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COMPANY PRESENTATION – Range Resources Corp

Range Resources Corp · Aug 1, 2010 · 70 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. COMPANY PRESENTATION – Range Resources Corp – slide 1
    Company Presentation August 2010 Range Resources Corporation Company Presentation l August 2010 l 1
  2. COMPANY PRESENTATION – Range Resources Corp – slide 2
    Range Resources Overview Marcellus Shale 20 to 27 Tcfe resource potential 1) Find and develop reserves and production at top-quartile sector costs; staying focused on cost structure and rate of return Appalachia 2) Ensure that…
  3. COMPANY PRESENTATION – Range Resources Corp – slide 3
    2010 Business Plan Focus on continued development in Marcellus where rates of return are still attractive 81% of capital focused in Marcellus Continue infrastructure build out with midstream partners for 2011- 2012 growth On…
  4. COMPANY PRESENTATION – Range Resources Corp – slide 4
    Consistent Growth 7 Consecutive Years of Production Growth 640 610 580 Not less than 25% Growth 550 Target for 2011 520 490 14% Growth Target 460 for 2010 (1) 430 400 370 340 310 280 250 220 190 160 130 2003 2004 2005 2006 2007 2008…
  5. COMPANY PRESENTATION – Range Resources Corp – slide 5
    Range is Getting Bigger, But Also Getting Better Range is growing production and reserves at low cost by focusing its capital on its lower cost, higher return plays At the same time, Range is selling its more mature non-core…
  6. COMPANY PRESENTATION – Range Resources Corp – slide 6
    High-Grading the Asset Base Producing More With Less Wells Since 2007, production has increased 52%, while well count has decreased more than 50% 14,000 13,000 Production 559 12,000 509 11,000 Production Mmcfe/day 459…
  7. COMPANY PRESENTATION – Range Resources Corp – slide 7
    Lease Operating Costs are Reflecting Our Higher Quality Asset Base 1.10 1.00 0.90 /mcfe 0.80 0.70 0.60 0.50 0.40 2007 2008 2009 2010E 2011E Unit lease operating costs are decreasing due to: Selling higher cost,…
  8. COMPANY PRESENTATION – Range Resources Corp – slide 8
    Growth at Low Cost Drillbit Reserve Replacement Increasing, While F&D Significantly Decreased 600% 1.80 Drillbit Replacement 550% Drillbit Reserve Replacement, % 1.60 500% 1.40 Drillbit F&D, /mcfe 450% 1.20 400%…
  9. COMPANY PRESENTATION – Range Resources Corp – slide 9
    High Quality Asset Base + Low Cost Structure Generates Significant Free Cash Flow Growth Capex (Percentage of remaining cash flow available to grow production) (1) (1) Maintenance Capex (Percentage of cash flow necessary to keep…
  10. COMPANY PRESENTATION – Range Resources Corp – slide 10
    Ranges Reserve Base and Upside are Growing (Tcfe) YE 2005 YE 2006 YE 2007 YE 2008 YE 2009 Proved Reserves 1.4 1.8 2.2 2.7 3.1 Resource Potential (1) 3.4 - 4.6 6.7 - 9.2 16.2 - 21.9 20.5 - 28.2 24.0 31.7 Proved reserves have…
  11. COMPANY PRESENTATION – Range Resources Corp – slide 11
    Not Just Growing Production and Reserves Range is focused on PER SHARE GROWTH 1.2 25 1.0 20 0.8 15 0.6 10 0.4 5 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Production/share debt adjusted Reserves/share debt…
  12. COMPANY PRESENTATION – Range Resources Corp – slide 12
    Marcellus Shale 20 to 27 Tcfe Potential Range discovered the Marcellus Shale Completed the first commercial Marcellus Shale well in 2004 1.3 million acres prospective for Marcellus 900,000 net acres in the Fairway (Equates to…
  13. COMPANY PRESENTATION – Range Resources Corp – slide 13
    Ranges Marcellus Shale Net Production 440 Anticipate 400-420 400 Mmcfe/d Anticipate by YE 2011 360 200-210 Mmcfe/d 320 exit rate by YE2010 280 Mmcfe/d 240 200 160 120 80 Actual Projected 40 0 Dec-06 Jun-07 Dec-07…
  14. COMPANY PRESENTATION – Range Resources Corp – slide 14
    Marcellus SW Resource Potential is 14 to 19 Tcfe Southwest resource potential of 14 to 19 Tcfe is comprised of 270 to 380 million barrels of liquids and 12.4 to 16.7 Tcf of gas. Range has 600,000 net acres in SW PA Reserves per…
  15. COMPANY PRESENTATION – Range Resources Corp – slide 15
    Wet Gas Provides Excellent Economics 5.00 NYMEX Henry Hub 75.00 NYMEX WTI Wellhead Production Based on 9/09 Gas Quality(1) 1 mcf of Natural Gas Assumes Cryogenic Only Natural Gas NGLs Condensate Production by product .900 mcf…
  16. COMPANY PRESENTATION – Range Resources Corp – slide 16
    Range Marcellus Shale Fracs Bigger Jobs and Lower Costs Better Well Results Proppant, Water, Lateral Stages lbs. gallons Length, ft 2006 923,000 2,225,000 3 1,794 2007 2,765,000 2,646,000 7 2,198 2008 3,418,000 3,127,000 8…
  17. COMPANY PRESENTATION – Range Resources Corp – slide 17
    Marcellus Zero Time Plot by Well Type as of June 30, 2010 4000 3500 3000 2009/2010 Long Laterals Gross Well Head Gas MCFD 2500 2009 Short Laterals 2000 2008 Avg 1500 2007 Avg 2006 Avg 1000 500 0 1 51…
  18. COMPANY PRESENTATION – Range Resources Corp – slide 18
    Excellent Economics at Low Cost 10,000 Gross EUR Well Costs Royalty F&D Cost ROR (Bcfe) (millions) (per mcfe) (6 NYMEX) 5.0 4.0 15% 0.94 100% Gross MCFED 1,000 100 0 2 4 6 8 10 12 14 16 18 20…
  19. COMPANY PRESENTATION – Range Resources Corp – slide 19
    Marcellus Shale Well Economics Wet Gas Case Southwestern Pennsylvania (wet 130% gas case) 120% EUR 4.5 Bcfe and 5.0 Bcfe 110% 100% Capital 4.0MM 90% F&D 1.05/mcfe (4.5 Bcfe) 80% IRR (1) 70% 0.94/mcfe (5.0 Bcfe) 60% NYMEX…
  20. COMPANY PRESENTATION – Range Resources Corp – slide 20
    Current Infrastructure Facilities S.W. Pennsylvania Wet Gas Facilities Range entered into an agreement with MarkWest in 2008 Currently 155 Mmcf/d cryo capacity, additional 30 Mmcf/d to be added 3Q 2010 Additional 165 Mmcf/day…
  21. COMPANY PRESENTATION – Range Resources Corp – slide 21
    Wheres the Best Place to Drill for Natural Gas in North America Today Marcellus Economics Appear to be the Best in North America Ross Smith study dated September 4, 2009 The core of the Marcellus should offer a better rate-of-return…
  22. COMPANY PRESENTATION – Range Resources Corp – slide 22
    Ranges N.E. Pennsylvania Position Range has 300,000 net acres in the Northeastern Pennsylvania portion of the play Highest rate vertical well IP 6.3 Mmcfpd (24 hour rate) First 2 horizontal wells IP of 13.6 and 13.3 Mmcfpd (7 day…
  23. COMPANY PRESENTATION – Range Resources Corp – slide 23
    Marcellus Shale Acreage Per Share 90% in PA 33% in PA Net Acres per thousand basic shares 10.00 25% in PA 1,600 9.00 1,400 8.00 1,200 Net Acres 7.00 6.00 1,000 5.00 800 4.00 600 3.00 400 2.00 1.00 200 0.00 0 ZO…
  24. COMPANY PRESENTATION – Range Resources Corp – slide 24
    Hydraulic Fracturing Hydraulic Fracturing is a proven technology and a key to unlocking our nations growing 100-year supply of clean-burning natural gas. Fracturing fluids consist of 99.5- percent water and sand, the rest…
  25. COMPANY PRESENTATION – Range Resources Corp – slide 25
    Hydraulic Fracturing Fluid by Volume Range Resources Corporation Company Presentation l August 2010 l 25
  26. COMPANY PRESENTATION – Range Resources Corp – slide 26
    Hydraulic Fracturing Mixture Range Resources Marcellus Shale Hydraulic Fracturing Completions Listing Individual wells may vary slightly based on geologic and other conditions Overall Component Compounds Purpose Use and Dilution…
  27. COMPANY PRESENTATION – Range Resources Corp – slide 27
    Nora/Haysi Field in Virginia 350,000 acres Over 2,600 producing CBM & tight gas wells 7,000+ additional wells to drill in stacked pay areas F&D 0.88/mcfe LOE 0.60/mcfe Significant unbooked resource potential Nora Field…
  28. COMPANY PRESENTATION – Range Resources Corp – slide 28
    Nora Field Multiple Horizon Potential Depth in feet 1,100' - 2,500' CBM 4,000' - 5,000' TIGHT GAS SANDS 5,000' - 6,000' DEVONIAN SHALE EXPLORATION POTENTIAL SILURIAN / ORDOVICIAN 12,000' Range Resources…
  29. COMPANY PRESENTATION – Range Resources Corp – slide 29
    Nora Vertical Well Economics CBM Tight Gas 80% EUR - 350 Mmcf 450 Mmcf 70% Capital - 340,000 500,000 60% F&D - 0.88 0.99 50% IRR 40% 30% NYMEX Price/Rate of Return 20% CBM Tight Gas 10% 4.00 - 24% 26% 0% 4.00 5.00 6.00…
  30. COMPANY PRESENTATION – Range Resources Corp – slide 30
    Nora Field Successful Drilling Confirms Huron Shale Potential Resource potential up to 1.5 Tcfe net to Range Reserves of 1.0 Bcf for Dev. D&C of 1.2 million = F&D of 1.15/mcf 23 Drilled/Drilling Shale Wells 4 Drilled Berea Wells…
  31. COMPANY PRESENTATION – Range Resources Corp – slide 31
    Nora Area Production Growth 70,000 65,000 60,000 55,000 50,000 EQT Acquisition 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 1/1/03 7/1/03 1/1/04 7/1/04 1/1/05 7/1/05 1/1/06 7/1/06 1/1/07…
  32. COMPANY PRESENTATION – Range Resources Corp – slide 32
    Nora Nora Extension Extension Acquisition Acquisition Area Area Acreage acquired in center of giant gas accumulation Acreage developed on wide spacing Strong economics KY WVA NORA EXTENSION BUCHANAN COUNTY VA…
  33. COMPANY PRESENTATION – Range Resources Corp – slide 33
    Nora Extension Acquisition Summary 135 MM purchase price 10 Mmcfe/d net production 115,000 acres 125 Bcf proved reserves 800 Bcf upside potential Contiguous to and partially overlaps Nora acreage with similar stacked…
  34. COMPANY PRESENTATION – Range Resources Corp – slide 34
    Nora Extension Acquisition Upside Potential 800 BCF Unproved Reserves 1,300 Drilling locations Multiple drilling targets CBM, Devonian Shale, Big Lime, Berea & Weir Significant behind pipe potential Optimization of gathering…
  35. COMPANY PRESENTATION – Range Resources Corp – slide 35
    Barnett 1.3 Tcf Unbooked Potential Drilling focused in core area 1-2 rigs running for balance of year; production will grow year over year Over 900 locations to drill in the core, with minimal drilling obligations Range…
  36. COMPANY PRESENTATION – Range Resources Corp – slide 36
    Barnett Shale Well Economics Core area Tarrant, Denton, 80% Johnson and NW Ellis Counties 70% EUR 3.0 Bcf 60% 50% Capital 2.6MM IRR 40% F&D 1.14/mcfe 30% NYMEX Price/Rate of return 20% 10% 4.00 - 23% 0% 5.00 - 32%…
  37. COMPANY PRESENTATION – Range Resources Corp – slide 37
    Shale Plays in General Core vs. Non-Core Location of Acreage is Key to Shale Economics Barnett Shale Gas Play Wide distribution of well results from core vs. non- core Productivity in core is 2x- 2.5x greater than non-core…
  38. COMPANY PRESENTATION – Range Resources Corp – slide 38
    Why Invest in Range Proven Track Record of Growth 30 consecutive quarters of production growth at low cost 18% CAGR reserves and 10% CAGR production per share growth Cost structure improving High Return Projects Even in Low Price…
  39. COMPANY PRESENTATION – Range Resources Corp – slide 39
    Appendix Range Resources Corporation Company Presentation l August 2010 l 40
  40. COMPANY PRESENTATION – Range Resources Corp – slide 40
    Range is a Founding Member of ANGA ANGAs Mission Americas Natural Gas Alliance (ANGA) exists to pursue a single mission: to increase appreciation for the environmental, economic and national security benefits of clean, abundant,…
  41. COMPANY PRESENTATION – Range Resources Corp – slide 41
    Appalachian Basin Overview LAKE LAKE ONTARIO HURON Largest onshore basin in the U.S. ONTARIO NEW YORK by aerial extent IE E ER K LA Much of the basin remains unexploited PENNSYLVANIA Large untapped shale potential N.J.…
  42. COMPANY PRESENTATION – Range Resources Corp – slide 42
    Devonian Shale in Appalachia In selecting the most prospective shales, you need to consider: Thickness; total carbon content; porosity; gas in place; natural fracturing; geological complexity; depth; bottom hole pressure; thermal…
  43. COMPANY PRESENTATION – Range Resources Corp – slide 43
    Marcellus Drilling Permits Legend Wet Gas New Permitted Wells Wet Gas Area RANGE ANADARKO ATLAS CABOT CHESAPEAKE CHIEF/AB CNX EAST EOG EQT FORTUNA TURM ULTRA XTO/EXXON OTHERS Range Resources Corporation Company…
  44. COMPANY PRESENTATION – Range Resources Corp – slide 44
    Marcellus SW PA Core Area Drilling Permits Range Resources Rex Energy Atlas 10 horizontals Drilled 46 horizontal wells 4 vertical, 1 horizontal 3-10 Mmcfe/d and 75 vertical wells 2.4 Mmcfe/d (90 day) 150+ verticals Best Range Well…
  45. COMPANY PRESENTATION – Range Resources Corp – slide 45
    Marcellus NE PA Core Area Drilling Permits National Fuel Gas Fortuna EOG Resources Cabot Oil & Gas Ultra / East 3 wells averaging 10 wells producing Drilled 2 horizontals Drilled 20 verticals Resources 6.7 Mmcfe/d 30+ Mmcf/d…
  46. COMPANY PRESENTATION – Range Resources Corp – slide 46
    Additional Upside From Other Formations P FORMATION NAME A Y & DESCRIPTION RHINESTREET SHALE Mixed organic & non-organic shale Formation Area Status Rhinestreet / First well drilled MIDDLESEX SHALE Mixed organic &…
  47. COMPANY PRESENTATION – Range Resources Corp – slide 47
    Proposed Gross Capacity Additions Installed by MarkWest Liberty Processing MarkWest Liberty Processing Plants Proposed Gross Capacity Additions Capacity Committed to Range Houston, PA Majorsville, WV Third Parties Total (Mmcf/day)…
  48. COMPANY PRESENTATION – Range Resources Corp – slide 48
    Liberty Marcellus Project Schedule MarkWest Liberty is developing integrated and scalable gathering, processing, fractionation, and marketing infrastructure to support production in excess of 1 Bcf/d Gathering Facilities Houston…
  49. COMPANY PRESENTATION – Range Resources Corp – slide 49
    Strong Market for Marcellus NGLs Bbls/d Winter Propane Market vs MarkWest Production Summer Propane Summer Propane Market Market vs. vs MarkWest MarkWest Production Production Winter Propane Market vs. MarkWest Production Bbls/d…
  50. COMPANY PRESENTATION – Range Resources Corp – slide 50
    Marcellus Area Pipelines Great Take-Away Capacity; Premium Pricing Firm Transport TCO 200 Mmcf/day TETCO 120 Mmcf/day by April 2011 TETCO 150 Mmcf/day by November 2012 Columbia Gas Transmission/Columbia Gulf Marcellus Fairway…
  51. COMPANY PRESENTATION – Range Resources Corp – slide 51
    Marcellus Well Costs Based upon 3,000 foot lateral, 10 stage frac and 6 well pad Site Preparation(1) 270,000 Drilling 1,300,000 Tubulars 330,000 Facilities 250,000 Completion Operations (2) 1,850,000 4,000,000 (1) Site…
  52. COMPANY PRESENTATION – Range Resources Corp – slide 52
    Cost Cutting and Well Optimization 2007 Average initial test rate 2.4 Mmcfe/d Average Completion Costs 3.1 MM 2008 Average initial test rate 3.6 Mmcfe/d Average Completion Costs 2.6 MM 2009 Average initial test rate 5.1 Mmcfe/d…
  53. COMPANY PRESENTATION – Range Resources Corp – slide 53
    Operations Update Lower Cost Marcellus is no longer a frontier area Competition is increasing and driving down cost 2 to 3 times the number of vendors over 2008 Operations Efficiencies 24 hour completions operations enable…
  54. COMPANY PRESENTATION – Range Resources Corp – slide 54
    Custom Built Rigs (APEX Series Rigs) Designed specifically for Marcellus drilling in Appalachia Well suited for pad-site drilling State-of-the-art technology Faster mobilization / demobilization Lower cost with less environmental…
  55. COMPANY PRESENTATION – Range Resources Corp – slide 55
    How Water Usage Stacks Up 5,930 6,000 Millions of Gallons per Day At a drilling rate of double the 5,000 expected peak of 6,000 wells per year, industry water usage 4,000 still represents less than 1% of Pennsylvania daily…
  56. COMPANY PRESENTATION – Range Resources Corp – slide 56
    Low F&D / High ROR 4 Bcf for 2.4 million cost 3,100 acres 30 wells drilled 19 wells to be drilled on 500 foot spacing 48 wells to be drilled on 250 foot spacing Recent well completed approximately 3 miles south IP averaged a…
  57. COMPANY PRESENTATION – Range Resources Corp – slide 57
    Strong Financial Position Strong, Simple Balance Sheet Bank debt, subordinated notes and common stock No debt matures until 2012 for bank debt and beginning 2015 for subordinated notes Well Structured Bank Credit Facility 26…
  58. COMPANY PRESENTATION – Range Resources Corp – slide 58
    Growth at Low Cost Top quartile growth at top quartile cost 3 Year 5 Year 2005 2006 2007 2008 2009 (4) Average Average Reserve growth 20% 25% 27% 19% 18% 21% 22% Drillbit replacement (1) 235% 367% 400% 386% 540% 449% 404% All…
  59. COMPANY PRESENTATION – Range Resources Corp – slide 59
    2009 Breakeven Cost (mcfe) Bank of America - 2009 NYMEX Breakeven Analysis 18.00 16.00 14.00 Range 12.00 Resources 10.00 Median 8.10 8.00 6.00 4.00 2.00 0.00 Companies include (in alphabetical order): Atlas, Berry,…
  60. COMPANY PRESENTATION – Range Resources Corp – slide 60
    Unit Costs Are a Key Focus 5.00 /mcfe 4.00 3.00 2.00 1.00 0.00 2006 2007 2008 2009 2010E Reserve Rep (1) 1.45 1.59 1.64 1.25 1.00 LOE 0.90 0.93 1.01 0.84 0.66 Prod. taxes 0.37 0.36 0.39 0.20 0.20 G&A (2) 0.35 0.43…
  61. COMPANY PRESENTATION – Range Resources Corp – slide 61
    Margins are Tightening 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2006 2007 2008 2009 2010E Realized Prices 6.79 8.03 8.58 6.86 5.30 Cash Costs 2.19 2.39 2.59 2.29 2.14 Cash Margin 4.60 5.64 5.99 4.57 3.16 Reserve Rep. (1)…
  62. COMPANY PRESENTATION – Range Resources Corp – slide 62
    Full Cycle Return on Investment Range ROI should improve substantially as Marcellus results become a larger percentage of historical company results 180% 160% 140% 5 Year Average ROI 120% 100% 80% 60% 40% 20%…
  63. COMPANY PRESENTATION – Range Resources Corp – slide 63
    Strong, Simple Balance Sheet Year-End Year-End Year-End Year-End March 31, June 30, 2006 2007 2008 2009 2010 2010 ( in millions) Bank borrowings 452 304 693 324 354 475 Sr. Sub. Notes 597 847 1,098 1,384 1,384 1,385 Less: Cash (2)…
  64. COMPANY PRESENTATION – Range Resources Corp – slide 64
    Ranges Outstanding Bonds Corporate Rating: BB / Ba2 Outlook: Stable Senior Subordinated Notes Amount Rating Current YTW 7.375% due 2013 200 BB / Ba3 6.104% 6.375% due 2015 150 BB / Ba3 6.183% 7.5% due 2016 250 BB / Ba3 6.717%…
  65. COMPANY PRESENTATION – Range Resources Corp – slide 65
    Debt Maturities Range maintains an even, manageable debt maturity profile 600 Pro forma for call of 200 million 500 500 2013 bonds and inssuance of 500 million in bonds due 2020 in August. 400 ( Millions ) 300 300 250…
  66. COMPANY PRESENTATION – Range Resources Corp – slide 66
    Range Financing History Sources and Uses 8.0 2010 Forecast 7.5 7.0 6.5 Cum Cash Flow + Growth (Equity, Debt) 6.0 Cum. Cash Flow (Includes Divestiture Proceeds) 5.5 Marcellus Growth: Equity acreage 5.0 ( Billions) Growth:…
  67. COMPANY PRESENTATION – Range Resources Corp – slide 67
    Hedging Status Hedges Insulate Cashflow Gas Oil Average Average Average Average Volumes Floor Ceiling Volumes Floor Ceiling Hedged Price Price Hedged Price Price (Mmbtu/day) (Bbls/day) 3Q2010 Collars 315,000 5.55 7.19 1,000…
  68. COMPANY PRESENTATION – Range Resources Corp – slide 68
    2010 Capital Budget (1) Budget = 1.2 Billion Budget by Area Drilling & Recompletion Pipelines, Facilities & Other Marcellus Midcontinent Acreage & Seismic Southwest Appalachia/Nora 73% 77% 81% 11% 8% 5% 5% 5% 7% 22%…
  69. COMPANY PRESENTATION – Range Resources Corp – slide 69
    Proved Reserve Profile Total Proved Reserves 3.1 Tcfe Proved Developed Appalachia Midcontinent Proved Undeveloped Southwest 58% 45% 34% 55% 8% As of 12/31/09 Range Resources Corporation Company Presentation l…
  70. COMPANY PRESENTATION – Range Resources Corp – slide 70
    Consistent Reserve Growth (Bcfe) 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2005 2006 2007 2008 2009 Proved Developed Proved Undeveloped Range Resources Corporation Company Presentation l August 2010 l 71

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