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Scotia Howard Weil Annual Energy Conference – Range Resources Corp

Range Resources Corp · Mar 25, 2019 · 41 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 Annual Energy Conference – Range Resources Corp – slide 1
    Company Presentation Company January Presentation 20182018 January Scotia Howard Weil 2019 Energy Conference
  2. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 2
    Range Overview Market Snapshot NYSE Symbol: RRC Market Cap (a): 2.7B Net Debt (b): 3.8B Enterprise Value: 6.5B Proved Reserves PV-10 at YE18 Strip (c): 9.9B Proved Developed PV-10 at YE18 Strip (c): 6.6B Recent Highlights Acreage…
  3. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 3
    Strategic Focus Sustainable Free Cash Flow Driven by High-Return Assets Disciplined spending supported by low base decline and maintenance capital Consistent emphasis on debt-adjusted per share metrics in management incentives Target…
  4. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 4
    Large Core Marcellus Inventory Large contiguous acreage position allows Range acreage outlined in green for long-lateral development 3,700 undrilled Core Marcellus wells (a) 285 wells with 40+ Bcfe EUR 385 wells with 30-40 Bcfe…
  5. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 5
    High Quality Resource Base Proved reserves valued at 9.9 billion PV-10 at YE18 strip. Equals 24/share, net of YE18 debt balance. Proved Developed 9.8 Tcfe Proved Undeveloped Included in Reserves 8.3 Tcfe Proved Developed reserves of…
  6. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 6
    Appalachia Assets Stacked Pay 1.5 million net effective acres (a) in PA leads to decades of drilling inventory Gas In Place analysis shows the greatest potential is in Southwest Pennsylvania Approximately 1,000 producing Marcellus…
  7. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 7
    Southwest Appalachia Acreage Position Note: Grey area is greater Longer laterals and existing pads in 2019 provide Pittsburgh area. Range acreage outlined in green. PA low-risk efficiency gains OH Liquids and dry optionality…
  8. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 8
    Low Base Decline Supports Low Maintenance Capital D&C Maintenance Capital(a) Significant improvement in Maintenance 700 Capital post-2018 600 2019 maintenance capital improves significantly Capital Spending ( in millions)…
  9. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 9
    Peer-Leading Maintenance Capital Profile 2019 D&C Maintenance Capex as a % of Consensus Cash Flow 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% RRC Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Range Is the Only Operator in…
  10. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 10
    Low Maintenance Capital Supports Sustainable Free Cash Flow 100% 90% FCF Yield Considerations for Cash Flow 80% 6% y/y growth above Maintenance Capital % of Operating Cash Flow 70% Free Cash Flow 60% Generating a free cash…
  11. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 11
    Capital Allocation Scenarios Five-Year Outlook Summary Base Prices Upside Prices 2.70 gas/55 WTI 2.85 gas/60 WTI Maintenance Balanced Full Balanced Capital Approach Reinvestment Approach 2019-2023 Cumulative Free Cash Flow…
  12. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 12
    Improving Cost Structure Drives Cash Flow & Margin Growth Cash Operating Costs ( per mcfe) 2.25 Cost Structure Improves 7% from 4Q18 to 4Q19 Cost Structure 2.00 Improves 0.30/mcfe from 4Q18 to 4Q23 1.75 1.50 1.25 1.00…
  13. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 13
    Differentials Have Stabilized and Improved vs Historical Levels Natural Gas Differential(a) NGL as a % of WTI(b) Condensate Differential 36% - 40% 35% (0.10) - (0.20) (4.87) (0.20) (6.00) - (8.00) 24% (12.03) (0.49) 2015-2016…
  14. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 14
    Current Enterprise Value a Discount to YE18 PV-10 YE18 PV-10 at 9.9 billion Strip Pricing(a) YE18 PV10 Enterprise Value. Excludes the value of 58 Tcfe Marcellus resource potential(c). Enterprise 6.5 billion Value(b) YE18…
  15. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 15
    Appendix
  16. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 16
    Five-Year Outlook Assumptions Assumptions: Production growth is driven by de-risked Marcellus inventory. Commodity Price Assumptions: Henry Hub: 2.90 (2019), 2.70 (2020-2023) Natural Gas Differential: (0.14) in 2019, (0.11) in…
  17. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 17
    Revenue Recognition Accounting Standard Adopted in 2018 Range adopted the new revenue recognition accounting standards in 1Q18 which changes our financial statement presentation related to revenue from certain gas processing contracts. As…
  18. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 18
    Maintenance Capital Example Starting production 1st year recoveries(a) for SW PA wells: assumed 2,260 Mmcfe/d Super Rich = 2.8 Bcfe gross (2.3 Bcfe net) Wet = 3.7 Bcfe gross (3.0 Bcfe net) Production = 85 Bcfe Dry = 4.3 Bcf gross…
  19. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 19
    Base Decline & Capital Efficiency Improving 2,400 2,200 Daily Production (Mmcfe per day) 2,000 1,800 1,600 1,400 1,200 1,000 800 Base Decline 20% Base Decline 20% 600 Moderate Growth & Multiple Years of Marcellus Base…
  20. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 20
    SW PA Super-Rich Area Marcellus 2019 Well Economics Southwestern PA (Wet Gas case) 110,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.6 Bcfe Gas Price Return EUR 26.0 Bcfe Strip - 52% (360 Mbbls condensate, 1,999 Mbbls NGLs & 11.9 Bcf…
  21. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 21
    SW PA Wet Area Marcellus 2019 Well Economics Southwestern PA (Wet Gas case) 240,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.96 Bcfe Gas Price Return EUR 29.6 Bcfe Strip - 51% (80 Mbbls condensate, 2,440 Mbbls NGLs & 14.5 Bcf gas)…
  22. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 22
    SW PA Dry Area Marcellus 2019 Well Economics Southwestern PA (Dry Gas case) 150,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.52 Bcf Gas Price Return EUR 25.2 Bcf Strip - 46% Drill and Complete Capital 6.6 MM (661 K per 1,000 ft.)…
  23. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 23
    Targeting / Downspacing Production Results 3,000 2,500 Optimized targeting shows 50% Normalized Mmcfe/Day per 1,000 ft. 2,000 increase in cumulative production after 1,300 days No detrimental production impact seen…
  24. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 24
    Return to Existing Pads Marcellus 100,000 Drilled 10,000 Wells - 2015 Additional 3 wells Wellhead Gas (MCFD) 1,000 Future Locations 100 10 Drilled Wells - 2014 1 Mar-14 Oct-14 May-15 Dec-15 Jul-16 Mar-17…
  25. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 25
    Deep Utica Range has drilled three Deep Utica wells Ranges third well appears to be one of the best dry gas Utica wells in the basin (next slide) Continued improvement in well performance due to higher sand concentration and…
  26. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 26
    Utica Wells Wellhead Pressure vs. Cumulative Production Ranges DMC Properties well one of the best in the Utica 27
  27. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 27
    Innovative NGL Marketing Agreements Enhance Pricing First-mover on Appalachian NGL exports to Europe via ethane sales to INEOS using Mariner East capacity Ranges propane has been sold internationally since 2016 through Marcus Hook,…
  28. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 28
    Consistent Track Record of Reserve Growth Proved reserves of 18.1 Tcfe as of year end 2018 YE18 proved reserves increased 18% y/y Future development costs for proved undeveloped reserves are estimated to be 0.40 per Mcfe at YE2018…
  29. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 29
    Natural Gas & NGL Macro Outlook
  30. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 30
    U.S. Natural Gas Demand Outlook: +21 Bcf/d 2019-24 2019-2021 Demand Outlook U.S. Gas Demand Growth Forecast (Bcf/d) Demand growth led by U.S LNG Projects and 14 R+C build-out of Mexican pipeline infrastructure Other 12 Industrial…
  31. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 31
    Natural Gas - 35% of the U.S. Generation Mix in 2018 Growing Market Share in Power Gen. U.S. Natural Gas Generation as a % of Gas + Coal Gas power demand grew by 11 Bcf/d from 80% 2009-2018, while coal declined 11 Bcf/d(a) and…
  32. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 32
    Supply Growth Battles Declines & Producer Capital Discipline Growing Supply Requires More than U.S. Natural Gas Base Decline Rate Offsetting Base Declines Average U.S. decline rate of 24% equates to 23 Bcf/d of new gas required to hold…
  33. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 33
    Dry Gas Basin Economics Under Pressure at Current Strip Supply Growth Needed from Dry Gas Basins EIA forecasts 6.7 Bcf/d of 2019-2024 supply growth from outside of Northeast (mostly associated gas) Demand growth forecast of +21 Bcf/d…
  34. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 34
    NGL Macro Outlook Fractionation Tightness to Return in Mont Belvieu C2 Premium to NYMEX (cents per gallon) 2019 40 NGL price rally in Summer 2018 was driven 35 by U.S. fractionation capacity tightness that 30 was temporarily relieved…
  35. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 35
    Financial Detail
  36. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 36
    Guidance 1Q 2019 Full-Year 2019 Production (Mmcfe per day) 2,225 2,325 to 2,345 Capital Expenditures 756 million Operating Expense Guidance Direct Operating Expense per mcfe 0.17 - 0.19 TGP&C Expense per mcfe 1.48 - 1.52…
  37. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 37
    Well-Structured, Resilient Balance Sheet 4 billion credit facility, Capital Structure(a) (3B borrowing base, 2B committed) (millions) 4Q18 No note maturities until 2021 Bank Debt 943 Senior Notes 2,877 Simple capital structure…
  38. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 38
    Development Cost & Recycle Ratio Calculation Cash margin per mcfe / PUD development costs per mcfe. Numerator: Pre-Hedge Realized Price (a) 3.12 per mcfe All-In Cash Costs (Mid-Point of 2019 Guidance) 2.10 per mcfe Adjusted…
  39. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 39
    Natural Gas & Oil Hedging Status Volumes Hedged Average Hedge Prices Time Period (Mmbtu/day) (/Mmbtu) 1Q19 Swaps 1,385,000 3.05 2Q19 Swaps 1,455,000 2.80 Natural Gas1 3Q19 Swaps 1,455,000 2.80 (Henry Hub) 4Q19 Swaps 1,428,478…
  40. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 40
    Liquids Hedging Status Volumes Hedged Average Hedge Prices Time Period (bbls/day) (/gal) 1Q19 Collars 7,000 0.927 x 1.029 1Q19 Swaps 8,500 0.963 Propane (C3) 2Q19 Collars 1,000 0.90 x 0.96 2Q19 Swaps 8,500 0.878 Normal…
  41. Scotia Howard Weil Annual Energy Conference – Range Resources Corp – slide 41
    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 Michael Freeman, Director Investor…

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