Range 2Q18: Pipeline Outages Hurt; Ponders Sale of LA Acreage

Range Resources, the very first company to sink a Marcellus well back in 2004, held their second quarter 2018 update conference call with analysts yesterday, after publishing the official 2Q18 update on Monday. On the conference call, Range’s senior VP of operations Dennis Degner admitted that two different pipeline outages in 2Q18 hurt. The Leach XPress was shut down from June 7 to July 15 following an explosion. That resulted in Range having to find “in-basin” markets for 300 million cubic feet per day (MMcf/d) of natural gas. They did it, but it means they didn’t get as much money for the gas as they would have. The second outage was the Mariner East 1 pipeline, which flows 40,000 barrels per day of Range’s NGLs (ethane and propane) to Philadelphia for export. ME1 was down for nearly two months in 2Q18 when a portion of the pipeline was exposed from a sinkhole developing due to nearby Mariner East 2 drilling activity. Again, they found other markets at a lower cost. Also interesting were comments by Range CEO Jeff Ventura who said the company is looking to sell some of its Marcellus assets in northeast and southwest PA this year. Ventura said later this year/early next year they will make a decision about possibly selling their Louisiana assets, which have been underperforming. It was only two years ago that Range paid $4.4 billion for those assets (see Range Resources Buys Louisiana Driller in Deal Worth $4.4B). Marcellus/Utica production hit 1.876 billion cubit feet per day (Bcf/d) in 2Q18…

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