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Q3 2017 Presentation – Range Resources Corp

Range Resources Corp · Oct 24, 2017 · 72 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. Q3 2017 Presentation – Range Resources Corp – slide 1
    October 24, 2017 3Q17 Earnings
  2. Q3 2017 Presentation – Range Resources Corp – slide 2
    Updates for 3Q17 Earnings Presentation Slide 9 2017 high quality pads covering Southwest Marcellus acreage Slide 12 North Louisiana acquisition lookback Slide 16 Differential improvements driving margin expansion Slide 18 Margin…
  3. Q3 2017 Presentation – Range Resources Corp – slide 3
    Range Overview Market Snapshot NYSE Symbol: RRC Market Cap (a): 4.7B Net Debt (b): 4.0B Enterprise Value: 8.7B Overview Net Surface Acreage (d) 3Q17 Production Per Day of 1.99 Bcfepd SW Marcellus (PA): 515,000 2017…
  4. Q3 2017 Presentation – Range Resources Corp – slide 4
    Range Strategy Returns Focused Growth of Reserves and Production on a Per Share Debt Adjusted Basis Expand Margins Through Cost Improvements, Capital Efficiencies and Improved Realizations Target a Strong and Flexible…
  5. Q3 2017 Presentation – Range Resources Corp – slide 5
    Investment Summary High Quality Large, core acreage positions in the Marcellus and North Louisiana Acreage Position Low-risk projects with competitive returns at current prices Improving differentials across all commodities…
  6. Q3 2017 Presentation – Range Resources Corp – slide 6
    High Quality Acreage Position - Appalachia Assets 1.5 million net effective acres (a) in SW PA leads to decades of drilling inventory Gas In Place (GIP) analysis shows the greatest potential is in Southwest Pennsylvania Recent…
  7. Q3 2017 Presentation – Range Resources Corp – slide 7
    High Quality Acreage Position Southwest Appalachia PA Longer laterals and existing pads in 2017 provide low-risk efficiency gains OH Increased optionality due to quality of Note: Outline of acreage is greater Pittsburgh area…
  8. Q3 2017 Presentation – Range Resources Corp – slide 8
    2017 High Quality Pads Covering Southwest Marcellus Acreage 1) 4 wells, avg 29.5 Mmcfe/d IP from 9,247 lateral ft 2) 4 wells, avg 41.7 Mmcfe/d IP from 9,478 lateral ft 3) 6 wells, avg 31.7 Mmcfe/d IP from 11,234 lateral ft 4)…
  9. Q3 2017 Presentation – Range Resources Corp – slide 9
    High Quality Acreage Position North Louisiana 220,000(a) net acres of stacked pay potential in North Louisiana Acreage favorably located near growing Gulf Coast demand center with ample infrastructure to grow development receiving…
  10. Q3 2017 Presentation – Range Resources Corp – slide 10
    High Quality Acreage Position North Louisiana Recent well results support that the Lower Cotton Valley (LCV) gets thicker and higher pressured as you move south from the Terryville field Recent results also support gas in place of…
  11. Q3 2017 Presentation – Range Resources Corp – slide 11
    North Louisiana Acquisition Lookback Acquisition Status Case Initial expectation of 8.7 million cost to drill and Well Costs complete has been lowered even further to 7.4 million Early results from Range-drilled Upper Red wells are…
  12. Q3 2017 Presentation – Range Resources Corp – slide 12
    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…
  13. Q3 2017 Presentation – Range Resources Corp – slide 13
    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 2,000,000 Appalachia/Local…
  14. Q3 2017 Presentation – Range Resources Corp – slide 14
    Innovative NGL Marketing Agreements Enhance Pricing Mariner East ethane sent to INEOS for export to Europe Mariner East propane can be sold internationally or into premium NE winter markets Mariner West ethane sent to Nova Chemical…
  15. Q3 2017 Presentation – Range Resources Corp – slide 15
    Differential Improvements Driving Margin Expansion Natural Gas Differential (a) NGL as a % of WTI (b) Condensate Differential - 34% - (0.10) (0.15) (5.00)- (5.00)- (3.00) (6.00) (6.00) 30% 30%- (0.20) 32% (0.30) 32% (6.00) (0.30)…
  16. Q3 2017 Presentation – Range Resources Corp – slide 16
    Cost Improvements Remain a Focus Driving Down Operating Costs Corporate margins improving as cash costs have declined substantially since 2011 0.30 37% Lower debt per mcfe of production from growth 0.25 Decline at or near cash…
  17. Q3 2017 Presentation – Range Resources Corp – slide 17
    Margin Expansion Drives Strong Unhedged Recycle Ratio Unhedged Cash Margin Expanding Margins have improved due to low unit costs 50% and better pricing differentials 45% 40% Unhedged recycle ratio of 2.6x allows for 35% natural…
  18. Q3 2017 Presentation – Range Resources Corp – slide 18
    Ranges Recycle Ratio Near Head of Class 5.00x EBITDA 2017E Recycle Ratio (Median F&D) 4.50x 4.00x 3.50x 3.00x 2.50x 2.00x 1.50x 1.00x 0.50x 0.00x HES DVN APA CXO APC ECR AR EPE WLL PXD…
  19. Q3 2017 Presentation – Range Resources Corp – slide 19
    Existing Marcellus Pads Improve Capital Efficiency Over 200 Expansive inventory of over 200 pads in Existing Appalachia Pads 1/3 of 2017 Marcellus activity on existing pads 124 pads with 5 or fewer wells, 59 pads with 6-9 wells…
  20. Q3 2017 Presentation – Range Resources Corp – slide 20
    Well-structured, Resilient Balance Sheet 4 billion credit facility unanimously reaffirmed from a 29 member bank group (3B borrowing base, 2B Capital Structure(a) committed) (millio ns) 2Q17 3Q17 Liquidity of 630 million at the end of…
  21. Q3 2017 Presentation – Range Resources Corp – slide 21
    Long-Term Value Creation High-quality, large-scale acreage position containing repeatable projects with competitive rates of return Low cost structure with ability to continue driving costs lower Margin improvements expected to…
  22. Q3 2017 Presentation – Range Resources Corp – slide 22
    Appendix
  23. Q3 2017 Presentation – Range Resources Corp – slide 23
    2017 Capital Budget 2017 Capital Budget of 1.15B 2017 Capital Budget by Area Seismic, 2% Pipelines, Facilities Other, 1% and Other, 2% Leasehold, 4% North Louisiana, 34% Marcellus, 65% D&C, 93% Marcellus activity…
  24. Q3 2017 Presentation – Range Resources Corp – slide 24
    Early, Continuous Action Taken to Prepare for Low Prices Called high cost 8% notes, reducing annual interest expense by 24 million or 0.06mcfe June Redemption funded by an equal sized equity offering aimed at accelerating balance sheet…
  25. Q3 2017 Presentation – Range Resources Corp – slide 25
    Durable, HighQuality Asset Base Break-Even Costs in Appalachia and Terryville Demonstrate the Quality of Ranges Asset Base 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Source: Bernstein Full-cycle Economics…
  26. Q3 2017 Presentation – Range Resources Corp – slide 26
    Deep Core Inventory in Appalachia Ranges inventory of high-return locations Ranges Estimated Inventory Count provides for years of efficient growth 5,000 4,700 Range has 4,700 identified locations in the 4,500 4,000 core of the…
  27. Q3 2017 Presentation – Range Resources Corp – slide 27
    Cost & Efficiency Improvements SW Pennsylvania Average Lateral Length Well Cost/Lateral Length 2,500 9,000 2H17 Lateral Lengths 9,500 Ft. 8,000 2,000 7,000 6,000 1,500 5,000 4,000 1,000 3,000 2,000 500 1,000 - - 2012 2013 2014…
  28. Q3 2017 Presentation – Range Resources Corp – slide 28
    SW PA Wet Area Marcellus 2017 Well Economics (Savings From Existing Pads Not Included) Southwestern PA (Wet Gas case) 225,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.95 Bcfe Gas Price Return EUR 24.6 Bcfe Strip - 56% (67 Mbbls…
  29. Q3 2017 Presentation – Range Resources Corp – slide 29
    SW PA - Wet Area 2017 Turn in Line Forecast 3,000 2,500 Normalized McfE/Day per 1,000 ft. 2,000 1,500 1,000 500 2016 well count drops by 40% 0 0 100 200 300 400 500 600 700 800 900 1000 Days On 2016…
  30. Q3 2017 Presentation – Range Resources Corp – slide 30
    SW PA Wet Marcellus Horizontal Length (TIL) Average Number of Stages 9,000 45 Longer laterals expected in 2018 8,000 40 7,000 35 30 Stages 6,000 Feet 25 5,000 20 4,000 15 3,000 10 2,000 5 2015 2016 2017 2015 2016…
  31. Q3 2017 Presentation – Range Resources Corp – slide 31
    SW PA Super-Rich Area Marcellus 2017 Well Economics (Savings From Existing Pads Not Included) Southwestern PA (Wet Gas case) 110,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.40 Bcfe Gas Price Return EUR 20.4 Bcfe Strip - 51% (289…
  32. Q3 2017 Presentation – Range Resources Corp – slide 32
    SW PA Super-Rich Area 2017 Turn in Line Forecast 3,500 3,000 2,500 Normalized McfE/Day per 1,000 ft. 2,000 1,500 1,000 500 0 0 100 200 300 400 500 600 700 800 900 1000 Days On 2016 Actual…
  33. Q3 2017 Presentation – Range Resources Corp – slide 33
    SW PA Super-Rich Marcellus Horizontal Length (TIL) Average Number of Stages 9,000 45 Longer laterals expected in 2018 40 8,000 35 7,000 30 Stages 6,000 Feet 25 5,000 20 4,000 15 3,000 10 2,000 5 2015 2016 2017…
  34. Q3 2017 Presentation – Range Resources Corp – slide 34
    SW PA Dry Area Marcellus 2017 Well Economics (Savings From Existing Pads Not Included) Southwestern PA (Dry Gas case) 180,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.52 Bcf Gas Price Return EUR 22.3 Bcf Strip - 100+% Drill and…
  35. Q3 2017 Presentation – Range Resources Corp – slide 35
    SW PA - Dry Area 2017 Turn in Line Forecast 3,500 3,000 2,500 Normalized Mcf/Day per 1,000 ft. 2,000 1,500 1,000 500 Designed Facility Constraints 0 0 100 200 300 400 500 600 700 800 900 1000 Days On…
  36. Q3 2017 Presentation – Range Resources Corp – slide 36
    SW PA Dry Marcellus Horizontal Length (TIL) Average Number of Stages 10,000 Longer laterals expected in 2018 50 9,000 45 8,000 40 35 7,000 Stages 30 Feet 6,000 25 5,000 20 4,000 15 3,000 10 2,000 5 2015 2016…
  37. Q3 2017 Presentation – Range Resources Corp – slide 37
    Normalized Production Results of Marcellus Tighter Spacing 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 wells is…
  38. Q3 2017 Presentation – Range Resources Corp – slide 38
    Targeting/Downspacing Test Results Encouraging 3500 Optimized targeting shows a 53% increase in cumulative production 3000 after 1,000 days Normalized well costs were 850M 2500 less for optimized versus original No detrimental…
  39. Q3 2017 Presentation – Range Resources Corp – slide 39
    Return to Existing Pads Southwest Wet 100,000 Additional 5 wells Drilled Wells - 2015 10,000 Wellhead Gas (MCFD) Future Locations 1,000 100 10 Drilled Wells - 2010 1 Oct-12 Mar-13 Sep-13 Mar-14 Sep-14 Feb-15…
  40. Q3 2017 Presentation – Range Resources Corp – slide 40
    Return to Existing Pads Southwest Dry 100,000 Drilled Wells - 2015 10,000 Additional 3 wells Wellhead Gas (MCFD) 1,000 100 Future Locations 10 Drilled Wells - 2014 1 Mar-14 Aug-14 Feb-15 Aug-15 Jan-16 Jul-16…
  41. Q3 2017 Presentation – Range Resources Corp – slide 41
    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 appears to be one of the best dry gas Utica wells in the…
  42. Q3 2017 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. Q3 2017 Presentation – Range Resources Corp – slide 43
    North Louisiana Upper Red 2017 Well Economics North Louisiana Upper Red 220,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.30 Bcfe Gas Price Return EUR 17.5 Bcfe Strip - 100+% (149 Mbbls condensate, 552 Mbbls NGLs & 13.3 Bcf gas)…
  44. Q3 2017 Presentation – Range Resources Corp – slide 44
    Upper Red - Average Production by Year Time Zero 4500 4000 3500 3000 MCFED / 1,000' LL 2500 2000 1500 1000 500 0 1 51 101 151 201 251 301 351 Days RRC Terryville Upper Red TC Upper Red 2015-2016 Actual…
  45. Q3 2017 Presentation – Range Resources Corp – slide 45
    Terryville Upper Red Well Production History (Oil/Wellhead Gas Only) 1000 900 800 700 600 MMCFE/1000' 500 400 300 200 100 0 0 5 10 15 20 25 Months Monthly Well Production RRC Type Curve Unadjusted…
  46. Q3 2017 Presentation – Range Resources Corp – slide 46
    North Louisiana Lower Red 2017 Well Economics North Louisiana Lower Red 220,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 1.58 Bcfe Gas Price Return EUR 11.8 Bcfe Strip - 45% (119 Mbbls condensate, 378 Mbbls NGLs & 8.9 Bcf gas) Drill…
  47. Q3 2017 Presentation – Range Resources Corp – slide 47
    Lower Red Average Production by Year Time Zero 4000 3500 3000 2500 MCFED / 1,000' LL 2000 1500 1000 500 0 1 51 101 151 201 251 301 351 401 451 501 551 601 651 701 Days RRC Terryville Lower Red 2017…
  48. Q3 2017 Presentation – Range Resources Corp – slide 48
    Terryville Lower Red Well Production History (Oil/Wellhead Gas Only) 1000 900 800 700 600 MMCFE/1000' 500 400 300 200 100 0 0 5 10 15 20 25 Months Monthly Well Production RRC Type Curve Unadjusted Avg…
  49. Q3 2017 Presentation – Range Resources Corp – slide 49
    2016 Reserves and Resource Potential Summary Proved reserves of 12.1 Tcfe as of year Track Record of Reserve Growth end 2016 14 12 Proved reserves increased 11% y/y Total Proved Reserves in Tcfe excluding acquisitions and…
  50. Q3 2017 Presentation – Range Resources Corp – slide 50
    Track Record of Impressive Reserve Replacement at Low Cost 3-Year 5-Year Reserve Replacement 2012 2013 2014 2015 2016 Average (3) Average (3) All sources excluding PUD removals(1) 680% 745% 793% 436% 563% 585% 509% All sources (2)…
  51. Q3 2017 Presentation – Range Resources Corp – slide 51
    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…
  52. Q3 2017 Presentation – Range Resources Corp – slide 52
    Gas in Place (GIP) Utica/Point Pleasant Bold, outlined portion represents the area of the highest pressure gradients in the Point Pleasant Note: Outline of acreage is greater Pittsburgh area Note: Townships where Range holds…
  53. Q3 2017 Presentation – Range Resources Corp – slide 53
    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: Outline of acreage is greater Pittsburgh…
  54. Q3 2017 Presentation – Range Resources Corp – slide 54
    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…
  55. Q3 2017 Presentation – Range Resources Corp – slide 55
    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 Q3'17 1.9 Y Y 2017 Gulf Coast Rayne/Leach Xpress…
  56. Q3 2017 Presentation – Range Resources Corp – slide 56
    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…
  57. Q3 2017 Presentation – Range Resources Corp – slide 57
    Financial Detail
  58. Q3 2017 Presentation – Range Resources Corp – slide 58
    Range Bonds Continue to Trade Well 17.0% 15.0% 13.0% 11.0% 9.0% 7.0% 5.0% 3.0% Range Resources 4.875% 15-MAY-25 Antero Resources 5.000% 01-MAR-25 Southwestern Energy 4.950% 23-JAN-25 Continental Resources…
  59. Q3 2017 Presentation – Range Resources Corp – slide 59
    Natural Gas Hedging Status Volumes Average Floor Average Time Period Hedged Price Ceiling Price (Mmbtu/day) (/Mmbtu) (/Mmbtu) 4Q17 Swaps 867,935 3.20 3.20 1Q18 Swaps 1,020,000 3.43 3.43 Gas Swaps1 2Q-4Q18 Swaps2 790,000 3.01…
  60. Q3 2017 Presentation – Range Resources Corp – slide 60
    Liquids Hedging Status Volumes Hedged Hedged Price Time Period (bbls/day) (/gal) 4Q17 Swaps 3,000 0.27 Ethane (C2) 1H18 Swaps 250 0.29 4Q17 Swaps 17,576 0.60 Propane (C3)1 1Q18 Swaps 12,000 0.65 2Q-4Q 2018 Swaps 7,932 0.61…
  61. Q3 2017 Presentation – Range Resources Corp – slide 61
    Macro Section
  62. Q3 2017 Presentation – Range Resources Corp – slide 62
    Significant Natural Gas Demand Growth Projected LONG-TERM US NATURAL GAS DEMAND ROADMAP (BCF/D) Cumulative 2017 2018 2019 2020 2017-2020 LNG Exports Sabine Pass 1.3 - 0.7 2.0 Freeport - - 1.5 1.5 Cove Point 0.8 - 0.8 Elba Island…
  63. Q3 2017 Presentation – Range Resources Corp – slide 63
    U.S. LNG Export Terminal Capacity 20.0 18.0 Cameron T5 16.0 Magnolia LNG FERC Approved - Potential Next Wave 14.0 Projects Lake Charles T1-T3 Corpus Christi T3 12.0 Golden Pass T1-T3 Under Construction / In-Service…
  64. Q3 2017 Presentation – Range Resources Corp – slide 64
    U.S. Natural Gas Exports to Mexico Expected to Increase Source: Raymond James Energy Research Report Dated 12/19/2016 65
  65. Q3 2017 Presentation – Range Resources Corp – slide 65
    Oil Production Increasing, While Ex-Northeast gas Remains Relatively Flat 56 9,500 55 9,300 54 9,100 53 8,900 52 8,700 51 8,500 50 8,300 49 8,100 48 7,900 47 7,700 46 7,500 US Gas Pipeline Flows ex Northeast…
  66. Q3 2017 Presentation – Range Resources Corp – slide 66
    Texas Oil Production Increases, While Natural Gas Remains Relatively Flat Note: Natural gas series is marketed production Source: EIA, Federal Reserve Bank of Dallas 67
  67. Q3 2017 Presentation – Range Resources Corp – slide 67
    Appalachian Pipeline Flow Data by Region (Mcf/d) 10,000,000 NE PA production limited by infrastructure 9,000,000 DUCs depleted to normal working levels 8,000,000 7,000,000 6,000,000 Mcf/d 5,000,000 4,000,000…
  68. Q3 2017 Presentation – Range Resources Corp – slide 68
    Total U.S. Natural Gas Production Growth by Area 12.0% 10.0% 8.0% Year over Year % Growth 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% Source: Bloomberg as of October 2017 69
  69. Q3 2017 Presentation – Range Resources Corp – slide 69
    U.S. Onshore Lower 48 Wellhead Gas Production History 90 Base decline rate estimated 8 BCFD or 13% Exit to exit decline of 15 BCFD Actuals Forecasted 80 Includes associated gas production 70 60 50 BCFD 40 30 20…
  70. Q3 2017 Presentation – Range Resources Corp – slide 70
    10 20 30 40 50 60 0 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 from the 2014 peak Jan-15 Apr-15 Marcellus rig count down 51% Jul-15 Source: RigData & Baker Hughes…
  71. Q3 2017 Presentation – Range Resources Corp – slide 71
    What Does the Futures Strip Price Indicate for Regional Basis Dawn 2016 +0.11 2020 -0.15 Algonquin 2016 +0.82 MichCon Leidy 2020 +1.40 Chicago CG 2016 +0.03 2016 -1.21 2016 +0.04 2020 -0.19 2020 -0.61 Transco Z6 (NY) 2020…
  72. Q3 2017 Presentation – Range Resources Corp – slide 72
    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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