Range Resources sets its sights on the 'super rich'
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Like many of its peers in the gas drilling industry, Range Resources plans to focus this year on drilling in parts of Pennsylvania and Ohio's shale that house lucrative natural gas liquids and oil reserves, the Fort Worth, Texas-based company announced Wednesday.
The company even has a name for the bountiful region: the "super-rich area."
That means super-rich in the volume of natural gas liquids found in the region's shale rock and super-rich in its capacity to make Range money at a time of record-low gas prices. And Range owns 125,000 acres of it.
Some drilling companies have moved rigs or scaled back production altogether in regions where "dry" gas is extracted without liquids like ethane.
But unlike other companies, Range Resources doesn't have to worry about leases in the dry gas region expiring and forcing costly renegotiation when it comes time to drill.
That's because most of its dry gas acreage throughout southwestern Pennsylvania is held by production, meaning landowners are locked into current agreements because development has already begun on Marcellus Shale wells or because of pre-existing shallow wells on their properties.
The firm's 2012 capital expenditure budget of $1.6 billion allocates $1.3 billion to drilling operations, 75 percent of which will target the liquids- and oil-rich portions of the Marcellus Shale as well as opportunities in Mississippi.
The other quarter of the budget will focus on dry gas regions in northeast Pennsylvania.
Range reported net income for 2011 of $58 million, or 36 cents per diluted share, up from the $239 million, or $1.52 per share, in losses seen the year before. Revenues for 2011 were $1.2 billion, up 28 percent.
The 2010 loss included property impairment fees related to the sale of the company's Barnett Shale assets in Texas. That sale closed in 2011, buoying net income with its $950 million price tag and solidifying the Marcellus play as the company's top priority.
Range's portfolio now concentrates almost entirely on Pennsylvania and the Marcellus region.
Range's Marcellus headquarters in Canonsburg employs about half the company's workforce, but the driller said it has no plans to move its overall headquarters from Texas.
First Published February 23, 2012 12:00 am