Range Resources Corporation · NYSE:RRC
Range Resources — Investor Presentation (April 2007)
31 slides from Range Resources's investor presentation, Apr 16, 2007
Slide 1: Company Presentation April 2007
Company Presentation April 2007
Slide 2: Key Considerations
Key Considerations Long life, high margin domestic reserves - 17 year reserve life Large, multi-year drilling inventory 10,000+ drilling locations (3.0 Tcfe net unrisked reserves) 2.5 million net acre leasehold position Consistent baseline growth from drilling at attractive unit costs 17 consecutive
Slide 3: 2007 Year-to-Date Scorecard
2007 Year-to-Date Scorecard 2 Divestitures Sold high cost, short life, mature properties Sold at outstanding price 3 Acquisitions High quality, long life, low cost properties Bought incremental interests in existing properties Each has sizeable upside potential Drilling program off to a terrific sta
Slide 4: 2007 Divestitures
2007 Divestitures Austin Chalk Divestiture Sold in February 2007 for $82 million Properties acquired from Stroud in mid-2006 Properties were determined not strategic to Range and classified as "held for sale" Reserve and operations excluded from Range's continuing operations Gulf of Mexico Divestitu
Slide 5: 2007 Acquisitions
2007 Acquisitions Tonkawa Acquisition $30 million; closed in February 2007 Purchased minority owner's interest in the Tonkawa oil field Range now owns 100% working interest Southern Tarrant County Barnett Shale Acquisition $29 million; closed in April 2007 Purchased minority owner's interest in the
Slide 6: 2007 Acquisition Summary
2007 Acquisition Summary $374 million in total for the 3 acquisitions - $321 million for the reserves and acreage - $53 million for the Nora Field gathering system Proved reserves of 151 Bcfe $2.12/mcfe acquisition price(1) Currently producing 17 Mmcfe/day - - 90% natural gas (1) Excluding gathering
Slide 7: Increasing Capex for Greater Opportunities
Original Budget 2007 Acquisitions(1) Other Increases(2) Revised Budget Drilling $600 $ 42 $ 25 $667 Acreage 58 1 2 61 Seismic 20 2 1 23 Pipelines 20 43 - 63 Other - - 8 8 $698 $ 88 $ 36 $822 (1) Nora, Tonkawa and Fort Worth Barnett Shale (2) Fort Worth Barnett Shale and West Texas Increasing Capex f
Slide 8: Pro forma Reserves
Pro forma Reserves Reserves (Bcfe) Balance 12/31/06 1,758 2007 Divestitures (38) (1) 2007 Acquisitions 151 Pro forma 12/31/06 1,871 Austin Chalk not included - held for sale and not included in proved reserves at year-end 2006
Slide 9: Corporate Overview
Corporate Overview Appalachia Southwest Gulf Coast (1) Pro forma year-end 2006 which includes 2007 acquisitions and divestitures Market Cap ~ $5.0 billion Reserve base (1) 1.9 Tcfe 82% natural gas 17 year reserve life Operations 2007 - 1,003 (757 net) wells Average ~ 39 rigs drilling Large acreage a
Slide 10: Key Value Drivers
Key Value Drivers Proven Track Record Consistent record of growth at "top quartile" cost structure Built-In Growth Large, multi-year inventory of lower risk drilling projects drives built-in "double digit" growth profile Additional Upside Exciting portfolio of emerging plays provides additional near
Slide 11: Attractive Hedges in Place for 2007 and 2008
Attractive Hedges in Place for 2007 and 2008 As of 04/12/07 Gas % Volume Hedged Gas Average Floor Price Gas Average Ceiling Price 2007 Swaps 41% $9.13 - 2007 Collars 42% $7.13 $9.99 Total 2007 Total 2007 83% $8.12 $9.99 2008 Swaps 40% $9.42 - 2008 Collars 21% $7.93 $11.39 Total 2008 Total 2008 61% $
Slide 12: Track Record of Consistent Growth
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 153.9 158 159 164.7 177 182 210 215 229 233 244 250 257 264 289 294 306 0 0 0 Mmcfe/day 2003 2004 2005 Track Record of Consistent Growth 17 consecutive quarters of sequential production growth 2006 2007 154 158 159 165 177 182 210 215 229 2
Slide 13: Track Record of Consistent Growth: 2007 Target
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 153.9 158 159 164.7 177 182 210 215 229 233 244 250 257 264 289 294 306 312 327 341 Mmcfe/day 2003 2004 2005 Track Record of Consistent Growth Raising 2007 growth target from 15% to 16% 2006 2007 154 158 159 165 177 182 210 215 229 233 244
Slide 14: Track Record of Consistent Growth
2002 2003 2004 2005 2006 3 Year Average 5 Year Average Reserve growth 13% 18% 72% 20% 25% 52% 49% Drillbit replacement 114% 117% 217% 249% 377% 290% 237% Reserve replacement (1) 222% 285% 828% 365% 450% 526% 444% F&D costs per mcfe Drillbit only $1.49 $1.59 $1.19 $1.53 $1.61 $1.50 $1.51 All sources
Slide 15: Range's Growth Plan is Working
Range's Growth Plan is Working Reserve Growth Drivers (Tcfe) YE 2005 YE 2006 Pro forma YE 2006 (2) Proved Reserves 1.4 1.8 1.9 Drilling Inventory (1) 1.4 2.0 2.3 Emerging Plays (1) 2.0 to 3.2 4.7 to 7.2 5.5 to 8.7 Total 4.8 to 6.0 8.5 to 11.0 9.7 to 12.9 (1) Net unrisked reserve potential (2) Includ
Slide 16: Large, Multi-Year Drilling Inventory
166 111 2,647 10,034 187 18 Net Bcfe Unrisked Reserves Gross Wells in Inventory Risk Profile Mississippi Norphlet Gulf Coast N. La/Miss. Hosston/CV Appalachia Trenton Black River Midcontinent Deep Anadarko Midcontinent Morrow/ Springer East Texas Stacked Pay Appalachia Oriskany Midcontinent Tonkawa
Slide 17: Emerging Plays Upside
Emerging Plays Upside 5.5 to 8.7 Tcf Play Acreage Unrisked Reserve Potential Activity Devonian Shale - Pennsylvania 420,000 acres 2.5 Tcf to 5.0 Tcf Drilling and leasing Devonian Shale - Virginia & W. VA 378,000 acres 0.8 to 1.5 Tcf Spud well 2H '07 Barnett Shale - Eastern Extension 20,000 acres 1 T
Slide 18: Nora Field Transaction Overview
Nora Field Transaction Overview (1) Range and Equitable each own 50% interest in the 1,600 producing wells, 300,000 acres of leasehold and the gathering system Equitable to drill CBM wells and manage the gathering system Range to drill non-CBM - tight gas, shale gas and deep formations Interest alig
Slide 19: Nora Field - Multiple Horizon Potential
Nora Field - Multiple Horizon Potential 1,100 - 2,500 4,000 - 5,000 5,000 - 6,000 CBM TIGHT GAS SANDS DEVONIAN SHALE SILURIAN / ORDOVICIAN 12,000 Depth in feet
Slide 20: Nora CBM - Acre Spacing
Nora CBM - 60 Acre Spacing Working interests equalized in production, acreage, depths and gathering system Pre- deal Post- deal Net Mcfe/day 22.5 29.1 Gross Wells 1,126 1,167 Net Wells 339 533 Drilling 275 CBM wells in 2007 Undrilled Drilled New Acreage
Slide 21: Infill Drilling: Nora CBM Field
Infill Drilling: Nora CBM Field Infill going from 60 acres to 30 acres Undrilled Drilled Infill Area
Slide 22: Nora CBM Upside Summary
Nora CBM Upside Summary Gross gas in place 2.4 Tcf Range recovery estimates 70% 80% 1.7 Tcf 1.9 Tcf Range average NRI 54% 54% Net remaining recoverable 0.8 Tcf 1.0 Tcf Currently booked proven reserves 0.2 Tcf 0.2 Tcf Net unbooked reserves 0.6 Tcf 0.8 Tcf
Slide 23: Nora Tight Gas Sand Wells
Nora Tight Gas Sand Wells Pre- deal Post-deal Net Mcfe/day 3.1 10.8 Gross Wells 449 579 Net Wells 27 265 Undrilled Drilled New Acreage
Slide 24: Downspacing Offers Additional Nora Tight Gas Sand Upside
Downspacing Offers Additional Nora Tight Gas Sand Upside Field Delineation 100 locations still to be drilled on existing 112 acres spacing Infill Will test 60 acre spacing Current spacing recovery ~50% of gas in place Infill wells will potentially increase recovery to 80% Up to 600 potential infill
Slide 25: Nora Field Growth Profile
Nora Field Growth Profile Outstanding Production Growth with Low Finding Costs Net MCFED
Slide 26: Nora Devonian Shale Potential
Nora Devonian Shale Potential Cross Section Shows Devonian Shale Exists Across the Nora Field Area Clinchfield # 203 Cumulative recovery 1.4 Bcf Estimated ultimate recovery 2.2 Bcf Recent Horizontal Wells 37 vertical wells producing from Devonian shale on Nora acreage; co-mingled with tight gas sand
Slide 27: Nora Shale Cross Section
Nora Shale Cross Section Cross-section of logs indicate shales span Nora Field
Slide 28: Barnett Shale Potential
73,000 gross (64,000 net) acres of leasehold 94% of leasehold in the Core and Expanding Core 8 rigs currently operating Production over 45 Mmcfepd Ellis County, eastern extension. Well spud on April 9th High quality technical team is leading to additional opportunities Barnett Shale Potential 1.6 Tc
Slide 29: Pennsylvania Devonian Shale
Pennsylvania Devonian Shale 2.5 to 5 Tcf 420,000 acres leased 21 vertical wells and 2 horizontal wells currently online First three vertical wells appear to have 600-1,000 Mmcfe of reserves each Finding and development costs expected to be $1.30 based upon early tests $5.00 NYMEX gas price yields ~2
Slide 30: Why Range?
Why Range? Proven Track Record of Growth 17 consecutive quarters or production growth at low cost Built-In Growth (2.3 Tcfe) 10,000+ low risk drilling projects in inventory Significant Upside (5.5 to 8.7 Tcfe) Shale plays, CBM and exploration Valuation Has Room to Run Much of the potential value fro
Slide 31: Forward-Looking Statements
Forward-Looking Statements Statements concerning future capital expenditures, production volumes, reserve volumes, reserve values, reserve potential, number of development and exploration projects, finding costs, operating costs, overhead costs, cash flow and earnings, including statements regarding