Range Resources Cuts 2015 Budget 46%, Focus Continues on Marcellus
Yesterday Range Resources published a recap of the company’s performance in 2014 along with comments and guidance on 2015. In 2014, Range production averaged 1.16 billion cubic feet equivalent per day (Bcfe/d) which was 32% liquids. That’s a 24% increase from 2013 levels. Range’s proved reserves rose 26% to 10.3 trillion cubic feet equivalent by the end of 2014. Range expects 2015 output to reach 1.3 Bcfe/d. Even with an expected 20% increase in production for 2015, Range, like most other drillers is cutting way back. Their 2015 capital budget is being slashed 46% to $870 million (down from $1.3 billion in 2014). The good news is that 95% of the 2015 budget will be spent right here–drilling in the Marcellus Shale…
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Two weeks ago the hapless newly elected governor of Pennsylvania, Tom Wolf, introduced a new 7.5% severance tax plan to soak the Marcellus Shale industry in his state (see 
David Fessler is energy and infrastructure strategist (i.e. stock analyst/researcher) with The Oxford Club–a publisher based in Baltimore, Maryland that publishes the Oxford Resource Explorer, among other financial publications. Fessler spends his days immersed in the energy industry and in the stocks of companies in that industry. Fessler and The Oxford Club have produced a special report called “The Oil Company Death List” which is a list of 19 publicly-traded oil and gas companies that, according to a formula worked out by Fessler, will “die soon.” That is, they’ll go bankrupt if they don’t sell themselves or otherwise sell off major assets. Why? They’re “swimming in debt” and way over leveraged with “ugly balance sheets.” Fessler’s simple formula is all about a company’s debt ratio. When a company’s debts reach 4 times or higher its earnings (EBITDA), that’s a huge red flag. Below we have the list of 19 on the “death list” along with a copy of Fessler’s full report (describing his methodology). The interesting/troubling aspect is that 8 of the 19 are Marcellus/Utica operators–one of which is #1 for highest debt-to-earnings ratios. Some companies in the list surprised us–others did not. Is your favorite Marcellus/Utica driller in the list?…
Along with acquiring Access Midstream (formerly Chesapeake Midstream), Williams has just acquired a brand new lawsuit. Two Bradford County, PA law firms along with a New Jersey law firm on Tuesday filed a RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit on behalf of 90 landowners in Bradford County against Chesapeake Energy and Williams Partners (because Williams is now the owner of what was Access Midstream) claiming Chessy and Williams/Access conspired to defraud landowners of royalty money by deducting post-production expenses they had no right to deduct…