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January 2017 Investor Presentation – Range Resources Corp

Range Resources Corp · Jan 2, 2017 · 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. January 2017 Investor Presentation – Range Resources Corp – slide 1
    January 2017
  2. January 2017 Investor Presentation – Range Resources Corp – slide 2
    Range Today Market Snapshot NYSE Symbol: RRC Market Cap (a): 8.5B Net Debt (b): 3.9B Enterprise Value: 12.4B Headquarters: Fort Worth, TX 3Q16 Highlights High Quality Stacked Pay Position Closed Merger with Memorial Resource Net…
  3. January 2017 Investor Presentation – Range Resources Corp – slide 3
    Range Strategy Growth of Reserves and Production on a Per Share Debt Adjusted Basis Southern Marcellus Stacked pay opportunities include the Marcellus, Utica and Upper Devonian. Expand Margins Through Cost Improvements, Capital…
  4. January 2017 Investor Presentation – Range Resources Corp – slide 4
    Range Resources Timeline Build and High Grade the Inventory 2012 - 2016 2008 - 2012 2004 - 2008 Sold Permian properties in southeast New Mexico and 2000 - 2004 Sold West Texas Texas for 275 million properties for 182 million…
  5. January 2017 Investor Presentation – Range Resources Corp – slide 5
    Preliminary 2017/2018 Plans Projecting Reported 33-35% Y-O-Y Growth in 2017 and 20% Y-O-Y Growth in 2018 3,000 2.5 Bcfe/d 2,500 2.1 Bcfe/d 2,000 Assumes Mmcfe/d 1.5 3.25/mcf Bcfe/d gas and 1,500 60/bbl oil Assumes…
  6. January 2017 Investor Presentation – Range Resources Corp – slide 6
    Investment Summary High Quality Large, core acreage position in the Marcellus and North Louisiana Acreage Position Low-risk projects with high rates of return at current prices Improving differentials across all commodities…
  7. January 2017 Investor Presentation – Range Resources Corp – slide 7
    High Quality Acreage Position - Appalachia Assets Over 1.5 million net effective acres(a) leads to decades of drilling inventory Gas In Place (GIP) analysis shows the greatest potential is in Southwest Pennsylvania Low risk and…
  8. January 2017 Investor Presentation – Range Resources Corp – slide 8
    High Quality Acreage Position Southwest Appalachia PA Increased optionality due to quality of acreage position, gathering system, available locations and existing pads OH Flexibility to drill Dry, Super-Rich and Wet WV areas…
  9. January 2017 Investor Presentation – Range Resources Corp – slide 9
    High Quality Acreage Position North Louisiana 220,000(a) net acres of stacked pay potential in North Louisiana Currently focused on Upper Red with optionality for additional targets Acreage favorably located near growing Gulf…
  10. January 2017 Investor Presentation – Range Resources Corp – slide 10
    High Quality Acreage Position North Louisiana The over-pressured Lower Cotton Valley (LCV) interval exists across the area and can be seen in the cross sections below A The LCV is gas charged as you move south from the Terryville…
  11. January 2017 Investor Presentation – Range Resources Corp – slide 11
    Diversified Marketing Strategy Appalachian Production Has Ability to Reach Multiple Markets Currently selling natural gas in the Gulf Coast, Midwest, Southeast and Northeast markets Ability to export ethane and propane internationally…
  12. January 2017 Investor Presentation – Range Resources Corp – slide 12
    Natural Gas Marketing Appalachian Takeaway Capacity First-mover advantage allowed Range to secure capacity on low-cost expansion projects out of Appalachia Total Appalachian Takeaway Capacity Gross Mmcf/d 2,000,000…
  13. January 2017 Investor Presentation – Range Resources Corp – slide 13
    Innovative NGL Marketing Agreements Enhance Pricing Mariner East ethane sent to INEOS for export in Europe Mariner East propane can be sold internationally or into premium NE winter markets Mariner West ethane sent to Nova Chemical…
  14. January 2017 Investor Presentation – Range Resources Corp – slide 14
    Near-Term Price Enhancements Natural Gas Differential(a) NGL as a % of WTI Condensate Differential - 30% - (0.10) (3.00) (6.00)- (6.00)- (0.30)- 26%- 26%- (0.20) 25% (7.00) (7.00) (0.35) 28% 28% (6.00) (0.30) 25% (0.46) (9.00)…
  15. January 2017 Investor Presentation – Range Resources Corp – slide 15
    Cost Improvements Remain a Focus Driving Down Operating Costs Corporate margins improving as cash costs have declined 40% since 2011 0.40 0.35 54% Lower debt per mcfe of production from growth 0.30 Decline at or near cash flow…
  16. January 2017 Investor Presentation – Range Resources Corp – slide 16
    Margin Expansion Drives Strong Unhedged Recycle Ratio Corporate Margin Improvement Expected Margins set to expand due to improved unit costs and realized pricing 45% 40% Unhedged Cash Margin Unhedged recycle ratio of 2.6x…
  17. January 2017 Investor Presentation – Range Resources Corp – slide 17
    Existing Marcellus Pads Improve Capital Efficiency Expansive inventory of over 200 pads in Appalachia 124 pads with 5 or fewer wells, 59 pads with 6-9 wells and new pads in progress Pads accommodate 20 wells with the flexibility…
  18. January 2017 Investor Presentation – Range Resources Corp – slide 18
    Strong, Simple Balance Sheet 4 Billion credit facility unanimously reaffirmed by bank group (3B borrowing base, 2B committed) Strong Capital Structure(a) Liquidity of 800 million at the end of 3Q16 (millio ns) 2Q16 3Q16 Bank Debt 3…
  19. January 2017 Investor Presentation – Range Resources Corp – slide 19
    Long-Term Value Creation High-quality, large-scale acreage position containing repeatable projects with high rates of return Low cost structure with ability to continue driving costs lower Margin improvements expected to drive…
  20. January 2017 Investor Presentation – Range Resources Corp – slide 20
    Appendix
  21. January 2017 Investor Presentation – Range Resources Corp – slide 21
    Cost Efficiency Improvements SW Pennsylvania Average Lateral Length Well Cost / Lateral Length 8,000 7,000 2,500 6,000 2,000 5,000 4,000 1,500 3,000 1,000 2,000 500 1,000 - - 2012 2013 2014 2015 2016 E 2012 2013 2014 2015 2016 E…
  22. January 2017 Investor Presentation – Range Resources Corp – slide 22
    Mariner East: Opening New Lanes Only producer with current capacity on Mariner East Historic first shipments of ethane from U.S. to Europe Optionality of selling propane internationally or in local markets Improved ethane and…
  23. January 2017 Investor Presentation – Range Resources Corp – slide 23
    Track Record of Impressive Reserve Replacement at Low Cost 3-Year 5-Year Reserve Replacement 2011 2012 2013 2014 2015 Average (3) Average (3) All sources excluding PUD removals(1) 849% 680% 745% 793% 436% 638% 669% All sources (2)…
  24. January 2017 Investor Presentation – Range Resources Corp – slide 24
    North Louisiana Terryville Upper Red Projected 2016 Well Economics North Louisiana (Upper Red case) 220,000 Net Acres NYMEX Gas Rate of Price Return EUR / 1,000 ft. 2.30 Bcfe EUR 17.5 Bcfe Strip - 71% (149 Mbbls condensate, 552…
  25. January 2017 Investor Presentation – Range Resources Corp – slide 25
    Upper Red Average Production by Year Time Zero 4500 4000 3500 Normalized Mcfe/d per 1000 ft. 3000 2500 2000 1500 1000 500 0 - 30 60 90 120 150 180 210 240 270 300 330 Days RRC Terryville Upper Red Acq…
  26. January 2017 Investor Presentation – Range Resources Corp – slide 26
    SW PA Dry Area Marcellus 2016 Well Economics Southwestern PA (Dry Gas case) 180,000 Net Acres NYMEX Rate of Gas Price Return EUR / 1,000 ft. 2.52 Bcf Strip - 59% EUR 17.6 Bcf Drill and Complete Capital 5.2 MM 3.00 - 54% (743 K…
  27. January 2017 Investor Presentation – Range Resources Corp – slide 27
    SW PA Dry Area 2016 Turn in Line Forecast 3,500 3,000 Normalized Mcf/Day per 1,000 ft. 2,500 2,000 1,500 1,000 500 Designed Facility Constraints 0 0 100 200 300 400 500 600 700 Days 2015 Actual…
  28. January 2017 Investor Presentation – Range Resources Corp – slide 28
    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 2014 2015 2016 2014 2015 2016 EUR per 1,000 ft. EUR by…
  29. January 2017 Investor Presentation – Range Resources Corp – slide 29
    SW PA Wet Marcellus 2016 Well Economics Southwestern PA (Wet Gas case) NYMEX Rate of 225,000 Net Acres Gas Price Return EUR / 1,000 ft. 2.95 Bcfe Strip - 25% EUR 20.6 Bcfe (56 Mbbls condensate, 1,700 Mbbls NGLs & 10.1 Bcf gas)…
  30. January 2017 Investor Presentation – Range Resources Corp – slide 30
    Southwest PA Wet Area 2016 Turn in Line Forecast 3,000 2,500 Normalized Mcfe/Day per 1,000 ft. 2,000 1,500 1,000 500 0 0 100 200 300 400 500 600 700 Days 2015 Actual Production 2014 Actual Production…
  31. January 2017 Investor Presentation – Range Resources Corp – slide 31
    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…
  32. January 2017 Investor Presentation – Range Resources Corp – slide 32
    SW PA Super-Rich Area Marcellus 2016 Well Economics Southwestern PA (High Btu case) 110,000 Net Acres NYMEX Rate of Gas Price Return EUR / 1,000 ft. 2.40 Bcfe Strip - 26% EUR 16.0 Bcfe (226 Mbbls condensate, 1,224 Mbbls NGLs & 7.3…
  33. January 2017 Investor Presentation – Range Resources Corp – slide 33
    Southwest PA Super-Rich Area 2016 Turn in Line Forecast 3,000 2,500 Normalized Mcfe/Day per 1,000 ft. 2,000 1,500 1,000 500 0 0 100 200 300 400 500 600 700 Days 2015 Actual Production 2014 Actual…
  34. January 2017 Investor Presentation – Range Resources Corp – slide 34
    Southwest PA Super-Rich Marcellus Horizontal Length (TIL) Average Number of Stages 35 7,000 6,500 30 6,000 5,500 25 Stages Feet 5,000 20 4,500 4,000 15 3,500 3,000 10 2,500 2,000 5 2014 2015 2016 2014 2015…
  35. January 2017 Investor Presentation – Range Resources Corp – slide 35
    Normalized Production Results of Marcellus Tighter Spacing Projects conducted in the Wet and Super-Rich Marcellus 3,000 2,500 Tighter spaced wells turned to sales in 2009 and 2010 Average lateral length of these wells is 2,861…
  36. January 2017 Investor Presentation – Range Resources Corp – slide 36
    Targeting/Downspacing Test Results Encouraging Average Normalized Time Zero Decline Curves 3,500 700 Well Spacing 3,000 Optimized targeting shows a 53% increase in cumulative production Average Mcfe/day per 1000 ft. after…
  37. January 2017 Investor Presentation – Range Resources Corp – slide 37
    Returning to Existing Pads SW Wet 100,000 Drilled Additional 5 wells Wells - 2015 10,000 Future Wellhead Gas (MCFD) Locations 1,000 100 Drilled 10 Wells - 2010 1 Oct-12 Apr-13 Nov-13 May-14 Dec-14 Jun-15…
  38. January 2017 Investor Presentation – Range Resources Corp – slide 38
    Returning to Existing Pads SW Dry 100,000 Drilled Wells - 2015 10,000 Wellhead Gas (MCFD) Additional 3 wells 1,000 Future 100 Locations 10 Drilled Wells - 2014 1 Mar-14 Sep-14 Apr-15 Oct-15 May-16 Wellhead…
  39. January 2017 Investor Presentation – Range Resources Corp – slide 39
    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…
  40. January 2017 Investor Presentation – Range Resources Corp – slide 40
    Gas in Place (GIP) Utica/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…
  41. January 2017 Investor Presentation – Range Resources Corp – slide 41
    Gas in Place (GIP) Upper Devonian 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+ acres…
  42. January 2017 Investor Presentation – Range Resources Corp – slide 42
    Utica Wells Wellhead Pressure vs. Cumulative Production 30 Mmcfd 10,000 25 Mmcfd 13,200 ft. TVD* 20 Mmcfd 8,000 13,400 ft. TVD* Wellhead Pressure (psi) 18 Mmcfd 11,850 ft. TVD* 6,000 12 Mmcfd 9,206 ft. TVD* 4,000…
  43. January 2017 Investor Presentation – Range Resources Corp – slide 43
    Utica/Point Pleasant Continued improvement in well performance for the 1st, 2nd and 3rd wells due to higher sand concentration and improved targeting Ranges third well fully online in 3Q16 appears to be one of the best dry gas…
  44. January 2017 Investor Presentation – Range Resources Corp – slide 44
    Announced Appalachian Basin Takeaway Projects 1 of 2 Capacity Fully Approved or Northeast PA Operator Main Line Market Start-up* Bcf/d Committed with FERC 2015 Niagara Expansion Kinder Morgan TGP Canada Q4'15 0.2 Y Y Northern Access…
  45. January 2017 Investor Presentation – Range Resources Corp – slide 45
    Announced Appalachian Basin Takeaway Projects 2 of 2 Capacity Fully Approved or Southwest Operator Main Line Market Start-up* Bcf/d Committed with FERC Midwest/Canada/ Rover Ph1 ETP Q2'17 1.9 Y Y 2017 Gulf Coast Rayne/Leach Xpress…
  46. January 2017 Investor Presentation – Range Resources Corp – slide 46
    Financial Detail
  47. January 2017 Investor Presentation – Range Resources Corp – slide 47
    Range Bonds Continue to Trade Well 14.0% 12.0% 10.0% 8.0% Yield to Worst 6.0% 4.0% 2.0% 0.0% 12/1/ 2015 1/1/2016 2/1/2016 3/1/2016 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/ 2016…
  48. January 2017 Investor Presentation – Range Resources Corp – slide 48
    Natural Gas and Oil Hedging Status Volumes Average Floor Average Hedged Price Ceiling Price Time Period (Mmbtu/day) (/Mmbtu) (/Mmbtu) or bbl/day or /bbl or /bbl 4Q 2016 Swaps 901,739 3.32 3.32 Gas Swaps 2017 Swaps 610,691 3.18…
  49. January 2017 Investor Presentation – Range Resources Corp – slide 49
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged Price Time Period (bbls/day) (/gal) 4Q 2016 Swaps 5,839 0.46 Ethane (C2) 2017 Swaps 3,000 0.27 4Q 2016 Swaps 11,142 0.75 Propane (C3) 2017 Swaps 5,500 0.53 Normal…
  50. January 2017 Investor Presentation – Range Resources Corp – slide 50
    Macro Section
  51. January 2017 Investor Presentation – Range Resources Corp – slide 51
    Significant Natural Gas Demand Growth Projected Beginning in 2016 LONG-TERM US NATURAL GAS DEMAND ROADMAP (BCF/D) Cumulative 2016 2017 2018 2019 2020 2016-2020 LNG Exports Sabine Pass 1.2 1.2 0.7 3.1 Freeport 0.5 1.0 1.5 Cove…
  52. January 2017 Investor Presentation – Range Resources Corp – slide 52
    U.S. LNG Exports Expected to be 8 Bcf/day by 2020 per TPH Research report dated 10/08/2015 53
  53. January 2017 Investor Presentation – Range Resources Corp – slide 53
    U.S. Natural Gas Exports to Mexico Expected to Increase Source: Raymond James Energy Research Report Dated 12/19/2016 54
  54. January 2017 Investor Presentation – Range Resources Corp – slide 54
    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…
  55. January 2017 Investor Presentation – Range Resources Corp – slide 55
    Year over Year % Growth -5.0% 10.0% 15.0% 20.0% -10.0% 0.0% 5.0% Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Source: Jefferies as of August 2016 Aug-13 Sep-13 Oct-13 Nov-13 Associated Gas…
  56. January 2017 Investor Presentation – Range Resources Corp – slide 56
    Non-Appalachian Gas Basins Growth by Area 6.0% 4.0% 2.0% Year over Year % Growth 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% Source: Bentek, EIA as of October 2016 57
  57. January 2017 Investor Presentation – Range Resources Corp – slide 57
    Appalachian Pipeline Flow Data by Region (Mcf/d) 10,000,000 Production plateauing NE PA production limited by current rig 9,000,000 count in basin to maintain flat production DUC inventory declining 8,000,000 7,000,000…
  58. January 2017 Investor Presentation – Range Resources Corp – slide 58
    Total U.S. Natural Gas Production Growth by Area 12.0% 8.0% Year over Year % Growth 4.0% 0.0% -4.0% December 2015 Marked the First Y/Y Supply Decrease Since February 2010 Source: Bentek, EIA as of October…
  59. January 2017 Investor Presentation – Range Resources Corp – slide 59
    Appalachian Rig Counts Declining Utica / Point Pleasant Rig Count 60 50 40 Utica/Point Pleasant rig count 30 down 73% from the peak in 20 2014 10 0 Apr-12 Jul-12 Apr-13 Jul-13 Apr-14 Jul-14 Apr-15 Jul-15…
  60. January 2017 Investor Presentation – Range Resources Corp – slide 60
    Appalachian Production, Consumption & Takeaway 2015-2018 LNG exports starting in early 2016 Appears to have sufficient takeaway capacity by 2017 2015 2016 2017 2018 Appalachia Production Year End Exit Rate 20.6 22.0 24.0…
  61. January 2017 Investor Presentation – Range Resources Corp – slide 61
    What Does the Futures Strip Price Indicate for Regional Basis Dawn 2015 +0.30 2020 -0.01 Algonquin 2015 +2.24 MichCon Leidy 2020 +0.99 Chicago CG 2015 +0.19 2015 -1.57 2015 +0.15 2020 -0.07 2020 -0.82 Transco Z6 (NY) 2020…
  62. January 2017 Investor Presentation – Range Resources Corp – slide 62
    Contact Information Range Resources Corporation 100 Throckmorton St., Suite 1200 Fort Worth, Texas 76102 Laith Sando, Vice President Investor Relations (817) 869-4267 lsandorangeresources.com David Amend, Investor Relations…

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