Range Announces Fourth Quarter 2022 Results and 2023 Guidance

FORT WORTH, Texas, Feb. 27, 2023 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its fourth quarter 2022 financial results and plans for 2023.

Full-Year 2022 Highlights –

• Generated record cash flow from operations of $1.9 billion
• Returned $1.5 billion to shareholders through $400 million in share repurchases, $39 million in dividends and $1.1 billion in debt reduction
• Net production averaged 2,121 Mmcfe per day
• All-in capital spending of $492 million, or $0.64 per mcfe
• Proved reserves of 18.1 Tcfe with an after-tax discounted future net cash flow of $24.5 billion
• Estimated future development costs of $0.41 per mcfe for proved undeveloped reserves
• Increased hedge positions for 2023 and 2024 to approximately 55% and 35% of natural gas production with weighted-average floors of $3.57 and $3.75 per MMBtu, respectively
• Net Debt to EBITDAX of 0.8x (Non-GAAP) at year-end 2022

2023 Production and Capital Guidance –

• All-in 2023 capital budget of $570 to $615 million planned to maintain production at 2.12 to 2.16 Bcfe per day
• 2023 all-in maintenance capital expected to be approximately $0.76 per mcfe, the lowest amongst U.S. natural gas producers

Commenting on the 2022 results and 2023 plans, Jeff Ventura, the Company’s CEO said, “The Company successfully managed a great market opportunity in 2022 – generating record free cash flow, materially strengthening our financial foundation and returning significant capital to shareholders. We reduced debt by over $1 billion and expanded our return of capital program with $400 million in share repurchases and an annualized dividend of $0.32 per share. As we enter 2023, the progress made during the past year both financially and operationally puts Range in the strongest position in Company history. We are excited about the opportunity to develop Range’s world-class inventory over the coming decades into a growing market for natural gas and natural gas liquids.” 

Financial Discussion

Except for generally accepted accounting principles (“GAAP”) reported amounts, specific expense categories exclude non-cash impairments, unrealized mark-to-market adjustment on derivatives, non-cash stock compensation and other items shown separately on the attached tables. “Unit costs” as used in this release are composed of direct operating, transportation, gathering, processing and compression, taxes other than income, general and administrative, interest and depletion, depreciation and amortization costs divided by production. See “Non-GAAP Financial Measures” for a definition of each of the non-GAAP financial measures and the tables that reconcile each of the non-GAAP measures to their most directly comparable GAAP financial measure.

Financial Position

During the fourth quarter, Range purchased 3.19 million shares at an average price of approximately $26.87 per share. As of year-end, Range had approximately 238.9 million shares outstanding and $1.1 billion of availability on the current share repurchase program.  

During 2022, Range reduced debt by a total of $1.08 billion, representing the Company’s fifth consecutive year of debt reduction. At year-end, Range’s net debt was approximately $1.87 billion, consisting of $1.85 billion of senior notes and $19 million bank facility borrowings. On a trailing twelve-month basis, Range’s leverage ratio, a non-GAAP metric, defined as Net-Debt-to-EBITDAX was approximately 0.8x.

In the fourth quarter 2022, Range realized a total of $24.5 million in contingent derivative settlement gains related to an asset divestment completed in 2020. Range expects to receive the cash proceeds in the first half of 2023. Range has the potential to receive an additional $21 million in contingent payments based on natural gas, NGL and oil prices in 2023. At year-end 2022, the fair value of these remaining contingent payments was approximately $13.1 million.

Capital Expenditures

Fourth quarter 2022 drilling and completions expenditures were $99.9 million and $9.5 million was invested in acreage and gathering facilities. Total 2022 capital budget expenditures were $492 million, including $461 million on drilling and completion, and a combined $31 million on acreage, gas gathering systems and other investments.   $11 million of fourth quarter capital was invested in securing equipment being utilized for the 2023 operational plan.

Fourth Quarter 2022 Results

GAAP revenues for fourth quarter 2022 totaled $1.63 billion, GAAP net cash provided from operating activities (including changes in working capital) was $613 million, and GAAP net income was $814 million ($3.31 per diluted share).  Fourth quarter earnings results include a $448 million mark-to-market derivative gain due to decreases in commodity prices.

Non-GAAP revenues for fourth quarter 2022 totaled $998 million, and cash flow from operations before changes in working capital, a non-GAAP measure, was $513 million.  Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $312 million ($1.30 per diluted share) in fourth quarter 2022.

The following table details Range’s fourth quarter 2022 unit costs per mcfe^(a):

The following table details Range’s average production and realized pricing for fourth quarter 2022:

Fourth quarter 2022 natural gas, NGLs and oil price realizations (including the impact of cash-settled hedges and derivative settlements) averaged $4.33 per mcfe.

• The average natural gas price, including the impact of basis hedging, was $5.71 per mcf, or a ($0.55) per mcf differential to NYMEX. Regional markets experienced wide basis pricing during the quarter, primarily related to the month of October, but have subsequently improved. Range’s 2023 natural gas differential is expected to be ($0.35) to ($0.45) relative to NYMEX.
  
  
• Crude oil and condensate price realizations, before realized hedges, averaged $75.66 per barrel, or $7.08 below WTI (West Texas Intermediate). Range’s 2023 condensate differential is expected to be ($9.00) to ($13.00) relative to NYMEX.
  
  
• Pre-hedge NGL realizations were $27.17 per barrel. The average NGL price, including settled index hedges was $27.83 per barrel. Range’s 2023 NGL differential is expected to be ($1.00) to +$1.00 relative to a Mont Belvieu equivalent barrel.
  
  

2022 Proved Reserves

As shown in the table below, the present value (PV₁₀) of reserves under SEC methodology was $29.6 billion. For comparison, the PV₁₀ using January 31, 2023 strip prices equates to $15.1 billion using the same proven reserve volumes.

Year-end 2022 reserves included 7.1 Tcfe of proved undeveloped reserves from 367 wells planned to be developed within the next five years with a projected development cost of $0.41 per mcfe. Beyond the five-year reserve calculation window, Range has thousands of high-quality well locations in the Marcellus and further upside in the Utica and Upper Devonian horizons. Range also has a network of more than 250 existing well pads that provide Range the opportunity to develop thousands of future wells while utilizing existing roads, pads and infrastructure. Consistent with recent years more than half of Range’s wells expected to turn to sales in 2023 are from pad sites with existing production.

2023 Capital Program and Production Guidance

Range’s 2023 all-in capital budget is expected to be $570 to $615 million. The capital budget includes approximately $540 million to $565 million for drilling and completion costs and $30 - $50 million for acreage, leasehold and other investments. 

Consistent with recent years, Range’s development plan for 2023 will target a maintenance program that holds production approximately flat. Due to efficiencies gained through second half 2022 and into early 2023, Range expects to have a slight build of in-process well inventory during 2023 that will provide optionality into the 2024 and 2025 planning process. There is approximately $30 million included in the 2023 capital plan for this increased inventory. Range’s 2023 plan is expected to deliver an all-in maintenance capital cost of approximately $0.76 per mcfe, which is expected to be the lowest-cost program in Appalachia.

The table below summarizes expected 2023 activity and 2022 regarding the number of wells to sales in each area.

Guidance – 2023

Capital & Production Guidance

Range is targeting a maintenance program in 2023, holding production approximately flat at 2.12 – 2.16 Bcfe per day, with ~30% attributed to liquids production. Range’s 2023 all-in capital budget is $570 million - $615 million.

Full Year 2023 Expense Guidance  

Full Year 2023 Price Guidance

Based on recent market indications, Range expects to average the following price differentials for its production in 2023.

Hedging Status

Range hedges portions of its expected future production volumes to increase the predictability of cash flow and to help maintain a strong, flexible financial position. Please see the detailed hedging schedule posted on the Range website under Investor Relations - Financial Information.

Conference Call Information

A conference call to review the financial results is scheduled on Tuesday, February 28 at 8:00 AM Central Time (9:00 AM Eastern Time).

Please click here to pre-register for the conference call and obtain a dial in number with passcode.

A simultaneous webcast of the call may be accessed at www.rangeresources.com. The webcast will be archived for replay on the Company's website until March 28th.

Non-GAAP Financial Measures

Adjusted net income comparable to analysts’ estimates as set forth in this release represents income or loss from operations before income taxes adjusted for certain non-cash items (detailed in the accompanying table) less income taxes. We believe adjusted net income comparable to analysts’ estimates is calculated on the same basis as analysts’ estimates and that many investors use this published research in making investment decisions and evaluating operational trends of the Company and its performance relative to other oil and gas producing companies. Diluted earnings per share (adjusted) as set forth in this release represents adjusted net income comparable to analysts’ estimates on a diluted per share basis. A table is included which reconciles income or loss from operations to adjusted net income comparable to analysts’ estimates and diluted earnings per share (adjusted). On its website, the Company provides additional comparative information on prior periods along with non-GAAP revenue disclosures.

Cash flow from operations before changes in working capital (sometimes referred to as “adjusted cash flow”) as defined in this release represents net cash provided by operations before changes in working capital and exploration expense adjusted for certain non-cash compensation items. Cash flow from operations before changes in working capital is widely accepted by the investment community as a financial indicator of an oil and gas company’s ability to generate cash to internally fund exploration and development activities and to service debt. Cash flow from operations before changes in working capital is also useful because it is widely used by professional research analysts in valuing, comparing, rating and providing investment recommendations of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Cash flow from operations before changes in working capital is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operations, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity. A table is included which reconciles net cash provided by operations to cash flow from operations before changes in working capital as used in this release. On its website, the Company provides additional comparative information on prior periods for cash flow, cash margins and non-GAAP earnings as used in this release.

The cash prices realized for oil and natural gas production, including the amounts realized on cash-settled derivatives and net of transportation, gathering, processing and compression expense, is a critical component in the Company’s performance tracked by investors and professional research analysts in valuing, comparing, rating and providing investment recommendations and forecasts of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Due to the GAAP disclosures of various derivative transactions and third-party transportation, gathering, processing and compression expense, such information is now reported in various lines of the income statement. The Company believes that it is important to furnish a table reflecting the details of the various components of each income statement line to better inform the reader of the details of each amount and provide a summary of the realized cash-settled amounts and third-party transportation, gathering, processing and compression expense, which were historically reported as natural gas, NGLs and oil sales. This information is intended to bridge the gap between various readers’ understanding and fully disclose the information needed.

The Company discloses in this release the detailed components of many of the single line items shown in the GAAP financial statements included in the Company’s Annual Report on Form 10-K. The Company believes that it is important to furnish this detail of the various components comprising each line of the Statements of Operations to better inform the reader of the details of each amount, the changes between periods and the effect on its financial results.
  
We believe that the presentation of PV₁₀ is relevant and useful to our investors as supplemental disclosure to the standardized measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our proved reserves before taking into account future corporate income taxes and our current tax structure. While the standardized measure is dependent on the unique tax situation of each company, PV₁₀ is based on prices and discount factors that are consistent for all companies. Because of this, PV₁₀ can be used within the industry and by creditors and security analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis.

RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading U.S. independent natural gas and NGL producer with operations focused on stacked-pay projects in the Appalachian Basin. The Company is headquartered in Fort Worth, Texas.  More information about Range can be found at www.rangeresources.com.

Included within this release are certain “forward-looking statements” within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are not limited to historical facts, but reflect Range’s current beliefs, expectations or intentions regarding future events.  Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “outlook”, “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements.

All statements, except for statements of historical fact, made within regarding activities, events or developments the Company expects, believes or anticipates will or may occur in the future, such as those regarding future well costs, expected asset sales, well productivity, future liquidity and financial resilience, anticipated exports and related financial impact, NGL market supply and demand, improving commodity fundamentals and pricing, future capital efficiencies, future shareholder value, emerging plays, capital spending, anticipated drilling and completion activity, acreage prospectivity, expected pipeline utilization and future guidance information, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and Range's future performance are subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements. Further information on risks and uncertainties is available in Range's filings with the Securities and Exchange Commission (SEC), including its most recent Annual Report on Form 10-K. Unless required by law, Range undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

The SEC permits oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions as well as the option to disclose probable and possible reserves. Range has elected not to disclose its probable and possible reserves in its filings with the SEC. Range uses certain broader terms such as "resource potential,” “unrisked resource potential,” "unproved resource potential" or "upside" or other descriptions of volumes of resources potentially recoverable through additional drilling or recovery techniques that may include probable and possible reserves as defined by the SEC's guidelines. Range has not attempted to distinguish probable and possible reserves from these broader classifications. The SEC’s rules prohibit us from including in filings with the SEC these broader classifications of reserves. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of actually being realized. Unproved resource potential refers to Range's internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques and have not been reviewed by independent engineers. Unproved resource potential does not constitute reserves within the meaning of the Society of Petroleum Engineer's Petroleum Resource Management System and does not include proved reserves. Area wide unproven resource potential has not been fully risked by Range's management. “EUR”, or estimated ultimate recovery, refers to our management’s estimates of hydrocarbon quantities that may be recovered from a well completed as a producer in the area. These quantities may not necessarily constitute or represent reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or the SEC’s oil and natural gas disclosure rules. Actual quantities that may be recovered from Range's interests could differ substantially. Factors affecting ultimate recovery include the scope of Range's drilling program, which will be directly affected by the availability of capital, drilling and production costs, commodity prices, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals, field spacing rules, recoveries of gas in place, length of horizontal laterals, actual drilling results, including geological and mechanical factors affecting recovery rates and other factors. Estimates of resource potential may change significantly as development of our resource plays provides additional data.

In addition, our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. Investors are urged to consider closely the disclosure in our most recent Annual Report on Form 10-K, available from our website at www.rangeresources.com or by written request to 100 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102. You can also obtain this Form 10-K on the SEC’s website at www.sec.gov or by calling the SEC at 1-800-SEC-0330.

SOURCE: Range Resources Corporation

Range Investor Contacts:

Laith Sando, Vice President – Investor Relations
817-869-4267
lsando@rangeresources.com

Range Media Contacts:

Mark Windle, Director of Corporate Communications
724-873-3223
mwindle@rangeresources.com

RANGE RESOURCES CORPORATION

RANGE RESOURCES CORPORATION

RANGE RESOURCES CORPORATION

RANGE RESOURCES CORPORATION

RANGE RESOURCES CORPORATION

RANGE RESOURCES CORPORATION

RANGE RESOURCES CORPORATION