DUG East Pittsburgh. Jeff Ventura Chairman, President & CEO

Transcription

1 DUG East Pittsburgh Jeff Ventura Chairman, President & CEO June 24,

2 Forward-Looking Statements Certain statements and information in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of The words anticipate, believe, estimate, expect, forecast, plan, predict, target, project, could, should, would or similar words are intended to identify forward-looking statements, which are generally not historical in nature. Statements concerning well drilling and completion costs assume a development mode of operation; additionally, estimates of future capital expenditures, production volumes, reserve volumes, reserve values, resource potential, resource potential including future ethane extraction, number of development and exploration projects, finding costs, operating costs, overhead costs, cash flow, NPV10, EUR and earnings are forward-looking statements. Our forward looking statements, including those listed in the previous sentence are based on our assumptions concerning a number of unknown future factors including commodity prices, recompletion and drilling results, lease operating expenses, administrative expenses, interest expense, financing costs, and other costs and estimates we believe are reasonable based on information currently available to us; however, our assumptions and the Company s future performance are both subject to a wide range of risks including, production variance from expectations, the volatility of oil and gas prices, the results of our hedging transactions, the need to develop and replace reserves, the costs and results of drilling and operations, the substantial capital expenditures required to fund operations, exploration risks, competition, our ability to implement our business strategy, the timing of production, mechanical and other inherent risks associated with oil and gas production, weather, the availability of drilling equipment, changes in interest rates, access to capital, litigation, uncertainties about reserve estimates, environmental risks and regulatory changes, and there is no assurance that our projected results, goals and financial projections can or will be met. This presentation includes certain non-gaap financial measures. Reconciliation and calculation schedules for the non-gaap financial measures can be found on our website at 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 the Company s probable and possible reserves in its filings with the SEC. Range uses certain broader terms such as "resource potential," or "unproved resource potential, "upside" and EURs per well 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 being actually 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, unrisked 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 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. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. Investors are urged to consider closely the disclosure in our most recent Annual Report on Form 10-K, available from our website at or by written request to 100 Throckmorton Street, Suite 1200, Fort Worth, Texas You can also obtain the Form 10-K by calling the SEC at SEC

3 Large Scale Growth with Low Cost and Low Risk Focused on PER SHARE GROWTH of production and reserves at topquartile or better cost structure Largest acreage position in core of Marcellus, Upper Devonian and Utica 3

4 Range: Low-Cost, Large Scale Marcellus Shale Only Source: Wood Mackenzie Company Positions Total Reserves (tcfe) Breakeven (US$/mcf) Range Rex Cabot EQT Antero Resources Chesapeake Statoil Rice Energy Seneca Reliance Enerplus Mitsui Anadarko Chevron Southwestern Carrizo EOG Chief Noble CONSOL WPX Magnum Hunter Talisman PDC Ultra Shell ExxonMobil BG EXCO

5 SW/NE Pennsylvania Stacked Pays Wet Acreage Dry Acreage (1) Total Net Acreage Upper Devonian 330, , ,000 Marcellus 330, , ,000 Utica/Point Pleasant - 400, , , ,000 1,565,000 Stacked pays allow for multiple development opportunities at 1,000 foot spacing between wells and later with 500 foot spacing prospective on most acreage (1) Excludes Northwest PA - 285,000 net acres, largely HBP 5

6 Mcfe/share Mcfe/share Range is Focused on Per Share Growth, on a Debt-Adjusted Basis Production/share debt adjusted Reserves/share debt adjusted Increase of 27% 2014 Increase of 29% Production/share = annual production divided by debt-adjusted year-end diluted shares outstanding Reserves/share = year-end proven reserves divided by debt-adjusted year-end diluted shares outstanding 6

7 $/mcfe Driving Down Unit Costs $4.50 $4.00 $3.50 $3.00 Transport & Gathering Interest (2) G&A Prod. taxes (2) LOE (1) Reserve Rep $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 $ E (1) Three-year average of drill bit F&D costs, excluding acreage (2) Excludes non-cash stock compensation (3) Includes additional NGL & natural gas firm transport agreements & propane transport cost previously netted against NGL revenue. Incremental natural gas & NGL revenue will more than offset the 2015 increase in transport expense 7

8 Sustained Growth with Improving Capital Efficiency Production (mmcfepd) $ Capex per Incremental mcfe Production Growth achieved despite reducing capital, demonstrating improved efficiency 1,500 $30 1,250 $25 1,000 $ $ $ $5 0 $- Production (mmcfepd) $ Capex per Incremental mcfe Production * 2015 estimated production assuming announced target of 20% production growth and capital budget of $870 million 8

9 Portfolio within a Portfolio 2015 Well Economics SW Super-Rich SW Wet SW Dry NE Dry EUR 12.9 Bcfe 1,169 Mbbls & 5.9 Bcf 17.6 Bcfe 1,501 Mbbls & 8.6 Bcf 17.1 Bcf 15.2 Bcf EUR/1,000 ft lateral 2.40 Bcfe 2.95 Bcfe 2.52 Bcf 2.67 Bcf EUR/stage 477 Mmcfe 586 Mmcfe 504 Mmcf 542 Mmcf Well Cost $5.9 MM $5.9 MM $6.0 MM $4.9 MM Stages Lateral Length 5,367 ft. 5,955 ft. 6,798 ft. 5,663 ft. IRR Strip (as of 12/31/2014) 34% 39% 49% 63% IRR $ % 48% 80% 147% 9

10 Range s First Washington County Utica Well 5,420 ft. lateral, with 32 stages Initial testing and post completions testing suggests pressure gradient of up to 0.88 psi/ft. 7 days flow test, record 24 hour IP of 59 Mmcf/day Equates to 10.9 Mmcf/day per 1,000 ft. of lateral Brought on line at 20 Mmcf/day under designed conditions 10

11 Utica/Point Pleasant, Great First Test Well Operator State County IP (Mmcf/d) Lateral Length (Ft) IP/1,000 LL Claysville Sportsman s Club 11H Range Resources PA Washington , Stewart Winland Unit 1300U Magnum Hunter WV Tyler , Bigfoot 9H Rice OH Belmont , Stadler Unit A 3UH Magnum Hunter OH Monroe , Irons 1-4H Gulfport OH Belmont , Shroyer 2H Eclipse OH Monroe , Pribble 6HU Stone WV Wetzel , Simms 5H Gastar WV Marshall , Conner 6H Chevron WV Marshall , Shroyer 4H Eclipse OH Monroe , Tippens 6H Eclipse OH Monroe , Porterfield 1H-7H Hess OH Belmont , Hubbard BRK 3H Chesapeake WV Brook ,

12 Additional Upside Utica/Point Pleasant OH PA 2 wells planned in ,000 net acres in SW PA prospective Core analysis and petrographic analysis show RRC Claysville well has high GIP Range has 20% to 40% more GIP than best areas in eastern Ohio WV Note: Townships where Range holds ~3,000 or more acres are shown outlined above (As of 12/31/2014) 12

13 RRC Well, Excellent Reservoir Characteristics Drilled in structurally quiet area defined by 3-D seismic coverage 13

14 Matrix Permeability, md Range Well, Excellent Porosity & Permeability 1E-01 1E-02 1E-03 1E-04 1E-05 1E-06 1E-07 1E-08 1E-09 1E-10 1E-11 1E-12 1E-13 1E Samples BASIC ROCK PROPERTIES (GRI Method) Matrix Permeability suppressed by oil saturation y = 7E-10x Crushed Sample (20/35 Mesh) Effective Permeability All JIP Wells Claysville Sportsman's 11H (Utica) Claysville Sportsman's 11H (Point Pleasant) Claysville Sportsman's 11H (Trenton) Total (Interconnected) Porosity, percent Mapping indicates highest average porosity trend extends into SW PA. Core analysis shows in top tier of distribution. 14

15 Regional View Point Pleasant Total Gas in Place Utica to Trenton Utica Point Pleasant GAS IN PLACE ANALYSIS: Claysville Sportsman 11H Bulk Density (g/cc) Gas Content (scf/ton) GIP (scf/acre-ft) GIP (BCF/section) Free Gas , Sorbed Gas , Total Gas in Place , GAS IN PLACE ANALYSIS: Claysville Sportsman 11H Bulk Density (g/cc) Gas Content (scf/ton) GIP (scf/acre-ft) GIP (BCF/section) Free Gas , Sorbed Gas , Total Gas in Place , GAS IN PLACE ANALYSIS: Claysville Sportsman 11H Bulk Density (g/cc) Gas Content (scf/ton) GIP (scf/acre-ft) GIP (BCF/section) Free Gas ,177, Sorbed Gas , Total Gas in Place ,310, Regional mapping shows high GIP in SW PA. 15

16 Cross Sections Regional Facies Change Major Play Driver Optimal production rates in play are defined by presence of high porosity/high TOC Point Pleasant (green white) overlain by tight, non organic Utica (blue.) These in turn correspond to areas of highest pressure gradient and optimal fracture containment. Note relation of IP/1000 to facies change. 16

17 Gas In Place (GIP) Point Pleasant Interval Outlined portion represents the area of the highest pressure gradients in the Point Pleasant Note: Townships where Range holds ~3,000 or more acres (as of 12/31/2014), and estimated as prospective, are outlined green. GIP Range estimates. 17

18 Gas In Place (GIP) Marcellus Shale GIP is a function of pressure, temperature, thermal maturity, porosity, hydrocarbon saturation and net thickness Two core areas have been developed in the Marcellus Condensate and NGLs are in gaseous form in the reservoir Note: Townships where Range holds ~3,000 or more acres (as of 12/31/2014), and estimated as prospective, are outlined green. GIP Range estimates. 18

19 Gas In Place (GIP) Upper Devonian Shale The greatest GIP in the Upper Devonian is found in SW PA A significant portion of the GIP in the Upper Devonian is located in the wet gas window Note: Townships where Range holds ~3,000 or more acres (as of 12/31/2014), and estimated as prospective, are outlined green. GIP Range estimates. 19

20 Gas In Place (GIP) Point Pleasant/Marcellus/Upper Devonian Note: Townships where Range holds ~3,000 or more acres (as of 12/31/2014), and estimated as prospective, are outlined green. GIP Range estimates. 20

21 Solid Financial Position, Disciplined Financial Approach Strong, Simple Balance Sheet Bank debt, long-term bonds and common stock No near term maturities, first bond maturity in 2021, after the expected call of 2020 s. Bank credit facility matures in 2019 Recent senior notes offering met with strong investor demand, resulting in the lowest coupon achieved by Range of 4.875% Liquidity of $1.7 billion under commitment amount; $2.7 billion under the approved borrowing base (pro forma for senior notes offering) Solid Hedge Position Range hedges a significant portion of projected upcoming 12 months of production 2015 Gas is over 85% hedged at an average floor of $ Oil is over 85% hedged at a floor of $ NGLs are over 50% hedged 21

22 Solid Financial Position, Disciplined Financial Approach Debt Metrics Debt trades at or near investment grade Annual borrowing base unanimously approved Debt Covenants with ample flexibility: EBITDAX/Interest expense - minimum of 2.5x PV9 proved reserves value to debt - minimum of 1.5x Well Structured Bank Credit Facility 29 banks with no bank holding more than 6% of total Commitment amount of $2.0 billion; current borrowing base of $3.0 billion 22

23 Two Key Marketing Events Mariner East Range has 20,000 barrels per day of ethane and 20,000 barrels per day of propane transportation to Marcus Hook Access (80%) to 1 million barrels of propane cavern storage at Marcus Hook Net increase in cash flow anticipated from Mariner East, Mariner West and ATEX of ~$90 million per year, when all are fully operational Starts during 3Q 2015 Spectra - Uniontown to Gas City Pipeline Moves ~200 Mmcf/day of Range gas production as anchor shipper from local Appalachia M2 to Midwest markets Under current strip prices this project is expected to capture an uplift of $1.00 per Mmbtu in 4Q Starts 4Q

24 Thank You 24