Ads say Range Resources is a responsible driller

Selling an idea

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Companies drilling for gas in the Marcellus Shale have encountered a string of controversies, including lawsuits over royalty payments to landowners, charges of damaging the environment and political wrangling over whether or not to tax the gas they pull out of the ground, and if so, by how much.

In the midst of the hubbub, most natural gas companies have seemed content to keep a low public profile, letting the Marcellus Shale Coalition, an industry group formed in 2008, speak on behalf of them.

They tout their successes to Wall Street, but not to Main Street.

Then there's Range Resources.

In recent weeks, the Fort Worth, Texas-based company has run advertisements on both radio and TV, and posted billboards advertising a new website, www.myrangeresources.com.

The ads are selling the idea that drilling in the Marcellus Shale is good, and Range is doing it right.

The videos on the website show everyday people describing how they have benefited from their relationship with the company.

In one, Ron and Bev Romanetti, a middle-age couple who have leased land to Range, credit such leases with improving lives of farmers.

"All the farmers around that have got gas wells are doing a lot better now," Mr. Romanetti says, and Mrs. Romanetti adds, "Natural gas has been ... a godsend to this area."

In another video, business owner Paul Battista says, "In the last two years, probably 60 percent of our business is natural gas." Mr. Battista's company provides work clothes, hardhats and tools for Range's workers, and he says that in Range, "I've got a customer that appreciates what we do."

So, what led to this campaign?

"I think a lot of people don't know much about our industry or about Range Resources," said Ray Walker, vice president of Range's Marcellus Shale unit.

"The main message that we want to send is that we're committed to being the very best that we can be," he said. "We want to be accountable, transparent and accessible to people."

The videos, produced by Mt. Lebanon media firm Big Picture Communications and Downtown's Animal Inc., were unscripted and purposefully avoided using company spokespeople.

"The campaign is not about Range personnel or Range employees," Mr. Walker said. "It's more about what it is that we do as a company."

Blake Lewis, CEO of Lewis Public Relations in Dallas and a member of the Public Relations Society of America's national board of directors, gave the Range website high marks.

"The whole idea of being direct to the consumer, in fairly easy to understand language and visualization, using real people ... those are all wise decisions," he said.

"People are really tired of combativeness. What is refreshing is, they've not said, 'Everybody else is doing it wrong and we're doing it right.' "

But he also cautioned that "you can't hide behind a website" without other efforts to engage the community, such as town hall meetings.

"It's really important to be acting on true knowledge" of the public's concerns, he said.

Range spokesman Matt Pitzarella said the website grew out of more than 1,000 outreach events, ranging from living-room chats to formal large-group presentations.

Even so, the company is far from immune to challenge.

In July, Range settled a class-action lawsuit with about 2,000 Pennsylvania landowners who alleged that the company had improperly calculated the royalty payments due them for natural gas extracted from their land.

The company denied wrongdoing, while agreeing to pay about $28 million to settle the claim.

Range Resources started in 1976 as Lomak Petroleum, a Hartville, Ohio-based company drilling wells in east Ohio.

In 1992, the company moved to Fort Worth, and in 1998 merged with Domain Energy Corp. to form Range Resources [Ticker: RRC].

In 2004, Range bought out FirstEnergy's stake in a joint venture that the two companies had formed earlier, Great Lakes Energy Partners LLC, and renamed it Range Resources Appalachia LLC, which drilled the first horizontal well that same year to tap the natural gas reserves in the Marcellus Shale.

Now the company controls the gas underlying 1.3 million Marcellus Shale acres, including more than 400,000 in southwestern Pennsylvania.

Range now employs more people here than in Forth Worth, Mr. Pitzarella said, and announced plans to expand locally, building a new regional headquarters to accommodate a doubling of its work force from 250 to 500 over the next two years.

By selling off more than $800 million in noncore assets since 2004, and increasing the cost-effectiveness of its drilling, especially in the Marcellus, Range has grown its profits even as the price of natural gas plunged from record highs reached in 2008.

In the second quarter, the company posted profits of $9 million, or 6 cents per share, on revenues of $224.8 million, compared to a loss of $39.9 million, or 26 cents per share, on revenues of $180.4 million a year ago.

The company's financial future depends in part on what happens with a tax that was supposed to be a part of this year's state budget, but that has not been enacted.

The House has passed a bill to charge producers a severance tax of 39 cents for each thousand cubic feet of gas that they extract from the Marcellus, but the Senate appears unlikely to be able to reconcile with the House bill in this session.

Some industry supporters, such as the Harrisburg-based Commonwealth Foundation, have opposed a severance tax.

Range has come out in favor of a "reasonable and competitive" severance tax.


Elwin Green: 412-263-1969.


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