Range Resources Proved Reserves Up 22% to 12.1 Tcfe, Dev Costs Down
Range Resources released details on their proved reserves last Friday. The company reports proved reserves are 12.1 trillion cubic feet equivalent (Tcfe), a 22% jump from 9.9 Tcfe at the end of 2015. Excluding acquisitions and divestitures, Range’s proved reserves were actually up 11%. Range CEO Jeff Ventura said the company replaced 292% of production from its drilling activities in 2016. They have driven down development costs to 34 cents per thousand cubic feet. If it costs an average of 87 cents to gather and get the gas to market (PA IFO estimate), that means it costs Range $1.21 to find, extract and get the gas to market. Range’s announcement was pretty amped-up on their newest purchase of acreage in Louisiana. However, in 2016, almost all of the added proved reserves came in the Marcellus–1,315 out of 1,394 billion cubic feet (or 94%)…
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A kerfuffle erupted yesterday when Chapter IV Investors, a Charlotte, NC-based investment firm with investments in EQT, Range Resources and Antero Resources, announced it had sent a letter to EQT urging the company to consider merging with either Range Resources or Antero Resources. Chapter IV, which is essentially two big-money investors (W. Barnes Hauptfuhrer, Managing Partner and Portfolio Manager, and Ryan J. Jack, Partner), does not own enough stock in any of the companies (less than 1% in each) to throw its weight around like a corporate raider. Rather, it appears to be two investors attempting to grab the attention of these companies and their shareholders by issuing a press release (full copy below) with a plan they say would create a new Marcellus/Utica driller worth more than $25 billion. Obviously the value of investments for Chapter IV would go up under such a scenario–so there is self-interest at work here. However, we don’t detect any kind of bullying on the part of Chapter IV, like that of a raider Carl Icahn (successful takeover of Chesapeake Energy & Cheniere Energy) or Keith “Mini-Me” Meister (unsuccessful attempt to takeover Williams). Rather, it appears to be a couple of investors who believe there is an honest and good case for a combination of EQT with another company, and were willing to spend $500 on a press release to make their case. Are they right?…
In September, MDN brought you research on 10 of the largest Marcellus/Utica drillers that have “hedged” their 2017 production (see
For some time we’ve followed the story of Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see
You may recall that for some time we’ve been following the back and forth between Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see
We can’t say enough good things about Rusty Braziel and 
Something noteworthy is happening in southwest Pennsylvania. Landowners and pro-gas supporters are turning out at local hearings to support more drilling. Case in point: Range Resources had applied for a permit to build a drill pad near a local elementary school in Mt. Pleasant (Westmoreland County), PA. Moms Clean Air Force and other anti-drillers turned out to oppose the plan. A local town board meeting was packed to capacity. However, a majority of those packing the meeting were pro-gas and wore t-shirts with “Land Owners United” printed on them. Cool! About time our side began to turn up for these meetings to support the industry…
As MDN previously reported, Range Resources, the very first driller in the Marcellus Shale (in 2004) and one of the largest Marcellus drillers, has decided to take advantage of the down market and branch out into another shale play (see
There’s certainly more than one way to make money on fracking in the Marcellus/Utica. Billionaire hedge fund manager David Tepper (Appaloosa Management) has found such a way. Tepper knows a good company, or four, when he sees them. In the fourth quarter of 2015, when Marcellus/Utica company stocks were at one of their lowest points, Tepper loaded up, buying stock in four leading northeast drillers. Half a year later he turned around and sold that stock, for a 100%+ return on his investment. He doubled his money. Smart man. Which drillers’ stocks did Tepper buy and then sell?…
Investment firm SailingStone Capital Partners recently purchased enough stock that the firm now owns 11% of Range Resources. That’s more than enough to exert great power and control. And so they have. That 11% stake in the company has “encouraged” (forced?) Range to grant SailingStone a seat on the board of directors. We were, at first, concerned. Is this yet another corporate raider out to force a company (Range) to layoff employees and sell assets in a bid to force the stock price higher so they can dump it and make a big profit? We don’t think so. We find no evidence that SailingStone is anything other than an investor with a lot of money who likes what they see in Range. Below is the official announcement, followed by commentary on SailingStone’s motivation for buying up Range stock…
The answer to the question posed in the headline of this article, asking where drillers are starting to drill again now that they are starting to drill again, is–it depends on the driller. There is no particular geography in the Marcellus/Utica, nor is there a preference for a given layer (Marcellus or Utica) across the major players. Each of them is following their own strategy. Here’s a rundown for several major players and their strategies…