Range Announces Appalachian Overriding Royalty Sale for $300 Million
October 15 2018 - 4:15PM
RANGE RESOURCES CORPORATION (NYSE: RRC) today
announced that it has signed and closed on an agreement to sell a
proportionately reduced 1% overriding royalty in its Washington
County, Pennsylvania leases for gross proceeds of $300 million.
Range’s Washington County properties encompass
approximately 300,000 net surface acres that produced 1.7 Bcfe net
per day in the second quarter of 2018. The overriding royalty
applies to existing and future Marcellus, Utica and Upper Devonian
development on the subject leases, while excluding shallower and
deeper formations. Post-close, Range maintains a net revenue
interest of approximately 82% on the subject Washington County
acreage. Cash flow associated with the 1% overriding royalty
is expected to be approximately $25 million in 2019. The net
proceeds will be used to reduce total debt by an expected 7%, which
lowers annualized interest expense by about $15 million, resulting
in a net reduction in estimated 2019 cash flow of approximately $10
million.
Jeff Ventura, Range’s CEO and President,
commented, “This transaction highlights the quality and value of
Range’s inventory and represents a realization of a portion of that
embedded value. We have made steady progress this year on our
strategic objective of pairing Range’s world-class asset base with
a strong balance sheet. This sale and corresponding
debt reduction – coupled with Range’s consistent operational
execution and beneficial exposure to improved liquids pricing –
brings our projected year-end leverage below 3.0x debt to EBITDAX
without additional sales. Range will continue to pursue asset
sales to bring forward inventory value, high-grade the portfolio
and strengthen our financial position, with the focus of maximizing
long-term shareholder returns.”
J.P. Morgan Securities LLC acted as the
financial advisor to Range on the transaction. Vinson & Elkins
LLP acted as legal advisor.
RANGE RESOURCES CORPORATION (NYSE:
RRC) is a leading U.S. independent natural gas, NGL and
oil producer with operations focused in stacked-pay projects in the
Appalachian Basin and North Louisiana. The Company pursues an
organic growth strategy targeting high return, low-cost projects
within its large inventory of low risk development drilling
opportunities. The Company is headquartered in Fort Worth, Texas.
More information about Range can be found at
www.rangeresources.com.
Range Investor Contact:
Laith Sando, Vice President – Investor
Relations817-869-4267lsando@rangeresources.com
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