Range reports 1Q lossApril 26, 2013
A. Lee Graham
Range Resources Corp. of Fort Worth has reported a $75.6 million loss in the first quarter of 2013 as the company recorded charges on hedging and other items. At the same time, the company enjoyed higher revenue.
Revenue and other income for the quarter surged 27 percent to $319.2 million, while sales of natural gas, natural gas liquids (NGLs) and oil rose 25 percent to $398.2 million.
The company’s newly released first-quarter financial results follow its production report for the quarter, released earlier this month.
The report saw the company achieve record daily production of 876 million cubic feet equivalent of oil per day in first-quarter 2013, 34 percent more than the same period last year.
“We accomplished a great deal so far in 2013,” said president and CEO Jeff Ventura, commenting in a news release.
“Our 34 percent production increase coupled with the 10-percent reduction in unit costs reflects the high quality of our asset base and exceptional performance by the entire Range team,” Ventura said.
First quarter 2013 earnings included a $100.3 million loss in the mark-to-market reduction in value of the company’s derivatives, a $35 million provision for possible settlement of a class action lawsuit regarding post-production costs charged to Oklahoma royalty owners in prior years, and $12.3 million of non-cash stock compensation expenses, among other items.
Excluding those items, net income would have totaled $52.9 million or 33 cents per diluted share, according to the company.
“We continue to fine-tune our drilling and completion process in our core plays, and we are seeing improved well performance and greater capital efficiency. We are well on track to achieve our production growth target of 20 percent to 25 percent for 2013,” Ventura said.
Year-over-year oil and condensate production increased 52 percent and natural gas liquids production rose 22 percent, while natural gas production increased 34 percent.
Driving the record production was continued strength of Range’s drilling program primarily in the Marcellus Shale, according to the company.
Several non-cash or non-recurring items impacted first-quarter results, according to the company. Among those was a $96.8 million mark-to-market commodity hedge loss.
The company said it remains “on track” with its 2013 capital expenditure budget of $1.3 billion.
The first quarter also saw Range complete an offering of $750 million senior subordinated notes due 2023 that carry a 5 percent interest rate. Net proceeds of $737.8 million were used to repay the outstanding balance on the company’s bank credit facility. At the end of the first quarter, Range had about $1.6 billion of liquidity available under its credit facility.
The quarter saw Range close a $275 million sale of certain Permian Basin properties in West Texas and southeast New Mexico. The properties comprise about 7,000 net acres and production totaling about 18 million cubic feet equivalent per day. Including the sale, Range has sold $2.3 billion in assets since 2004 to focus its resources and personnel on achieving the highest rate of return projects, it said.
Range Resources Corp. is an independent oil and natural gas producer focusing its operations in Appalachia and the southwest portion of the United States. More information is available at www.rangeresources.com