RANGE RESOURCES CORPORATION reports that proved reserves at December 31, 2018 increased by 18% from the prior-year to 18.1 Tcfe.    

Highlights    

• Year-end 2018 PV10 value of reserves using future strip prices was $9.9 billion
• Year-end 2018 SEC PV10 value of proved reserves was $13.2 billion, up $5.1 billion from prior year
• Proved reserves increased by 2.8 Tcfe, or 18%
• Reserve extensions, discoveries and additions were 3.1 Tcfe
• Proved developed reserves increased 1.4 Tcfe, or 17%
• Drill-bit finding cost of $0.22 per mcfe, including performance revisions
• Future development costs for proved undeveloped reserves estimated to be $0.40 per mcfe
• Unhedged recycle ratio over 2.5x based on future development costs of $0.40 per mcfe

Commenting on Range’s 2018 proved reserves, Jeff Ventura, Range’s CEO, said, 
“Range had another solid year of reserve additions, with drill-bit finding costs of only $0.22 per mcfe. The quality of reserves was highlighted by another consecutive year of positive performance revisions, which were a result of extending laterals and improvements from optimized targeting and completions. Future development costs for proven undeveloped locations are expected to be approximately $0.40 per mcfe, which is outstanding and underpins a strong unhedged recycle ratio of over 2.5x at current strip pricing. Range added a record 3.1 Tcfe to proved reserves from extensions, discoveries and additions, driven by our large inventory of low-risk, high-return projects in the Marcellus Shale.”

“Similar to previous years, Range’s strong reserve growth was accomplished while having less than one-third of our offset proven undeveloped locations currently recorded for each horizontal producing well.  We believe this demonstrates our ability to grow SEC reserves in the future as capital is allocated to offset locations. Our economic resilience is further demonstrated in the year-end PV10 reserve value of $9.9 billion using futures strip pricing from year-end, which equates to approximately $24 per share, net of approximately $3.8 billion of debt at year end. Going forward, Range is committed to translating well-level returns from our high-quality asset base into corporate-level returns, including a free cash flow yield that is competitive not only within energy, but across the broader market.”

SUMMARY OF CHANGES IN PROVED RESERVES (in Bcfe) 

During 2018, Range added 3.1 Tcfe of proved reserves through the drill-bit, driven by 3.0 Tcfe from the Company’s Marcellus development. The “extensions, discoveries, and additions” amount excludes 154 Bcfe of Marcellus reserves associated with undrilled locations that now have increased recovery estimates as a result of longer laterals and improved lateral targeting and completion design. This improved recovery estimate is included in the “revision” category. The average lateral length for proved undeveloped locations was approximately 9,300 feet in the 2018 report with newly added Marcellus locations incorporating an average lateral length of approximately 10,200 feet. 

Field level performance increased reserves by 945 Bcfe due to continued improvement in the well performance of existing Marcellus producing wells and 611 Bcfe of reserves associated with proved undeveloped locations which have re-entered the Company’s five-year drilling program. As future development plans are continually optimized, some previously planned wells are not being drilled within five years from their original booking date. Accordingly, Range removed 379 Bcfe of proved undeveloped reserves that now fall outside the SEC mandated five-year development window. The Company expects these proved undeveloped reserves to be added back in future years as field development continues, similar to the 611 Bcfe added back in this year’s reserves. The higher SEC price for 2018 as compared to 2017 resulted in a nominal upward pricing revision in proved reserve volumes of 11 Bcfe.  The Company sold approximately 262 Bcfe of reserves during the year, primarily associated with the Washington County ORRI announced in October 2018 as well as the sale of its remaining properties in the northern Midcontinent area. The resulting corporate proved undeveloped development cost is estimated to be $0.40 per mcfe, based on 2018 well costs, estimated recoveries and lateral lengths, assuming no future efficiencies. 

Year-end 2018 proved reserves by volume were 67% natural gas, 30% natural gas liquids and 3% crude oil and condensate. Proved developed reserves represent 54% of the Company’s reserves. The Company’s Appalachia reserves were audited by Wright & Company, Inc. and North Louisiana reserves were audited by Netherland, Sewell & Associates, Inc. The audited reserve value estimates for each area were within 4% of aggregate estimates prepared by Range’s petroleum engineering staff. 

KeyFacts Energy US Onshore country page   l   Link to Range Resources US onshore country profile