corporate Update – Range Resources Corp – slide 33
    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…
  34. June 2016 Corporate Update – Range Resources Corp – slide 34
    SW PA Dry Area Marcellus Projected 2016 Well Economics Southwestern PA (Dry Gas case) 180,000 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…
  35. June 2016 Corporate Update – Range Resources Corp – slide 35
    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…
  36. June 2016 Corporate Update – Range Resources Corp – slide 36
    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…
  37. June 2016 Corporate Update – Range Resources Corp – slide 37
    Utica Wells Wellhead Pressure vs. Cumulative Production Early Time Production Data (Including Flowback/Test Data) RRC DMC Properties well one of the best in the Utica 30 Mmcfd 10,000 25 Mmcfd 13,200 TVD* 20 Mmcfd 8,000 13,400…
  38. June 2016 Corporate Update – Range Resources Corp – slide 38
    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…
  39. June 2016 Corporate Update – Range Resources Corp – slide 39
    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…
  40. June 2016 Corporate Update – Range Resources Corp – slide 40
    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…
  41. June 2016 Corporate Update – Range Resources Corp – slide 41
    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…
  42. June 2016 Corporate Update – Range Resources Corp – slide 42
    Returning to Existing Pads SW Wet Ability to target our best areas with 3.6+ Bcfe/1,000 ft. New wells have EURs 22% higher than the average wet well Significant cost savings 100,000 Drilled wells - 2015 Additional 5 wells…
  43. June 2016 Corporate Update – Range Resources Corp – slide 43
    Returning to Existing Pads SW Dry Ability to target our best areas with 3.0+ Bcfe/1,000 ft. New wells have EURs 20% higher than the average dry well Significant cost savings 100,000 Drilled wells - 2015 10,000 Wellhead Gas…
  44. June 2016 Corporate Update – Range Resources Corp – slide 44
    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…
  45. June 2016 Corporate Update – Range Resources Corp – slide 45
    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,…
  46. June 2016 Corporate Update – Range Resources Corp – slide 46
    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+…
  47. June 2016 Corporate Update – Range Resources Corp – slide 47
    Macro Section 48
  48. June 2016 Corporate Update – Range Resources Corp – slide 48
    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…
  49. June 2016 Corporate Update – Range Resources Corp – slide 49
    U.S. LNG Exports Expected to be 8 Bcf/day by 2020 per TPH Research report dated 10/08/2015 50
  50. June 2016 Corporate Update – Range Resources Corp – slide 50
    U.S. Natural Gas Exports to Mexico 3.5 Mexico exports have recently been larger than forecast, with the trend expected to continue 3.0 2.5 2.0 Bcf/d 1.5 1.0 0.5 0.0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12…
  51. June 2016 Corporate Update – Range Resources Corp – slide 51
    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…
  52. June 2016 Corporate Update – Range Resources Corp – slide 52
    Associated Gas Production Gas production from oil plays expected to continue declining in 2016 due to a lack of drilling within these plays 20.0% 15.0% Year over Year % Growth 10.0% 5.0% 0.0% -5.0% -10.0%…
  53. June 2016 Corporate Update – Range Resources Corp – slide 53
    Non-Appalachian Gas Basins Growth by Area Year over Year % Growth 4% 2% 0% -2% -4% -6% -8% Source Bentek, EIA 54
  54. June 2016 Corporate Update – Range Resources Corp – slide 54
    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 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15…
  55. June 2016 Corporate Update – Range Resources Corp – slide 55
    Total U.S. Natural Gas Production Growth by Area Year over Year % Growth Total Gas 12% 8% 4% 0% -4% Source Bentek, EIA 56
  56. June 2016 Corporate Update – Range Resources Corp – slide 56
    10 20 30 40 50 60 0 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 2014 peak May-13 Jul-13 Source RigData as of 6/3/2016 Sep-13 Nov-13 Jan-14 Mar-14 down 86% from the Marcellus rig count…
  57. June 2016 Corporate Update – Range Resources Corp – slide 57
    Marcellus NGL Pricing Weighted Avg. Realized Marcellus NGL Prices Composite Barrel (1) 2015 2016 1Q 2Q 3Q 4Q 1Q NYMEX WTI 10% 48.62 57.88 46.61 42.22 33.56 (per bbl) 9% 3% Mont Belvieu Weighted 18.05 18.32 17.16 17.24 13.60…
  58. June 2016 Corporate Update – Range Resources Corp – slide 58
    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…
  59. June 2016 Corporate Update – Range Resources Corp – slide 59
    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…
  60. June 2016 Corporate Update – Range Resources Corp – slide 60
    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…
  61. June 2016 Corporate Update – Range Resources Corp – slide 61
    What Does the Futures Strip Price Indicate for Regional Basis Dawn 2015 0.30 2020 -0.06 Algonquin 2015 2.24 MichCon Leidy 2020 1.05 Chicago CG 2015 0.19 2015 -1.57 2015 0.15 2020 0.05 2020 -0.71 Transco Z6 (NY) 2020 0.04…
  62. June 2016 Corporate Update – Range Resources Corp – slide 62
    Appendix Financial Detail 63
  63. June 2016 Corporate Update – Range Resources Corp – slide 63
    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 31 Million…
  64. June 2016 Corporate Update – Range Resources Corp – slide 64
    Strong, Simple Balance Sheet Debt at lowest level in past 3 years YE 2013 YE 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 ( in millions) Bank borrowings(1) 500 723 912 364 987 95 31 Sr. Notes(1) 750 750 750 750 Sr. Sub.…
  65. June 2016 Corporate Update – Range Resources Corp – slide 65
    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…
  66. June 2016 Corporate Update – Range Resources Corp – slide 66
    Range Bonds Continue to Trade Well Since December highs, Range bonds tightened significantly and continue to trade well 14.0% relative to a group of high quality peer bonds of similar duration 12.0% 10.0% Yield to worst…
  67. June 2016 Corporate Update – Range Resources Corp – slide 67
    Gas and Oil Hedging Status Volumes Hedged Average Floor Price Period (Mmbtu/day) (/Mmbtu) 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 205,000 2.83 2018 Swaps 50,000…
  68. June 2016 Corporate Update – Range Resources Corp – slide 68
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged Price(1) Period (bbls/day) (/gal) 2H 2016 Swaps 500 0.22 Ethane (C2) 2017 Swaps 1,000 0.25 Propane (C3) 2016 Swaps 5,500 0.60 Normal Butane 2Q 2016 Swaps 3,918…

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