Range Resources Report Record Natural Gas Production

Stephanie Ritenbaugh

Range Resources produced a record amount of natural gas and natural gas liquids during the third quarter, driven primarily by its activity in the Marcellus Shale.

The Fort Worth-based driller produced a record average of 1.2 billion cubic feet per day of natural gas equivalent (Bcfe/d) during the last three months, a 26 percent increase compared to the same period last year, the company reported in its quarterly earnings.

Overall, Range noted that drilling technology is continuing to evolve and new techniques are being developed to drill wells more efficiently. In addition, the company is advancing its drilling program in the Utica/Point Pleasant formation, which lies beneath the Marcellus, in southwestern Pennsylvania. The results of the test well in Washington County, drilled from an existing Marcellus well pad, are expected to be available in late December.

“We’re still in the third or fourth inning here,” Jeff Ventura, president and CEO, told analysts Thursday morning.

The company said its total resource potential, which includes its acreage in the Marcellus, Southern Appalachia and the Midcontinent, could be 65 trillion cubic feet of natural gas equivalent to 86 Tcfe. That figure doesn’t include the Utica/Point Pleasant formation.

Getting the gas and natural gas liquids out of the region to other markets is another issue. Rapid production growth in the Marcellus and a dearth of infrastructure has depressed regional prices. Drillers in the northeast have been awaiting pipeline projects to go into service.

“We believe that as midstream projects come on line in 2015 and beyond, designed to move Marcellus gas to new markets with increasing levels of demand, the current supply/demand imbalance in the Appalachian basin will improve,” Mr. Ventura said.

“Range is well-positioned to continue our annual 20 percent to 25 percent production growth to 3 Bcfe/d and beyond,” he said.

Executives quoted forecasts showing that between mid-2015 and 2018, pipeline companies are expected to add 34 Bcf/d of midstream capacity. And between 2015 and 2020, demand for natural gas is expected to increase by 15 Bcf/d from several sources: exports of liquefied natural gas, exports to Mexico, the transportation and petrochemical sectors and power generators switching from coal to natural gas

“Gas is superior to coal, and power generators will continue to switch,” Mr. Ventura said. .

The company reported net income of $146 million, or 86 cents per share, during the third quarter, up from $19 million, or 12 cents per share, a year ago.