Range Resources' 3Q Production Jumped 7%, Driven By Marcellus Shale

Date : 10/18/2011 @ 12:22PM
Source : Dow Jones News
Stock : Range Resources Corp. (RRC)
Quote : 25.31  -0.24 (-0.94%) @ 4:04PM

Range Resources' 3Q Production Jumped 7%, Driven By Marcellus Shale

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Range Resources Corp. (RRC) said Tuesday its third-quarter production rose 7% from the same quarter a year earlier driven by a jump in Pennsylvania's Marcellus shale output, highlighting the productivity of the region.

Range Resources' quarterly production increased to an average of 537.2 million cubic feet of gas equivalent per day came even after the company sold in April its Barnett Shale properties in Texas, which at the time represented about 20% total production. Adjusting for the asset sale, Range Resources third-quarter production would have increased 27%, the company said in a press release. The company sold its Barnett shale properties for about $900 million to focus on developing its Marcellus shale operations.

Third-quarter output volumes also exceeded the guidance of 515 million cubic feet of gas equivalent per day to 520 million cubic feet of gas equivalent per day Range Resources have previously provided due to infrastructure build-out proceeding faster than anticipated, the company said.

The company's quarterly production was 76% natural gas, 17% natural-gas liquids, and 7% crude oil. Year-over-year, oil production increased by 13%, natural-gas liquids production rose 11%, while natural-gas production increased 5%. The greater relative increase in oil and natural-gas liquids production is due to Range's capital spending emphasis in its liquids-rich plays, the company said.

Range Resources' Marcellus Shale is on track to reach the 2011 year-end net production target of 400 Mmcfe per day, the company said. Currently, total production from the area is running at about 350 Mmcfe per day. Range's Marcellus fields are more productive than some of the company's holdings in other areas and are richer in natural-gas liquids, which sell at a higher price than dry gas.

The high productivity of the Marcellus Shale has lured several energy companies, including oil giants Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), which have recently acquired large positions in the region. Range Resources, which is one of the largest lease-holders in the Marcellus, is seen by analysts as a potential acquisition target by companies seeking to increase their foothold.

-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; isabel.ordonez@dowjones.com

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