Range Res (NYSE:RRC)
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5 Years : From Apr 2012 to Apr 2017
Range Resources Corp. (RRC) said Wednesday that a U.S. Environmental Protection Agency determination that the company's natural gas drilling contaminated two drinking wells in the Barnett Shale won't affect the planned sale of its assets in the north Texas field.
The EPA said Tuesday that the oil and gas producer contaminated two wells in the Barnett Shale, the first time federal regulators have said that a shale-drilling operation is a public-health danger. Regulators said natural gas found in the water wells, located outside of Fort Worth, "posed an imminent and substantial risk of explosion or fire," and that other contaminants were found in the water.
The company said it is not the cause of the contamination.
The EPA's determination won't hurt the oil and gas producer's plans to sell its Barnett assets by early next year, said Rodney Waller, a senior vice president with Range, according to a webcast presentation at a Wells Fargo energy conference.
"This is a very minor part of our whole Barnett position, and [we] don't think this will have any consequence to our sale," Waller said.
Range announced in October that it would sell its Barnett Shale assets, which the company says account for about 23% of its gas production and include 360 producing wells. Analysts say the assets will likely fetch more than $1 billion.
The EPA's move comes amid concerns that hydraulic fracturing, the drilling technique that has made possible the widespread success in drilling in shale formations, may pollute groundwater. The technique involves pumping water and chemicals at high pressure deep underground to break up rock formations to extract the oil and gas trapped within. It is unclear whether the contamination is due to hydraulic fracturing or other mechanical or engineering problems at the Range well site.
Range executives have said the planned Barnett sale, which is expected to close early next year, will allow the company to focus on operations in the Marcellus shale in the U.S. Northeast. Range expects to ramp up gas output in the Marcellus to 400 million cubic feet a day in 2011, up from the 200 million cubic feet a day targeted for the end of this year.
-By Matt Day, Dow Jones Newswires; 212-416-4986; firstname.lastname@example.org
--Ryan Dezember and Angel Gonzalez contributed to this article.