Range Announces 2018 Proved Reserves

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FORT WORTH, Texas, Feb. 11, 2019 (GLOBE NEWSWIRE) -- announced today that proved reserves at December 31, 2018 increased by 18% from the prior-year to 18.1 Tcfe.    

Commenting on Range’s 2018 proved reserves, Jeff Ventura, Range’s CEO, said, “Range had another solid year of reserve additions, with drill-bit finding costs of only $0.22 per mcfe.  The quality of reserves was highlighted by another consecutive year of positive performance revisions, which were a result of extending laterals and improvements from optimized targeting and completions. Future development costs for proven undeveloped locations are expected to be approximately $0.40 per mcfe, which is outstanding and underpins a strong unhedged recycle ratio of over 2.5x at current strip pricing.  Range added a record 3.1 Tcfe to proved reserves from extensions, discoveries and additions, driven by our large inventory of low-risk, high-return projects in the Marcellus Shale.”

“Similar to previous years, Range’s strong reserve growth was accomplished while having less than one-third of our offset proven undeveloped locations currently recorded for each horizontal producing well.  We believe this demonstrates our ability to grow SEC reserves in the future as capital is allocated to offset locations. Our economic resilience is further demonstrated in the year-end PVreserve value of $9.9 billion using futures strip pricing from year-end, which equates to approximately $24 per share, net of approximately $3.8 billion of debt at year end. Going forward, Range is committed to translating well-level returns from our high-quality asset base into corporate-level returns, including a free cash flow yield that is competitive not only within energy, but across the broader market.”

During 2018, Range added 3.1 Tcfe of proved reserves through the drill-bit, driven by 3.0 Tcfe from the Company’s Marcellus development.  The “extensions, discoveries, and additions” amount excludes 154 Bcfe of Marcellus reserves associated with undrilled locations that now have increased recovery estimates as a result of longer laterals and improved lateral targeting and completion design.  This improved recovery estimate is included in the “revision” category.  The average lateral length for proved undeveloped locations was approximately 9,300 feet in the 2018 report with newly added Marcellus locations incorporating an average lateral length of approximately 10,200 feet. 

Field level performance increased reserves by 945 Bcfe due to continued improvement in the well performance of existing Marcellus producing wells and 611 Bcfe of reserves associated with proved undeveloped locations which have re-entered the Company’s five-year drilling program.  As future development plans are continually optimized, some previously planned wells are not being drilled within five years from their original booking date.  Accordingly, Range removed 379 Bcfe of proved undeveloped reserves that now fall outside the SEC mandated five-year development window.  The Company expects these proved undeveloped reserves to be added back in future years as field development continues, similar to the 611 Bcfe added back in this year’s reserves.  The higher SEC price for 2018 as compared to 2017 resulted in a nominal upward pricing revision in proved reserve volumes of 11 Bcfe.  The Company sold approximately 262 Bcfe of reserves during the year, primarily associated with the Washington County ORRI announced in October 2018 as well as the sale of its remaining properties in the northern Midcontinent area.  The resulting corporate proved undeveloped development cost is estimated to be $0.40 per mcfe, based on 2018 well costs, estimated recoveries and lateral lengths, assuming no future efficiencies. 

Year-end 2018 proved reserves by volume were 67% natural gas, 30% natural gas liquids and 3% crude oil and condensate.  Proved developed reserves represent 54% of the Company’s reserves.  The Company’s Appalachia reserves were audited by Wright & Company, Inc. and North Louisiana reserves were audited by Netherland, Sewell & Associates, Inc.  The audited reserve value estimates for each area were within 4% of aggregate estimates prepared by Range’s petroleum engineering staff. 

Certain selected financial information in this release is unaudited.  Audited financial results will be provided in our Annual Report on Form 10-K for the year ended December 31, 2018, which we plan to file with the Securities and Exchange Commission (SEC) on February 26, 2019.

Finding and development (F&D) cost per unit is a non-GAAP metric used in the exploration and production industry by companies, investors and analysts. The calculations presented by the Company are based on estimated and unaudited costs incurred excluding asset retirement obligations, gas gathering facilities and non-cash stock-based compensation and divided by proved reserve additions (extensions, discoveries and additions shown in the table) adjusted for the changes in proved reserves for performance, price and deferral revisions or excluding certain costs such as acreage and acquisitions as stated in each instance in the release. Drill-bit development cost per mcfe is based on estimated and unaudited drilling, development and exploration costs incurred divided by the reserve extensions, discoveries and additions with the inclusion of any revisions as specified in the stated measurement.  These calculations do not include the future development costs required for the development of proved undeveloped reserves. The SEC method of computing finding costs contains additional cost components and results in a higher number.  A reconciliation of the two methods will be shown on the Company’s website at after filing its 2018 Form 10-K.  

F&D cost per unit as a statistical indicator can have limitations, including its predictive and comparative value. As an annual measure, F&D cost per unit does not consider the cost or timing of future production of new reserves, and therefore may not be an accurate predictor of future value creation. In addition, it may not be comparable to similarly titled measurements used by other companies.

Year-end pre-tax discounted present value is considered a non-GAAP financial measure as defined by the SEC. We believe that the presentation of pre-tax discounted present value is relevant and useful to our investors because it presents the discounted future net cash flows attributable to our proved reserves prior to taking into account future corporate income taxes and our current tax structure. We further believe investors and creditors use pre-tax discounted present value as a basis for comparison of the relative size and value of our reserves as compared with other companies. Range's pre-tax discounted present value as of December 31, 2018 may be reconciled to the GAAP financial measure of its standardized measure of discounted future net cash flows as of December 31, 2018 by reducing Range's pre-tax discounted present value by the discounted future income taxes associated with such reserves. This reconciliation will be included in the Company’s 2018 Form 10-K.

Laith Sando, Vice President – Investor Relations817-869-4267

Michael Freeman, Director – Investor Relations & Hedging817-869-4267

John Durham, Senior Financial Analyst817-869-1538

Mike Mackin, Director of External Affairs724-743-6776



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Globe Newswire: 11:00 GMT Monday 11th February 2019

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