RANGE RESOURCES CORPORATION (NYSE: RRC) today
announced its first quarter 2020 financial results.
First Quarter Highlights –
- GAAP cash flow provided from operating activities of $125
million, and non-GAAP cash flow of $125 million
- GAAP net income of $145 million ($0.58 per diluted share), and
non-GAAP net income of $10 million ($0.04 per diluted share)
- Cash unit costs of $1.93 per mcfe, an improvement of $0.20 per
mcfe versus prior-year period
- Natural gas differentials, including basis hedging, averaged
$0.12 per mcf below NYMEX
- NGL differential of $1.30 per barrel above Mont Belvieu, best
in recent Company history
- In January, issued $550 million senior notes due 2026, with
proceeds used to redeem $500 million senior notes due 2021 and
2022
- In March, Range’s $3.0 billion borrowing base and $2.4 billion
elected commitment were reaffirmed
- Production averaged 2,294 Mmcfe per day, approximately 70%
natural gas
- Southwest Pennsylvania production increased 7% over the
prior-year period to 2,042 Mmcfe per day
Commenting on the quarter, Jeff Ventura, the
Company’s CEO said, “The Range team has met the unique challenges
of working through this pandemic with dedication and compassion,
making sure that our business plans remains on track, while
prioritizing health and safety. Range continues to make
steady progress on key near-term objectives: improving our cost
structure, bolstering liquidity, and operating safely while
maintaining peer-leading capital efficiency. These efforts
have positioned Range to successfully navigate the current
commodity environment and benefit from an improved outlook for
natural gas and natural gas liquids, particularly given Range’s
peer-leading drilling inventory.”
Financial Discussion
Except for generally accepted accounting
principles (GAAP) reported amounts, specific expense categories
exclude non-cash impairments, unrealized mark-to-market adjustment
on derivatives, non-cash stock compensation and other items shown
separately on the attached tables. “Unit costs” as used in
this release are composed of direct operating, transportation,
gathering, processing and compression, production and ad valorem
taxes, general and administrative, interest and depletion,
depreciation and amortization costs divided by production.
See “Non-GAAP Financial Measures” for a definition of each of the
non-GAAP financial measures and the tables that reconcile each of
the non-GAAP measures to their most directly comparable GAAP
financial measure.
First Quarter 2020
GAAP revenues for first quarter 2020
totaled $694 million, GAAP net cash provided from operating
activities (including changes in working capital) was $125
million, and GAAP net income was $145 million ($0.58 per
diluted share). First quarter earnings results include a gain
on asset sales of $122 million and a $233
million derivative fair value gain due to decreases in
commodity prices.
Non-GAAP revenues for first quarter 2020
totaled $561 million, and cash flow from operations before
changes in working capital, a non-GAAP measure, was $125
million. Adjusted net income comparable to analysts’
estimates, a non-GAAP measure, was $10 million ($0.04 per
diluted share) in first quarter 2020.
The following table details Range’s average
production and realized pricing for first quarter 2020:
|
1Q20 Production & Realized Pricing |
|
|
Natural Gas(Mcf) |
|
NGLs (Bbl) |
|
Oil(Bbl) |
|
Natural GasEquivalent (Mcfe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Production per day |
|
1,601,765 |
|
105,858 |
|
9,542 |
|
2,294,160 |
|
|
|
|
|
|
|
|
|
Average NYMEX price |
|
$1.95 |
|
|
|
$47.11 |
|
|
Differential, including basis
hedging |
|
(0.12) |
|
|
|
(6.10) |
|
|
Realized prices before NYMEX
hedges |
|
1.83 |
|
$ 14.87 |
|
41.01 |
|
|
Settled NYMEX hedges |
|
0.45 |
|
1.04 |
|
11.19 |
|
|
Average realized prices after
hedges (a) |
|
$ 2.29 |
|
$ 15.91 |
|
$ 52.20 |
|
$ 2.55 |
(a) May not add due to
rounding.
First quarter 2020 natural gas, NGLs and oil
price realizations (including the impact of derivative settlements
which correspond to analysts’ estimates) averaged $2.55 per
mcfe. Additional detail on commodity price realizations can
be found in the Supplemental Tables provided on the Company’s
website.
- The average natural gas price, including the impact of basis
hedging, was $1.83 per mcf, or a ($0.12) per mcf differential to
NYMEX. First quarter natural gas differentials benefit from
capacity to premium northeast markets in the winter months and
Range’s ability to hedge those basis locations.
- Pre-hedge NGL realizations were $14.87 per barrel, or $1.30 per
barrel premium to the Mont Belvieu weighted barrel, as shown on
Supplemental Table 9 on the Company’s website. Range
continues to improve on its NGL pricing versus benchmarks, as the
first quarter differential to Mont Belvieu was another
best in recent Company history. Range expects to maintain a
strong NGL differential during 2020 as a result of access to
international markets and its diversified portfolio of sales
agreements.
- Crude oil and condensate price realizations, before realized
hedges, averaged $41.01 per barrel, or $6.10 below WTI (West Texas
Intermediate).
Unit Costs
The following table details Range’s unit costs
per mcfe(a):
Expenses |
|
1Q 2020($/Mcfe) |
|
|
1Q 2019 ($/Mcfe) |
|
|
Increase (Decrease) |
|
|
|
|
|
|
|
|
|
Direct operating(a) |
$ |
0.15 |
|
$ |
0.16 |
|
|
(6 |
%) |
Transportation, gathering,
processing and compression |
|
1.36 |
|
|
1.49 |
|
|
(9 |
%) |
Production and ad valorem
taxes |
|
0.04 |
|
|
0.06 |
|
|
(33 |
%) |
General and
administrative(a) |
|
0.16 |
|
|
0.18 |
|
|
(11 |
%) |
Interest expense(a) |
|
0.22 |
|
|
0.25 |
|
|
(12 |
%) |
Total cash unit costs(b) |
|
1.93 |
|
|
2.13 |
|
|
(9 |
%) |
Depletion, depreciation and
amortization (DD&A) |
|
0.49 |
|
|
0.68 |
|
|
(28 |
%) |
Total unit costs plus DD&A(b) |
$ |
2.43 |
|
$ |
2.81 |
|
|
(14 |
%) |
(a) |
Excludes
stock-based compensation, legal settlements and amortization of
deferred financing costs. |
(b) |
May not add due to rounding. |
Capital Expenditures
First quarter 2020 drilling and completion
expenditures were $124 million. In addition, during the
quarter, $4.1 million was spent on acreage and $2.0 million on
gathering systems. Range remains on track to spend at or
below its reduced total capital budget of $430 million for
2020.
Financial Position and Buyback
Activity
Range’s $3.0 billion borrowing base
and $2.4 billion commitment amount were reaffirmed during
first quarter 2020 with no changes to financial covenants.
The credit facility matures on April 13, 2023 and is
subject to semi-annual redeterminations. The Company had over $1.5
billion of borrowing capacity under the current commitment amount
at the end of the first quarter.
In January 2020, Range issued $550 million
aggregate principal amount of 9.25% senior notes due 2026. On
the closing of the senior notes, proceeds were used to redeem $500
million aggregate principal amount of the Company’s senior notes
due 2021 and senior notes due 2022, which was completed in February
2020. Also announced in January, the Company suspended its
dividend, which was approximately $20 million annually,
to prioritize debt reduction.
Range repurchased and retired
approximately $111 million in principal amount of its
senior notes during the first quarter at an average weighted
discount to par of 28%. Range also repurchased eight million
shares of the Company’s common stock during the first quarter at an
average price of $2.80 per share. At the end of the quarter,
Range had approximately $71 million remaining on
the Company’s $100 million share repurchase program.
Operational Discussion
The table below summarizes estimated activity
for 2020 regarding the number of wells to sales for each
area.
|
|
|
Wells TIL1Q 2020 |
|
Calendar 2020Planned TIL |
|
Remaining2020 |
SW PA Super-Rich |
|
|
0 |
|
3 |
|
3 |
SW PA Wet |
|
|
12 |
|
31 |
|
19 |
SW PA Dry |
|
|
8 |
|
33 |
|
25 |
Total Wells |
|
|
20 |
|
67 |
|
47 |
Production by Area
Total production for first quarter 2020 averaged
approximately 2,294 net Mmcfe per day. The southwest
Appalachia area averaged 2,042 net Mmcfe per day during the
quarter, a 7% increase over first quarter 2019. The northeast
Marcellus properties averaged 86 net Mmcf per day, including
approximately 9 net Mmcf per day of legacy acreage production that
was sold in March. North Louisiana production during first
quarter 2020 averaged approximately 166 net Mmcfe per
day.
Marketing and
Transportation
Range’s liquids marketing continued to expand
premiums relative to Mont Belvieu pricing, with first quarter NGL
realizations averaging a $1.30 premium. The portfolio of
domestic and international ethane contracts performed very well
during the quarter and generated a significant uplift relative to
Mont Belvieu while propane and butane markets benefited from an
increase in Marcus Hook export premiums. As the quarter
progressed, propane fundamentals improved despite a warmer than
average winter. The improvements were driven by decreasing
domestic propane production which fell over 400,000 barrels per day
from the end of last year. Given the significant reduction in
U.S. drilling activity announced over the past several weeks, Range
expects decreases in natural gas and NGL supply to accelerate as
the year continues and into 2021. Range also expects to
benefit from strong export realizations this year with a 15,000
barrel per day increase in Mariner East 2 pipeline and dock
capacity that became operational April 1st.
Condensate sales and pricing were strong during
the first quarter, as Range’s differential was ($6.10) below
WTI. However, entering second quarter, demand for gasoline
and jet fuel have been directly impacted by COVID-19 related
reductions in vehicle and air travel. While Range anticipates
some second quarter weakness in condensate pricing, the Company’s
diverse portfolio of condensate counterparties with sales
contracted on monthly, quarterly, and annual bases helps shield the
majority of production from the spot market. Range continues
to expect annual condensate differentials to be WTI minus $7 - $8
per barrel, and Range’s strong WTI hedge protection in the form of
swaps serve to mitigate the financial impacts from lower prices.
Range had a natural gas differential of ($0.12)
during the first quarter, including the benefit of basis
hedging. The Company’s transportation portfolio provides
access to premium winter markets for natural gas in the Midwest and
Northeast, and while an 11% warmer than normal winter caused those
markets to realize lower than normal premiums, Range’s basis
hedging activity captured a large portion of a higher priced market
during last November’s early cold weather. As a result,
Range remains on track with its differential to NYMEX guidance of
($0.20) - ($0.26) for the year.
The Range marketing team continues to maximize
the utilization of the Company’s existing production
infrastructure, which resulted in gathering, processing and
compression (GP&T) expense, improving to $1.36 per mcfe in the
first quarter. Due to optimized planning efforts and
the efficient utilization of Range’s GP&T portfolio, coupled
with lower processing costs and contract renegotiations, the
Company is improving its full-year transportation, gathering,
processing and compression expense guidance to $1.37 to $1.40 per
mcfe.
Guidance – 2020
Production per day Guidance
Production for full-year 2020 is expected to
average approximately 2.3 Bcfe per day, with ~70% natural gas
production.
Full Year 2020 Expense
Guidance
Direct operating expense: |
$0.14 - $0.16 per mcfe |
Transportation, gathering,
processing and compression expense: |
$1.37 - $1.40 per mcfe |
Production tax expense: |
$0.04 - $0.05 per mcfe |
Exploration expense: |
$30.0 - $38.0 million |
G&A expense: |
$0.14 - $0.16 per mcfe |
Interest expense: |
$0.22 - $0.24 per mcfe |
DD&A expense: |
$0.48 - $0.52 per mcfe |
Net brokered gas marketing
expense: |
$10.0 - $16.0 million |
Full Year 2020 Price
Guidance
Based on current market indications, Range
expects to average the following price differentials for its
production in 2020.
Natural Gas:(1) |
NYMEX minus $0.20 to $0.26 |
Natural Gas Liquids (including
ethane):(2) |
Mont
Belvieu plus $0.50 to $1.50 per barrel |
Oil/Condensate: |
WTI minus $7.00 to $8.00 per barrel |
(1) |
Including
basis hedging. |
(2) |
Weighting based on 53% ethane, 27% propane, 7% normal butane,
4% iso-butane and 9% natural gasoline. |
Hedging Status
Range hedges portions of its expected future
production to increase the predictability of cash flow and to help
maintain a more flexible financial position. Range has over
70% of its remaining 2020 natural gas production hedged at a
weighted average floor price of $2.57 per Mmbtu. Similarly,
Range has hedged over 80% of its remaining 2020 projected crude oil
production at an average floor price of $58.22. Please see
Range’s detailed hedging schedule posted at the end of the
financial tables below and on its website at
www.rangeresources.com.
Range has also hedged Marcellus and other basis
differentials to limit volatility between NYMEX and regional
prices. The fair value of basis hedges was a gain of $4.8
million as of March 31, 2020. The Company also has propane
basis swap contracts and freight swaps which lock in the
differential between Mont Belvieu and international propane
indices. The combined fair value of these contracts was a
loss of $4.0 million on March 31, 2020.
Conference Call Information
A conference call to review the financial
results is scheduled on Friday, May 1 at 9:00 a.m. ET. A
webcast of the call may be accessed at www.rangeresources.com. The
webcast will be archived for replay on the Company's website until
June 1, 2020.
To participate in the call, dial 877-928-8777
and provide conference code 4828938 about 15 minutes prior to the
scheduled start time.
Non-GAAP Financial Measures
Adjusted net income comparable to analysts’
estimates as set forth in this release represents income or loss
from operations before income taxes adjusted for certain non-cash
items (detailed in the accompanying table) less income taxes.
We believe adjusted net income comparable to analysts’ estimates is
calculated on the same basis as analysts’ estimates and that many
investors use this published research in making investment
decisions and evaluating operational trends of the Company and its
performance relative to other oil and gas producing
companies. Diluted earnings per share (adjusted) as set forth
in this release represents adjusted net income comparable to
analysts’ estimates on a diluted per share basis. A table is
included which reconciles income or loss from operations to
adjusted net income comparable to analysts’ estimates and diluted
earnings per share (adjusted). The Company provides
additional comparative information on prior periods along with
non-GAAP revenue disclosures on its website.
Cash flow from operations before changes in
working capital (sometimes referred to as “adjusted cash flow”) as
defined in this release represents net cash provided by operations
before changes in working capital and exploration expense adjusted
for certain non-cash compensation items. Cash flow from
operations before changes in working capital is widely accepted by
the investment community as a financial indicator of an oil and gas
company’s ability to generate cash to internally fund exploration
and development activities and to service debt. Cash flow
from operations before changes in working capital is also useful
because it is widely used by professional research analysts in
valuing, comparing, rating and providing investment recommendations
of companies in the oil and gas exploration and production
industry. In turn, many investors use this published research
in making investment decisions. Cash flow from operations
before changes in working capital is not a measure of financial
performance under GAAP and should not be considered as an
alternative to cash flows from operations, investing, or financing
activities as an indicator of cash flows, or as a measure of
liquidity. A table is included which reconciles net cash
provided by operations to cash flow from operations before changes
in working capital as used in this release. On its website,
the Company provides additional comparative information on prior
periods for cash flow, cash margins and non-GAAP earnings as used
in this release.
The cash prices realized for oil and natural gas
production, including the amounts realized on cash-settled
derivatives and net of transportation, gathering, processing and
compression expense, is a critical component in the Company’s
performance tracked by investors and professional research analysts
in valuing, comparing, rating and providing investment
recommendations and forecasts of companies in the oil and gas
exploration and production industry. In turn, many investors
use this published research in making investment decisions.
Due to the GAAP disclosures of various derivative transactions and
third-party transportation, gathering, processing and compression
expense, such information is now reported in various lines of the
income statement. The Company believes that it is important
to furnish a table reflecting the details of the various components
of each line in the statement of operations to better inform the
reader of the details of each amount and provide a summary of the
realized cash-settled amounts and third-party transportation,
gathering, processing and compression expense which were
historically reported as natural gas, NGLs and oil sales.
This information is intended to bridge the gap between various
readers’ understanding and fully disclose the information
needed.
The Company discloses in this release the
detailed components of many of the single line items shown in the
GAAP financial statements included in the Company’s quarterly
report on Form 10-Q. The Company believes that it is
important to furnish this detail of the various components
comprising each line of the Statements of Operations to better
inform the reader of the details of each amount, the changes
between periods and the effect on its financial results.
RANGE RESOURCES CORPORATION (NYSE:
RRC) is a leading U.S. independent oil and natural gas
producer with operations focused in stacked-pay projects in
the Appalachian Basin and North Louisiana. The Company pursues
an organic development 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.
Included within this release are certain
“forward-looking statements” within the meaning of the federal
securities laws, including the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, that are not
limited to historical facts, but reflect Range’s current beliefs,
expectations or intentions regarding future events. Words
such as “may,” “will,” “could,” “should,” “expect,” “plan,”
“project,” “intend,” “anticipate,” “believe,” “outlook”,
“estimate,” “predict,” “potential,” “pursue,” “target,” “continue,”
and similar expressions are intended to identify such
forward-looking statements.
All statements, except for statements of
historical fact, made within regarding activities, events or
developments the Company expects, believes or anticipates will or
may occur in the future, such as those regarding future well costs,
expected asset sales, well productivity, future liquidity and
financial resilience, anticipated exports and related financial
impact, NGL market supply and demand, improving commodity
fundamentals and pricing, future capital efficiencies, future
shareholder value, emerging plays, capital spending, anticipated
drilling and completion activity, acreage prospectivity, expected
pipeline utilization and future guidance information, are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements are
based on assumptions and estimates that management believes are
reasonable based on currently available information; however,
management's assumptions and Range's future performance are subject
to a wide range of business risks and uncertainties and there is no
assurance that these goals and projections can or will be met. Any
number of factors could cause actual results to differ materially
from those in the forward-looking statements. Further
information on risks and uncertainties is available in Range's
filings with the Securities and Exchange Commission (SEC),
including its most recent Annual Report on Form 10-K. Unless
required by law, Range undertakes no obligation to publicly update
or revise any forward-looking statements to reflect circumstances
or events after the date they are made.
The SEC permits oil and gas companies, in
filings made with the SEC, to disclose proved reserves, which are
estimates that geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions as well
as the option to disclose probable and possible reserves.
Range has elected not to disclose its probable and possible
reserves in its filings with the SEC. Range uses certain
broader terms such as "resource potential,” “unrisked resource
potential,” "unproved resource potential" or "upside" or other
descriptions of volumes of resources potentially recoverable
through additional drilling or recovery techniques that may include
probable and possible reserves as defined by the SEC's
guidelines. Range has not attempted to distinguish probable
and possible reserves from these broader classifications. The SEC’s
rules prohibit us from including in filings with the SEC these
broader classifications of reserves. These estimates are by
their nature more speculative than estimates of proved, probable
and possible reserves and accordingly are subject to substantially
greater risk of actually being realized. Unproved resource
potential refers to Range's internal estimates of hydrocarbon
quantities that may be potentially discovered through exploratory
drilling or recovered with additional drilling or recovery
techniques and have not been reviewed by independent
engineers. Unproved resource potential does not constitute
reserves within the meaning of the Society of Petroleum Engineer's
Petroleum Resource Management System and does not include proved
reserves. Area wide unproven resource potential has not been
fully risked by Range's management. “EUR”, or estimated
ultimate recovery, refers to our management’s estimates of
hydrocarbon quantities that may be recovered from a well completed
as a producer in the area. These quantities may not necessarily
constitute or represent reserves within the meaning of the Society
of Petroleum Engineer’s Petroleum Resource Management System or the
SEC’s oil and natural gas disclosure rules. Actual quantities that
may be recovered from Range's interests could differ
substantially. Factors affecting ultimate recovery include
the scope of Range's drilling program, which will be directly
affected by the availability of capital, drilling and production
costs, commodity prices, availability of drilling services and
equipment, drilling results, lease expirations, transportation
constraints, regulatory approvals, field spacing rules, recoveries
of gas in place, length of horizontal laterals, actual drilling
results, including geological and mechanical factors affecting
recovery rates and other factors. Estimates of resource
potential may change significantly as development of our resource
plays provides additional data.
In addition, our production forecasts and
expectations for future periods are dependent upon many
assumptions, including estimates of production decline rates from
existing wells and the undertaking and outcome of future drilling
activity, which may be affected by significant commodity price
declines or drilling cost increases. Investors are urged to
consider closely the disclosure in our most recent Annual Report on
Form 10-K, available from our website at www.rangeresources.com or
by written request to 100 Throckmorton Street, Suite 1200, Fort
Worth, Texas 76102. You can also obtain this Form 10-K on the
SEC’s website at www.sec.gov or by calling the SEC at
1-800-SEC-0330.
Investor Contacts:
Laith Sando, Vice President – Investor
Relations817-869-4267lsando@rangeresources.com
John Durham, Senior Financial
Analyst817-869-1538jdurham@rangeresources.com
Range Media Contacts:
Mark Windle, Manager of Corporate Communications
724-873-3223 mwindle@rangeresources.com
RANGE RESOURCES CORPORATION
STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
Based on GAAP reported
earnings with additional |
|
|
|
|
|
|
|
|
|
|
|
details of items included in
each line in Form 10-Q |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in thousands,
except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
|
|
% |
Revenues and other income: |
|
|
|
|
|
|
|
|
|
|
|
Natural gas, NGLs and oil sales (a) |
$ |
432,096 |
|
|
$ |
671,654 |
|
|
|
|
|
Derivative fair value (loss)/income |
|
233,175 |
|
|
|
(61,731 |
) |
|
|
|
|
Brokered natural gas, marketing and other (b) |
|
28,389 |
|
|
|
138,143 |
|
|
|
|
|
Other (b) |
|
260 |
|
|
|
71 |
|
|
|
|
|
Total revenues and other income |
|
693,920 |
|
|
|
748,137 |
|
|
|
-7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Direct operating |
|
31,585 |
|
|
|
32,636 |
|
|
|
|
|
Direct operating – non-cash stock-based compensation (c) |
|
450 |
|
|
|
591 |
|
|
|
|
|
Transportation, gathering, processing and compression |
|
284,765 |
|
|
|
302,655 |
|
|
|
|
|
Production and ad valorem taxes |
|
9,019 |
|
|
|
11,310 |
|
|
|
|
|
Brokered natural gas and marketing |
|
32,211 |
|
|
|
131,857 |
|
|
|
|
|
Brokered natural gas and marketing – non-cash stock-based
compensation (c) |
|
413 |
|
|
|
448 |
|
|
|
|
|
Exploration |
|
6,747 |
|
|
|
7,723 |
|
|
|
|
|
Exploration – non-cash stock-based compensation (c) |
|
330 |
|
|
|
488 |
|
|
|
|
|
Abandonment and impairment of unproved properties |
|
5,413 |
|
|
|
12,659 |
|
|
|
|
|
General and administrative |
|
33,010 |
|
|
|
36,294 |
|
|
|
|
|
General and administrative – non-cash stock-based
compensation (c) |
|
8,029 |
|
|
|
9,638 |
|
|
|
|
|
General and administrative – lawsuit settlements |
|
815 |
|
|
|
706 |
|
|
|
|
|
General and administrative – bad debt expense |
|
400 |
|
|
|
— |
|
|
|
|
|
Termination costs |
|
1,595 |
|
|
|
— |
|
|
|
|
|
Deferred compensation plan (d) |
|
(8,537 |
) |
|
|
3,581 |
|
|
|
|
|
Interest expense |
|
45,457 |
|
|
|
49,749 |
|
|
|
|
|
Interest expense – amortization of deferred financing costs
(e) |
|
2,061 |
|
|
|
1,788 |
|
|
|
|
|
Gain on early extinguishment of debt |
|
(12,923 |
) |
|
|
— |
|
|
|
|
|
Depletion, depreciation and amortization |
|
102,986 |
|
|
|
138,718 |
|
|
|
|
|
Impairment of proved properties |
|
77,000 |
|
|
|
— |
|
|
|
|
|
(Gain) loss on sale of assets |
|
(122,099 |
) |
|
|
189 |
|
|
|
|
|
Total costs and expenses |
|
498,727 |
|
|
|
741,030 |
|
|
|
-33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
195,193 |
|
|
|
7,107 |
|
|
|
2646 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit): |
|
|
|
|
|
|
|
|
|
|
|
Current |
|
(363 |
) |
|
|
— |
|
|
|
|
|
Deferred |
|
50,581 |
|
|
|
5,688 |
|
|
|
|
|
|
|
50,218 |
|
|
|
5,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
144,975 |
|
|
$ |
1,419 |
|
|
|
10117 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Common
Share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.58 |
|
|
$ |
0.01 |
|
|
|
|
|
Diluted |
$ |
0.58 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding, as reported: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
246,218 |
|
|
|
247,776 |
|
|
|
1 |
% |
Diluted |
|
247,684 |
|
|
|
249,154 |
|
|
|
1 |
% |
(a) |
See separate
natural gas, NGLs and oil sales information table. |
(b) |
Included in Brokered natural gas, marketing and other revenues
in the 10-Q. |
(c) |
Costs associated with stock compensation and restricted stock
amortization, which have been reflected in the categories
associated with the direct personnel costs, which are combined with
the cash costs in the 10-Q. |
(d) |
Reflects the change in market value of the vested Company stock
held in the deferred compensation plan. |
(e) |
Included in interest expense in the 10-Q. |
|
|
BALANCE SHEETS |
|
|
|
|
|
|
|
(In thousands) |
|
March 31, |
|
|
|
December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(Unaudited) |
|
|
|
(Audited) |
|
Assets |
|
|
|
|
|
|
|
Current assets |
$ |
209,770 |
|
|
$ |
290,954 |
|
Derivative assets |
|
263,555 |
|
|
|
137,554 |
|
Natural gas and oil properties, successful efforts method |
|
5,989,967 |
|
|
|
6,041,035 |
|
Transportation and field assets |
|
5,394 |
|
|
|
5,375 |
|
Operating lease right-of-use assets |
|
56,412 |
|
|
|
62,053 |
|
Other |
|
64,540 |
|
|
|
75,432 |
|
|
$ |
6,589,638 |
|
|
$ |
6,612,403 |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
Current liabilities |
$ |
487,732 |
|
|
$ |
551,032 |
|
Asset retirement obligations |
|
2,393 |
|
|
|
2,393 |
|
Derivative liabilities |
|
— |
|
|
|
13,119 |
|
|
|
|
|
|
|
|
|
Bank debt |
|
545,270 |
|
|
|
464,319 |
|
Senior notes |
|
2,592,960 |
|
|
|
2,659,844 |
|
Senior subordinated notes |
|
48,799 |
|
|
|
48,774 |
|
Total debt |
|
3,187,029 |
|
|
|
3,172,937 |
|
|
|
|
|
|
|
|
|
Deferred tax liability |
|
210,803 |
|
|
|
160,196 |
|
Derivative liabilities |
|
6,823 |
|
|
|
949 |
|
Deferred compensation liability |
|
46,411 |
|
|
|
64,070 |
|
Operating lease liabilities |
|
36,768 |
|
|
|
41,068 |
|
Asset retirement obligations and other liabilities |
|
137,091 |
|
|
|
259,151 |
|
|
|
|
|
|
|
|
|
Common stock and retained earnings |
|
2,505,053 |
|
|
|
2,355,512 |
|
Other comprehensive loss |
|
(715 |
) |
|
|
(788 |
) |
Common stock held in treasury stock |
|
(29,750 |
) |
|
|
(7,236 |
) |
Total stockholders’ equity |
|
2,474,588 |
|
|
|
2,347,488 |
|
|
$ |
6,589,638 |
|
|
$ |
6,612,403 |
|
|
RECONCILIATION OF TOTAL
REVENUES AND OTHER INCOME TO TOTAL REVENUE EXCLUDING CERTAIN ITEMS,
a non-GAAP measure |
|
(Unaudited, in thousands) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues and other income,
as reported |
$ |
693,920 |
|
|
$ |
748,137 |
|
|
|
-7 |
% |
Adjustment for certain special
items: |
|
|
|
|
|
|
|
|
|
|
|
Total change in fair value related to derivatives prior to
settlement (gain) loss |
|
(133,246 |
) |
|
|
86,565 |
|
|
|
|
|
Total revenues, as adjusted, non-GAAP |
$ |
560,674 |
|
|
$ |
834,702 |
|
|
|
-33 |
% |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
(Unaudited in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
144,975 |
|
|
$ |
1,419 |
|
Adjustments to reconcile net
cash provided from continuing operations: |
|
|
|
|
|
|
|
Deferred income tax expense |
|
50,581 |
|
|
|
5,688 |
|
Depletion, depreciation, amortization and impairment |
|
179,986 |
|
|
|
138,718 |
|
Abandonment and impairment of unproved properties |
|
5,413 |
|
|
|
12,659 |
|
Derivative fair value (income) loss |
|
(233,175 |
) |
|
|
61,731 |
|
Cash settlements on derivative financial instruments |
|
99,929 |
|
|
|
24,834 |
|
Allowance for bad debts |
|
400 |
|
|
|
— |
|
Amortization of deferred issuance costs and other |
|
1,657 |
|
|
|
1,807 |
|
Deferred and stock-based compensation |
|
476 |
|
|
|
14,112 |
|
(Gain) loss on sale of assets and other |
|
(122,099 |
) |
|
|
189 |
|
Gain on early extinguishment of debt |
|
(12,923 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
Changes in working capital: |
|
|
|
|
|
|
|
Accounts receivable |
|
84,345 |
|
|
|
134,006 |
|
Inventory and other |
|
(4,432 |
) |
|
|
(4,763 |
) |
Accounts payable |
|
18,660 |
|
|
|
(30,431 |
) |
Accrued liabilities and other |
|
(89,287 |
) |
|
|
(99,275 |
) |
Net changes in working capital |
|
9,286 |
|
|
|
(463 |
) |
Net cash provided from operating activities |
$ |
124,506 |
|
|
$ |
260,694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET
CASH PROVIDED FROM OPERATING ACTIVITIES, AS REPORTED, TO CASH FLOW
FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL, a non-GAAP
measure |
|
|
|
|
|
|
|
(Unaudited, in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
Net cash provided from operating
activities, as reported |
$ |
124,506 |
|
|
$ |
260,694 |
|
Net changes in working capital |
|
(9,286 |
) |
|
|
463 |
|
Exploration expense |
|
6,747 |
|
|
|
7,723 |
|
Lawsuit settlements |
|
815 |
|
|
|
706 |
|
Termination costs |
|
1,595 |
|
|
|
— |
|
Non-cash compensation adjustment |
|
613 |
|
|
|
615 |
|
Cash flow from operations before changes in working capital –
non-GAAP measure |
$ |
124,990 |
|
|
$ |
270,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED WEIGHTED AVERAGE
SHARES OUTSTANDING |
|
|
|
|
|
|
|
(Unaudited, in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
Basic: |
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
249,409 |
|
|
|
250,320 |
|
Stock held by deferred
compensation plan |
|
(3,191 |
) |
|
|
(2,544 |
) |
Adjusted basic |
|
246,218 |
|
|
|
247,776 |
|
|
|
|
|
|
|
|
|
Dilutive: |
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
249,409 |
|
|
|
250,320 |
|
Dilutive stock options under
treasury method |
|
(1,725 |
) |
|
|
(1,166 |
) |
Adjusted dilutive |
|
247,684 |
|
|
|
249,154 |
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
NATURAL GAS, NGLs AND OIL SALES AND DERIVATIVE FAIR VALUE INCOME
(LOSS) TO CALCULATED CASH REALIZED NATURAL GAS, NGLs AND OIL PRICES
WITH AND WITHOUT THIRD PARTY TRANSPORTATION, GATHERING AND
COMPRESSION FEES, a non-GAAP measure |
|
|
(Unaudited, in thousands,
except per unit data) |
|
|
|
Three Months Ended March 31, |
|
|
2020 |
|
2019 |
|
% |
Natural gas, NGL and oil sales components: |
|
|
|
|
|
|
|
|
|
|
|
Natural gas sales |
$ |
253,249 |
|
|
$ |
434,720 |
|
|
|
|
|
NGL sales |
|
143,239 |
|
|
|
197,813 |
|
|
|
|
|
Oil sales |
|
35,608 |
|
|
|
39,121 |
|
|
|
|
|
Total oil and gas sales, as reported |
$ |
432,096 |
|
|
$ |
671,654 |
|
|
|
-36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative fair value income
(loss), as reported: |
$ |
233,175 |
|
|
$ |
(61,731 |
) |
|
|
|
|
Cash settlements on derivative
financial instruments – (gain) loss: |
|
|
|
|
|
|
|
|
|
|
|
Natural gas |
|
(80,172 |
) |
|
|
872 |
|
|
|
|
|
NGLs |
|
(10,043 |
) |
|
|
(24,864 |
) |
|
|
|
|
Crude Oil |
|
(9,714 |
) |
|
|
(842 |
) |
|
|
|
|
Total change in fair value
related to derivatives prior to settlement, a non-GAAP measure |
$ |
133,246 |
|
|
$ |
(86,565 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation, gathering,
processing and compression components: |
|
|
|
|
|
|
|
|
|
|
|
Natural gas |
$ |
169,841 |
|
|
$ |
189,082 |
|
|
|
|
|
NGLs |
|
114,924 |
|
|
|
113,573 |
|
|
|
|
|
Total transportation, gathering, processing and compression, as
reported |
$ |
284,765 |
|
|
$ |
302,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas, NGL and oil sales,
including cash-settled derivatives: (c) |
|
|
|
|
|
|
|
|
|
|
|
Natural gas sales |
$ |
333,421 |
|
|
$ |
433,848 |
|
|
|
|
|
NGL sales |
|
153,282 |
|
|
|
222,677 |
|
|
|
|
|
Oil sales |
|
45,322 |
|
|
|
39,963 |
|
|
|
|
|
Total |
$ |
532,025 |
|
|
$ |
696,488 |
|
|
|
-24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Production of oil and gas during
the periods (a): |
|
|
|
|
|
|
|
|
|
|
|
Natural gas (mcf) |
|
145,760,592 |
|
|
|
140,521,663 |
|
|
|
4 |
% |
NGL (bbl) |
|
9,633,035 |
|
|
|
9,612,547 |
|
|
|
- |
% |
Oil (bbl) |
|
868,297 |
|
|
|
805,550 |
|
|
|
8 |
% |
Gas equivalent (mcfe) (b) |
|
208,768,584 |
|
|
|
203,030,245 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Production of oil and gas –
average per day (a): |
|
|
|
|
|
|
|
|
|
|
|
Natural gas (mcf) |
|
1,601,765 |
|
|
|
1,561,352 |
|
|
|
3 |
% |
NGL (bbl) |
|
105,858 |
|
|
|
106,806 |
|
|
|
-1 |
% |
Oil (bbl) |
|
9,542 |
|
|
|
8,951 |
|
|
|
7 |
% |
Gas equivalent (mcfe)
(b) |
|
2,294,160 |
|
|
|
2,255,892 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Average prices, excluding
derivative settlements and before third partytransportation
costs: |
|
|
|
|
|
|
|
|
|
|
|
Natural gas (mcf) |
$ |
1.74 |
|
|
$ |
3.09 |
|
|
|
-44 |
% |
NGL (bbl) |
$ |
14.87 |
|
|
$ |
20.58 |
|
|
|
-28 |
% |
Oil (bbl) |
$ |
41.01 |
|
|
$ |
48.56 |
|
|
|
-16 |
% |
Gas equivalent (mcfe) (b) |
$ |
2.07 |
|
|
$ |
3.31 |
|
|
|
-37 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Average prices, including
derivative settlements before third party transportation costs:
(c) |
|
|
|
|
|
|
|
|
|
|
|
Natural gas (mcf) |
$ |
2.29 |
|
|
$ |
3.09 |
|
|
|
-26 |
% |
NGL (bbl) |
$ |
15.91 |
|
|
$ |
23.17 |
|
|
|
-31 |
% |
Oil (bbl) |
$ |
52.20 |
|
|
$ |
49.61 |
|
|
|
5 |
% |
Gas equivalent (mcfe) (b) |
$ |
2.55 |
|
|
$ |
3.43 |
|
|
|
-26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Average prices, including
derivative settlements and after third partytransportation costs:
(d) |
|
|
|
|
|
|
|
|
|
|
|
Natural gas (mcf) |
$ |
1.12 |
|
|
$ |
1.74 |
|
|
|
-36 |
% |
NGL (bbl) |
$ |
3.98 |
|
|
$ |
11.35 |
|
|
|
-65 |
% |
Oil (bbl) |
$ |
52.20 |
|
|
$ |
49.61 |
|
|
|
5 |
% |
Gas equivalent (mcfe) (b) |
$ |
1.18 |
|
|
$ |
1.94 |
|
|
|
-39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation, gathering and
compression expense per mcfe |
$ |
1.36 |
|
|
$ |
1.49 |
|
|
|
-8 |
% |
(a) |
Represents
volumes sold regardless of when produced. |
(b) |
Oil and NGL volumes are converted at the rate of one barrel
equals six mcfe based upon the approximate relative energy content
of oil to natural gas, which is not necessarily indicative of the
relationship of oil and natural gas prices. |
(c) |
Excluding third party transportation, gathering and compression
costs. |
(d) |
Net of transportation, gathering, and compression costs. |
|
|
RECONCILIATION OF
INCOME BEFORE INCOME TAXESAS REPORTED TO INCOME
BEFORE INCOME TAXES EXCLUDING CERTAIN ITEMS, a non-GAAP
measure |
|
|
(Unaudited, in thousands,
except per share data) |
|
|
|
Three Months Ended March 31, |
|
|
2020 |
|
2019 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations before
income taxes, as reported |
$ |
195,193 |
|
|
$ |
7,107 |
|
|
|
2646 |
% |
Adjustment for certain special
items: |
|
|
|
|
|
|
|
|
|
|
|
(Gain) loss on sale of assets |
|
(122,099 |
) |
|
|
189 |
|
|
|
|
|
Change in fair value related to derivatives prior to
settlement |
|
(133,246 |
) |
|
|
86,565 |
|
|
|
|
|
Abandonment and impairment of unproved properties |
|
5,413 |
|
|
|
12,659 |
|
|
|
|
|
Gain on early extinguishment of debt |
|
(12,923 |
) |
|
|
— |
|
|
|
|
|
Impairment of proved property |
|
77,000 |
|
|
|
— |
|
|
|
|
|
Lawsuit settlements |
|
815 |
|
|
|
706 |
|
|
|
|
|
Termination costs |
|
1,595 |
|
|
|
— |
|
|
|
|
|
Brokered natural gas and marketing – non-cash stock-based
compensation |
|
413 |
|
|
|
448 |
|
|
|
|
|
Direct operating – non-cash stock-based compensation |
|
450 |
|
|
|
591 |
|
|
|
|
|
Exploration expenses – non-cash stock-based compensation |
|
330 |
|
|
|
488 |
|
|
|
|
|
General & administrative – non-cash stock-based
compensation |
|
8,029 |
|
|
|
9,638 |
|
|
|
|
|
Deferred compensation plan – non-cash adjustment |
|
(8,537 |
) |
|
|
3,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes, as
adjusted |
|
12,433 |
|
|
|
121,972 |
|
|
|
-90 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit), as
adjusted |
|
|
|
|
|
|
|
|
|
|
|
Current |
|
(363 |
) |
|
|
— |
|
|
|
|
|
Deferred (a) |
|
3,108 |
|
|
|
30,510 |
|
|
|
|
|
Net income excluding certain items, a non-GAAP measure |
$ |
9,688 |
|
|
$ |
91,462 |
|
|
|
-89 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income per common
share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.04 |
|
|
$ |
0.37 |
|
|
|
-89 |
% |
Diluted |
$ |
0.04 |
|
|
$ |
0.37 |
|
|
|
-89 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted shares
outstanding, if dilutive |
|
247,684 |
|
|
|
249,154 |
|
|
|
|
|
(a) Deferred taxes are estimated to be approximately 25%
for 2020 and 2019.
RECONCILIATION OF NET INCOME (LOSS),
EXCLUDINGCERTAIN ITEMS AND ADJUSTED EARNINGS PER
SHARE, non-GAAP measures |
|
|
|
|
|
|
|
(In thousands, except per share
data) |
|
|
|
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Net income, as
reported |
$ |
144,975 |
|
|
$ |
1,419 |
|
Adjustment for certain
special items: |
|
|
|
|
|
|
|
(Gain) loss on sale of assets |
|
(122,099 |
) |
|
|
189 |
|
Gain on early extinguishment of debt |
|
(12,923 |
) |
|
|
— |
|
Change in fair value related to derivatives prior to
settlement |
|
(133,246 |
) |
|
|
86,565 |
|
Impairment of proved property |
|
77,000 |
|
|
|
— |
|
Abandonment and impairment of unproved properties |
|
5,413 |
|
|
|
12,659 |
|
Lawsuit settlements |
|
815 |
|
|
|
706 |
|
Termination costs |
|
1,595 |
|
|
|
— |
|
Non-cash stock-based compensation |
|
9,222 |
|
|
|
11,165 |
|
Deferred compensation plan |
|
(8,537 |
) |
|
|
3,581 |
|
Tax impact |
|
47,473 |
|
|
|
(24,822 |
) |
|
|
|
|
|
|
|
|
Net income excluding
certain items, a non-GAAP measure |
$ |
9,688 |
|
|
$ |
91,462 |
|
|
|
|
|
|
|
|
|
Net income per diluted
share, as reported |
$ |
0.58 |
|
|
$ |
0.01 |
|
Adjustment for certain
special items per diluted share: |
|
|
|
|
|
|
|
(Gain) loss on sale of assets |
|
(0.48 |
) |
|
|
0.00 |
|
Gain on early extinguishment of debt |
|
(0.05 |
) |
|
|
— |
|
Change in fair value related to derivatives prior to
settlement |
|
(0.53 |
) |
|
|
0.35 |
|
Impairment of proved property |
|
0.30 |
|
|
|
— |
|
Abandonment and impairment of unproved properties |
|
0.02 |
|
|
|
0.05 |
|
Lawsuit settlements |
|
0.00 |
|
|
|
0.00 |
|
Termination costs |
|
0.01 |
|
|
|
— |
|
Non-cash stock-based compensation |
|
0.04 |
|
|
|
0.04 |
|
Deferred compensation plan |
|
(0.03 |
) |
|
|
0.01 |
|
Adjustment for rounding differences |
|
(0.01 |
) |
|
|
0.01 |
|
Tax impact |
|
0.19 |
|
|
|
(0.10 |
) |
|
|
|
|
|
|
|
|
Net income per diluted
share, excluding certain items, a non- GAAP
measure |
$ |
0.04 |
|
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share, a non-GAAP measure: |
|
|
|
|
|
|
|
Basic |
$ |
0.04 |
|
|
$ |
0.37 |
|
Diluted |
$ |
0.04 |
|
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
RECONCILIATION OF CASH MARGIN PER MCFE, a non-GAAP
measure |
|
|
|
|
|
|
|
(Unaudited, in thousands, except
per unit data) |
|
|
|
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Natural gas, NGL and oil sales, as reported |
$ |
432,096 |
|
|
$ |
671,654 |
|
Derivative fair value income (loss), as reported |
|
233,175 |
|
|
|
(61,731 |
) |
Less non-cash fair value (gain) loss |
|
(133,246 |
) |
|
|
86,565 |
|
Brokered natural gas and marketing and other, as reported |
|
28,649 |
|
|
|
138,214 |
|
Less ARO settlement and other (gains) losses |
|
(260 |
) |
|
|
(71 |
) |
Cash revenue applicable to production |
|
560,414 |
|
|
|
834,631 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Direct operating, as reported |
|
32,035 |
|
|
|
33,227 |
|
Less direct operating stock-based compensation |
|
(450 |
) |
|
|
(591 |
) |
Transportation, gathering and compression, as reported |
|
284,765 |
|
|
|
302,655 |
|
Production and ad valorem taxes, as reported |
|
9,019 |
|
|
|
11,310 |
|
Brokered natural gas and marketing, as reported |
|
32,624 |
|
|
|
132,305 |
|
Less brokered natural gas and marketing
stock-basedcompensation |
|
(413 |
) |
|
|
(448 |
) |
General and administrative, as reported |
|
42,254 |
|
|
|
46,638 |
|
Less G&A stock-based compensation |
|
(8,029 |
) |
|
|
(9,638 |
) |
Less lawsuit settlements |
|
(815 |
) |
|
|
(706 |
) |
Interest expense, as reported |
|
47,518 |
|
|
|
51,537 |
|
Less amortization of deferred financing costs |
|
(2,061 |
) |
|
|
(1,788 |
) |
Cash expenses |
|
436,447 |
|
|
|
564,501 |
|
|
|
|
|
|
|
|
|
Cash margin, a non-GAAP
measure |
$ |
123,967 |
|
|
$ |
270,130 |
|
|
|
|
|
|
|
|
|
Mmcfe produced during period |
|
208,769 |
|
|
|
203,030 |
|
|
|
|
|
|
|
|
|
Cash margin per
mcfe |
$ |
0.59 |
|
|
$ |
1.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF INCOME
BEFORE INCOME TAXES TO CASH MARGIN |
|
|
|
|
|
|
|
(Unaudited, in thousands, except
per unit data) |
|
|
|
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Income before income
taxes, as reported |
$ |
195,193 |
|
|
$ |
7,107 |
|
Adjustments to reconcile
income before income taxes to cash
margin: |
|
|
|
|
|
|
|
ARO settlements and other (gains) losses |
|
(260 |
) |
|
|
(71 |
) |
Derivative fair value (income) loss |
|
(233,175 |
) |
|
|
61,731 |
|
Net cash receipts on derivative settlements |
|
99,929 |
|
|
|
24,834 |
|
Exploration expense |
|
6,747 |
|
|
|
7,723 |
|
Lawsuit settlements |
|
815 |
|
|
|
706 |
|
Termination costs |
|
1,595 |
|
|
|
— |
|
Deferred compensation plan |
|
(8,537 |
) |
|
|
3,581 |
|
Stock-based compensation (direct operating, brokered natural gasand
marketing, general and administrative and termination costs) |
|
9,222 |
|
|
|
11,165 |
|
Interest – amortization of deferred financing costs |
|
2,061 |
|
|
|
1,788 |
|
Depletion, depreciation and amortization |
|
102,986 |
|
|
|
138,718 |
|
(Gain) loss on sale of assets |
|
(122,099 |
) |
|
|
189 |
|
Gain on early extinguishment of debt |
|
(12,923 |
) |
|
|
— |
|
Impairment of proved property and other assets |
|
77,000 |
|
|
|
— |
|
Abandonment and impairment of unproved properties |
|
5,413 |
|
|
|
12,659 |
|
Cash margin, a non-GAAP
measure |
$ |
123,967 |
|
|
$ |
270,130 |
|
|
|
|
|
|
|
|
|
HEDGING POSITION AS OF March 31, 2020 –
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Daily Volume |
|
|
|
Hedge Price |
|
Gas
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr-Oct 2020 3-way Collar |
|
|
20,000 Mmbtu |
|
|
|
$1.75 / $2.00 x $2.50 |
|
2Q 2020 Swaps |
|
|
1,200,110 Mmbtu |
|
|
|
$2.55 |
|
3Q 2020 Swaps |
|
|
1,180,000 Mmbtu |
|
|
|
$2.57 |
|
4Q 2020 Swaps |
|
|
1,087,147 Mmbtu |
|
|
|
$2.60 |
|
|
|
|
|
|
|
|
|
|
2021 3-way Collars |
|
|
240,000 Mmbtu |
|
|
|
$1.99 / $2.31 x $2.60 |
|
2021 Swaps |
|
|
50,000 Mmbtu |
|
|
|
$2.62 |
|
|
|
|
|
|
|
|
|
|
Oil 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 2020 Swaps |
|
|
8,000 bbls |
|
|
|
$58.41 |
|
3Q 2020 Swaps |
|
|
8,000 bbls |
|
|
|
$58.19 |
|
4Q 2020 Swaps |
|
|
6,000 bbls |
|
|
|
$58.02 |
|
|
|
|
|
|
|
|
|
|
2021 Swaps |
|
|
1,000 bbls |
|
|
|
$55.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C3 Propane
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 2020 Swaps |
|
|
8,243 bbls |
|
|
|
$0.563/gallon |
|
|
|
|
|
|
|
|
|
|
nC4 Butane
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 2020 Swaps |
|
|
3,330 bbls |
|
|
|
$0.574/gallon |
|
3Q 2020 Swaps |
|
|
2,500 bbls |
|
|
|
$0.570/gallon |
|
|
|
|
|
|
|
|
|
|
iC4
Iso-Butane |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 2020 Swaps |
|
|
659 bbls |
|
|
|
$0.642/gallon |
|
|
|
|
|
|
|
|
|
|
C5 Natural
Gasoline |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 2020 Swaps |
|
|
495 bbls |
|
|
|
$1.208/gallon |
|
(1) |
Range sold
natural gas call swaptions of 120,000 Mmbtu/d for 2H2020 and
100,000 Mmbtu/d for calendar 2021 at average strike prices of $2.51
and $2.69 per Mmbtu, respectively. Range also sold 40,000
Mmbtu/d of 2Q20 $2.30 strike calls. |
(2) |
Range sold 500 bbls/d of 2Q20-3Q20 $59.00 strike WTI calls, and
call swaption of 3,000 bbls/d for calendar 2021 at an average
strike price of $56.50. |
(3) |
Propane price represents Mont Belvieu equivalent average of
international pricing less applicable spreads and/or freight. |
(4) |
Range sold nC4 butane calls of 2,000 bbls/d for 2Q20 and 2,500
bbls/d for 3Q20 at average strike prices of $0.5625 per gallon and
$0.57 per gallon, respectively. |
SEE WEBSITE FOR OTHER SUPPLEMENTAL
INFORMATION FOR THE PERIODSAND ADDITIONAL HEDGING
DETAILS
Range Resources (NYSE:RRC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Range Resources (NYSE:RRC)
Historical Stock Chart
From Apr 2023 to Apr 2024