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BMO Energy Forum – Range Resources Corp

Range Resources Corp · Jan 13, 2015 · 66 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. BMO Energy Forum – Range Resources Corp – slide 1
    Range Resources Corporation Company Presentation January 13, 2015 1
  2. BMO Energy Forum – Range Resources Corp – slide 2
    Range is a Simple Story 1. Owns largest acreage position in core of Marcellus with additional stacked pay horizons 2. Wells, gathering, processing and markets planned or contracted to grow to 3 Bcfe per day and beyond 3. 20% to 25%…
  3. BMO Energy Forum – Range Resources Corp – slide 3
    Near-term Catalysts 1. Unit costs expected to continue to decline 2. Utica well test to potentially add another growth opportunity IP at 59 Mmcf/d - Best in Appalachian Basin 3. Continuing significant reserve growth 4. Uplift in cash…
  4. BMO Energy Forum – Range Resources Corp – slide 4
    Range Resources Strategy Marcellus Shale 1 million net acres 41 to 51 Tcfe resource potential Proven track record of performance Upper Devonian Shale 12 to 18 Tcfe resource potential Utica/Point Pleasant Shale Focus on PER SHARE…
  5. BMO Energy Forum – Range Resources Corp – slide 5
    Natural Gas Demand Growth Forecasts Mid-point of natural gas demand growth of 21.3 Bcf/d by 2020 HISTORIC SELL-SIDE ESTIMATES OF GROWTH 2020 vs 2014 2020 vs 2014 2020 vs 2014 Actual Actual Growth Growth Growth Bcf/d 2008 2014 Low…
  6. BMO Energy Forum – Range Resources Corp – slide 6
    Significant Natural Gas Demand Growth Beginning in 2015 LONG TERM US NATURAL GAS DEMAND ROADMAP (BCF/D) Cumulative 2015 2016 2017 2018 2019 2020 2015-2020 LNG Exports Sabine Pass 1.2 1.2 0.6 3.0 Freeport 0.5 1.0 0.4 1.9 Cove Point…
  7. BMO Energy Forum – Range Resources Corp – slide 7
    2015 Capital Budget 14% less than 2014 Budget = 1.3 Billion Capital Efficiencies Allow Continued Growth with Less Capital 82% Completed lateral lengths in Marcellus expected to increase 4% to 6,200 ft. in 2015, a 36% 14%…
  8. BMO Energy Forum – Range Resources Corp – slide 8
    20% - 25% Growth Trajectory 3,000 Growth trajectory to 3 Bcfe net per day: Corporate production at 25% Wells identified growth rate 2,500 Compression and processing plants scheduled Required takeaway capacity contracted 2,000…
  9. BMO Energy Forum – Range Resources Corp – slide 9
    Range is Focused on Per Share Growth, on a Debt-Adjusted Basis Production/share debt adjusted Reserves/share debt adjusted 2.0 50 45 1.8 Mcfe/share 40 Mcfe/share 1.6 35 1.4 30 1.2 25 1.0 20 0.8 15 0.6 10…
  10. BMO Energy Forum – Range Resources Corp – slide 10
    Unit Costs Are a Key Focus 4.50 4.00 3.50 3.00 /mcfe 2.50 2.00 1.50 1.00 0.50 0.00 - 2008 2009 2010 2011 2012 2013 2014E Reserve 1.64 1.25 0.83 0.68 0.68 0.66 0.63 Replacement(1) LOE (2) 0.99 0.82 0.72 0.60…
  11. BMO Energy Forum – Range Resources Corp – slide 11
    Financial Position Strong, Simple Balance Sheet Bank debt, subordinated notes and common stock No debt maturity until 2019 (bank) and 2020 (notes) Available liquidity of 1.2 billion under commitment amount Well Structured Bank Credit…
  12. BMO Energy Forum – Range Resources Corp – slide 12
    Moved 6.4 Tcfe of Resource Potential into Proved Reserves in the Last Four Years Tcfe YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 Proved 3.1 4.4(1) 5.1 6.5 8.2 Reserves Resource 24 - 32 35 - 52 44 - 60 48 68(3) 65 86(4)…
  13. BMO Energy Forum – Range Resources Corp – slide 13
    1 Million Net Acres Prospective for Shales in PA Northwest 305,000 net acres(1) (Legacy acreage is largely held by shallow production) Northeast 120,000 net acres (One rig is projected to hold all blocked up acreage being…
  14. BMO Energy Forum – Range Resources Corp – slide 14
    Range Acreage Top Tier 15 15
  15. BMO Energy Forum – Range Resources Corp – slide 15
    Pennsylvania Stacked Pays Net Acreage Wet Dry Total Acreage Acreage Acreage Upper Devonian 330,000 230,000 560,000 Marcellus 470,000 320,000 790,000 Utica/Point Pleasant 175,000 400,000 575,000 975,000 950,000…
  16. BMO Energy Forum – Range Resources Corp – slide 16
    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…
  17. BMO Energy Forum – Range Resources Corp – slide 17
    Gas In Place (GIP) Point Pleasant Outlined portion represents the area of the highest pressure gradients in the Point Pleasant Note: Townships where Range holds 3,000 or more acres (as of 12/31/2013), and estimated as…
  18. BMO Energy Forum – Range Resources Corp – slide 18
    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…
  19. BMO Energy Forum – Range Resources Corp – slide 19
    Additional Upside Utica/Point Pleasant Drilled Well Planned Well Record 24 hour IP of 59.0 Mmcf/d at Claysville Sportsmans Club 2 wells planned in 2015 Horizontal lateral of RRC Claysville Sportsmans 5,420 ft. completed with…
  20. BMO Energy Forum – Range Resources Corp – slide 20
    Southwest PA Ranges 530,000 Net Acres Approximately 2,900 industry wells (2,300 horizontal & 600 vertical) have defined the productive boundaries of the Marcellus Ranges acreage is highly prospective for Marcellus, with low…
  21. BMO Energy Forum – Range Resources Corp – slide 21
    Appalachia Gas Transportation Arrangements Projected YE 2014 Projected YE 2016 Projected YE 2018 Transport Transport Transport Mmbtu/day Mmbtu/day Mmbtu/day Regional Direction Cost per Cost per Cost per (Gross) (Gross) (Gross)…
  22. BMO Energy Forum – Range Resources Corp – slide 22
    Natural Gas Transportation Arrangements 2,500,000 Ranges Firm Transportation Strategy: Add firm transport to good markets at a reasonable cost Time transportation commitments with expected production Firm Sales/Released Utilize firm…
  23. BMO Energy Forum – Range Resources Corp – slide 23
    2014 Diversified Portfolio by Major Indices 3Q 2014 Corporate Differential Estimated Appalachia Gas Sales Portfolio By to NYMEX: (0.49) Major Indices - 2014 Southeast Calculated 4Q 2014 and 1Q 2015 Corporate Differential to NYMEX:…
  24. BMO Energy Forum – Range Resources Corp – slide 24
    2018 Diversified Portfolio by Major Indices Estimated Appalachia Gas Sales Portfolio By Major Indices - 2018 70% of Ranges gas volumes Southeast are expected to be priced off of indices outside of Appalachia by 2018 Northeast…
  25. BMO Energy Forum – Range Resources Corp – slide 25
    Innovative Gas and NGL Marketing 2016 Firm transportation volumes shown above exclude 380,000 Mmbtu/d of firm sales/released capacity 26 26
  26. BMO Energy Forum – Range Resources Corp – slide 26
    Range NGLs- Now a Global Market As the largest producer of NGLs in Appalachia, Range will continue to see high interest from international customers Shipments of ethane from Marcus Hook to Norway begin in second half of 2015.…
  27. BMO Energy Forum – Range Resources Corp – slide 27
    Southern Appalachian Division 475,000 net acres- Range owns minerals on most of the acreage Recent completion technology advances result in substantially higher returns for CBM and tight gas wells Recent CBM results are 100%…
  28. BMO Energy Forum – Range Resources Corp – slide 28
    Nora Area Strategic Marketing Advantages Nora is strategically Nora positioned to provide gas to southeast markets 3.0 Bcf/d of new demand in VA, NC, SC, TN, GA, AL with 1 Bcf/d of new demand in Virginia alone Contracts in…
  29. BMO Energy Forum – Range Resources Corp – slide 29
    Midcontinent Division Highlights 360,000 net acres Currently drilling Mississippian Chat and St. Louis Results are encouraging, as the last two quarters had the two highest average 24-hour IP rates achieved to date. 3rd Quarter…
  30. BMO Energy Forum – Range Resources Corp – slide 30
    Environment, Health and Safety - A Core Value at Range 1. Environmental, Health and Safety issues can affect many aspects of our business. Range feels a deep responsibility to protect our employees, contractors, the public and the…
  31. BMO Energy Forum – Range Resources Corp – slide 31
    Range Significant Growth Potential for Many Years 1. Projected 20%-25% growth for many years 2. Wells identified, infrastructure planned with the contracted takeaway capacity to profitability grow production to 3 Bcfe/d 3.…
  32. BMO Energy Forum – Range Resources Corp – slide 32
    Shale Wells Drilled and Permitted LegendLegend RANGE ANADARKO Super-Rich Area CHEVRON/CHIEF SW CABOT CHESAPEAKE CHIEF CONSOL ECA EOG Wet Area EQT EXCO REX SHELL TALISMAN ULTRA XTO/EXXON/PHILLIPS OTHERS LARGER DOTS…
  33. BMO Energy Forum – Range Resources Corp – slide 33
    Southwest PA Super-Rich Marcellus Acreage provides the opportunity for condensate growth Super-Rich 110,000 acres In Q1 2014, Range drilled our highest rate Marcellus well to date - 24 hr IP of 6,357 boe/d (38.1 Mmcfe/d) with 65%…
  34. BMO Energy Forum – Range Resources Corp – slide 34
    Southwest PA Super-Rich Marcellus Currently estimating average lateral length across SW PA to be over 6,200 feet in 2015 Average Number of Stages 6,000 35 5,500 30 5,000 25 Feet 4,500 Stages 4,000 20 3,500 15 3,000…
  35. BMO Energy Forum – Range Resources Corp – slide 35
    Southwest PA Super-Rich Marcellus Well Projection 10,000 EUR 1,172 Mbbls & 5.3 BCF (2.05 Mmboe) 5,300 foot lateral length 26 frac stages 1,000 Mcf/d 100 Estimated Cumulative Recoveries Condensate Residue NGL w/ Ethane…
  36. BMO Energy Forum – Range Resources Corp – slide 36
    Southwest PA Wet Marcellus Super-Rich Over 200 Range wells placed 110,000 acres Wet Gas on production in wet gas area over the last four years with 220,000 acres varying lateral lengths and frac stages Planned 2014 activity in…
  37. BMO Energy Forum – Range Resources Corp – slide 37
    Southwest PA Wet Marcellus Currently estimating average lateral length across SW PA to be over 6,200 feet in 2015 Horizontal Length Average Number of Stages 5,000 30 4,500 25 4,000 Feet 20 Stages 3,500 15 3,000…
  38. BMO Energy Forum – Range Resources Corp – slide 38
    Southwest PA Wet Marcellus Well Projection 10,000 EUR 978 Mbbls & 6.4 BCF (12.3 Bcfe) 4,200 foot lateral length 21 frac stages Mcf/d 1,000 100 Estimated Cumulative Recoveries Bbls/d Condensate Residue NGL w/ Ethane…
  39. BMO Energy Forum – Range Resources Corp – slide 39
    Southwest PA Industry Activity in Dry Gas Acreage 56% of horizontal dry gas Marcellus wells drilled by industry in SW PA have projected recoveries from 5 to over 20 Bcf per well Ranges SW Pennsylvania dry gas acreage is…
  40. BMO Energy Forum – Range Resources Corp – slide 40
    Southwest PA Dry Marcellus Currently estimating average lateral length across SW PA to be over 6,200 feet in 2015 Horizontal Length Average Number of Stages 6,000 35 5,500 30 5,000 25 4,500 Stages Feet 4,000 20 3,500…
  41. BMO Energy Forum – Range Resources Corp – slide 41
    Southwest PA Dry Marcellus Well Projection 100,000 EUR 13.4 BCF 5,200 foot lateral length 26 frac stages 10,000 1,000 Mcf/d Estimated Cumulative Recoveries 100 Residue (Mmcf) 1 Year 2,951 2 Years 4,218 3 Years…
  42. BMO Energy Forum – Range Resources Corp – slide 42
    Marcellus Wet Gas Provides Significant Price Uplift /Wellhead Mcf 8.00 7.70- 7.80 7.40 7.00 1.95 2.97 - NGLs 3.07 NGLs 6.00 (C3+) (C2+) 5.00 1.53 Condensate 4.16 4.00 1.53 Condensate 3.00 4.16 Gas Gas 2.00 3.92 Gas…
  43. BMO Energy Forum – Range Resources Corp – slide 43
    Extracting Ethane Improves Ranges Cash Flow Range Resources SW Marcellus Third Quarter 2014 3Q Pro-forma 3Q Actual 3Q Pro-forma Transportation and 3Q 2014 assuming full processing costs ethane recovery and 3Q 2014 assuming no shown…
  44. BMO Energy Forum – Range Resources Corp – slide 44
    Marcellus NGL Pricing Weighted Avg. Composite Barrel (1) Realized Marcellus NGL Prices 2013 2014 3Q 4Q 1Q 2Q 3Q 8% NYMEX WTI 105.87 97.48 98.61 102.97 96.99 (per bbl) 8% Mont Belvieu 52.63 47.78 37.22 33.43 31.81 4% Weighted…
  45. BMO Energy Forum – Range Resources Corp – slide 45
    Processing Capacity Development Source: MarkWest Energy Partners, November 2014 47
  46. BMO Energy Forum – Range Resources Corp – slide 46
    Current Capability of Ranges Marcellus Area Processing Plant 1.4 Bcf/d gas 1.8 Bcf/d of wet inlet gas 55,000 bbls/d ethane Inlet gas needed to produce 140,000 bbls/d 55,000 bbls ethane per day, assuming minimum extraction…
  47. BMO Energy Forum – Range Resources Corp – slide 47
    Range Acreage Strategically Located Near Highest GIP & Infrastructure Note: Townships where Range holds 3,000 or more acres (as of 12/31/2013), and estimated as prospective, are shown green. GIP Range estimates. 49
  48. BMO Energy Forum – Range Resources Corp – slide 48
    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 3,000…
  49. BMO Energy Forum – Range Resources Corp – slide 49
    Additional Upside Upper Devonian 560,000 Net Acres Prospective for Upper Devonian Hydrocarbon in place and Super-Rich Wet Gas thermal maturity of SW PA 110,000 acres 220,000 acres Upper Devonian similar to Marcellus Able to…
  50. BMO Energy Forum – Range Resources Corp – slide 50
    Northeast PA Currently estimating average lateral length across NE PA to be 6,000 feet in 2015 Horizontal Length Average Number of Stages 6,000 30 5,500 25 5,000 20 4,500 Stages Feet 4,000 15 3,500 10 3,000 5 2,500…
  51. BMO Energy Forum – Range Resources Corp – slide 51
    Northeast PA Well Projection 100,000 EUR 2.7 Bcf / 1,000 ft. 4,800 foot lateral length 24 frac stages 10,000 1,000 Mcf/d Estimated Cumulative Recoveries 100 Residue (Mmcf) 1 Year 3,152 2 Years 4,440 3 Years 5,302…
  52. BMO Energy Forum – Range Resources Corp – slide 52
    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 2014 Northeast Connector Williams Transco NE Q4'14 0.1 Y Y Iroquois Access…
  53. BMO Energy Forum – Range Resources Corp – slide 53
    Announced Appalachian Basin Takeaway Projects 2 of 2 Capacity Approved or Southwest Operator Main Line Market Start-up Bcf/d Fully Committed with FERC 2016 Gulf Expansion Ph1 Spectra TETCO Gulf Coast Q4'16 0.3 Y N Clarington West…
  54. BMO Energy Forum – Range Resources Corp – slide 54
    Planned and proposed pipeline projects through 2018 Moving gas out of the basin should balance supply & demand North & Northeast Williams Constitution Pipeline Estimated incremental capacity: +25.2 Bcfd Spectra Algonquin Expansion…
  55. BMO Energy Forum – Range Resources Corp – slide 55
    Peer Group Transport Capacity Comparison Average Capacity (1) Gross Production (2) (Mmbtu) NRI BTU (Mmbtu) Calculated Utilization 2015 2016 2017 2015 2016 2017 2015 2016 2017 Calculated Utilization Labels RRC (3) 1,200 1,520 1,820…
  56. BMO Energy Forum – Range Resources Corp – slide 56
    Effective Cost of Transport Assuming No Released Capacity Calculated Transport Cost (2) per Transport Cost (2) per Calculated Per Mcf Trans. Utilization (1) Mmbtu BTU Mcf Cost w/ Utilization % (3) 2015 2016 2017 2015 2016 2017 2015…
  57. BMO Energy Forum – Range Resources Corp – slide 57
    LNG Exports Developing Projects To-Date Based on operator announced dates Our analysis suggests at least 8 of the 38 proposed export facilities are likely to proceed by 2022, representing 12 Bcf/d of capacity out of the proposed…
  58. BMO Energy Forum – Range Resources Corp – slide 58
    Point Pleasant Porosity Cross Section RRC Well 60
  59. BMO Energy Forum – Range Resources Corp – slide 59
    Resource Potential is 8 to 10 Times Proved Reserves Net Unproven Gas Liquids Resource Area Resource (Tcf) (Mmbbls) Potential (Tcfe) Marcellus Shale 27 35 2,250 2,740 41 51 Upper Devonian Shale 8 12 600 940 12 18 Midcontinent 34…
  60. BMO Energy Forum – Range Resources Corp – slide 60
    Strong, Simple Balance Sheet 1st 2nd 3rd YE YE YE YE Quarter Quarter Quarter 2010 2011 2012 2013 2014 2014 2014 ( in millions) Bank borrowings 274 187 739 500 594 480 649 Sr. Sub. Notes 1,686 1,788 2,139 2,641 2,641 2,350…
  61. BMO Energy Forum – Range Resources Corp – slide 61
    Debt Maturities Range maintains an orderly debt maturity ladder 800 750 700 649 600 600 500 500 ( Millions ) 500 Credit Facility 3Q14 400 300 200 100 0 Senior Secured Revolving Credit Facility (as of…
  62. BMO Energy Forum – Range Resources Corp – slide 62
    Ranges Outstanding Bonds Corporate Rating: Ba1 (Positive) / BB+ (Stable) Senior Subordinated Notes Amount Current YTW 6.75% due 2020 500 5.02% 5.75% due 2021 500 4.92% 5.00% due 2022 600 5.00% 5.00% due 2023 750 5.00% Total…
  63. BMO Energy Forum – Range Resources Corp – slide 63
    Resilient Credit Metrics Driven by Low Cost Growth Debt / EBITDAX Debt / Total Proved (/mcfe) 4.5x 1.00 Covenant 4.0x 0.80 3.5x BB / Ba Peer Average for 2013 3.0x 0.60 2.5x 0.40 2.0x 0.20 1.5x 1.0x - 2008 2009 2010 2011 2012 2013…
  64. BMO Energy Forum – Range Resources Corp – slide 64
    Gas and Oil Hedging Status Volumes Hedged Average Floor Price Average Cap Price Period ( / Mmbtu) (Mmbtu/day) ( / Mmbtu) 4Q 2014 Swaps 260,000 4.18 Gas Hedging 4Q 2014 Collars 447,500 3.84 4.48 2015 Swaps 412,390 4.15 2015…
  65. BMO Energy Forum – Range Resources Corp – slide 65
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged (1) Period (bbls/day) Price (/gal) 4Q 2014 Swaps 12,000 1.018 Propane (C3) 2015 Swaps 1,745 1.042 Normal Butane 4Q 2014 Swaps 4,000 1.344 (NC4) Natural…
  66. BMO Energy Forum – Range Resources Corp – slide 66
    Growth at Low Cost Top quartile growth at top quartile cost 3 Year 5 Year 2009 2010 2011 2012 2013 Average Average Reserve growth 18% 42% 14% 29% 26% 23%(3) 25%(3) Drill bit replacement (1) 540% 840% 850% 773% 612% 725% 718%…

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