RRC - Earnings call transcript Q3 2017 | Range Resources Corporation

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Operator

Welcome to the Range Resources Third Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Statements made during this conference call that are not historical facts are forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements. After the speakers' remarks, there will be a question-and-answer period. would turn I to call time, Mr. this like the to over At President at Investor Sando, of Laith Vice Relations Range Resources. Please sir. go ahead,

Laith Sando

We'll operator. Jeff Officer; Ventura, and and everyone, Executive Officer; third The Good Chief for Chief on you, Operating Walker, of Chief Officer. speakers are, Hopefully we've review Range's call. quarter thank slides and release press presentation Financial you've that to call some Manny, today's Roger Ray updated on posted joining be earnings Thank this morning. website. our the those had a you referencing investor morning, chance

We the our with Investors It's EDGAR it yesterday. under you also or SEC's filed access can the on SEC tab, using website XX-Q our the available system.

point non-GAAP referencing we'll also out call. Before that measures today's we certain let be on begin, me

to provides press figures. release Our of reconciliations most GAAP comparable the these

our differentials supplemental calculation natural tables turn we've gas posted let of In on hedging me upcoming to all products. non-GAAP the information tables also measures. these the With Jeff. addition, to supplemental that, for and quarter The on over assist detailed call in calculated the provide website

Jeffrey L. Ventura

you, on the joining Laith, everyone us and today. Thank call thanks to

of and is company's XXXX, the a very nearing important As approach development. we exciting close the in point Range Marcellus

the position in We have is now facilities, a and to additional of Range country. has a and point play clearly in as Marcellus periods the are capital-intensive long projects, like, the LNG value. at capture essence, field developing an in in power the been and plants what construction work. Major such been largest finding in has, inflection decade-long leader gas commissioning of a

our last Range come customers' the decade production Marcellus X this This outside of gas developing slated growing portfolio an the an to that The infrastructure inventory and across end, we enable The this provides increasingly XXXX. our infrastructure capital-efficient of takeaway substantial Range, is to continue many Basin. commissioning will of to in gas U.S. many, early three deliverability of natural for and infrastructure NGLs For projects Bcf Appalachian condensate markets high-quality of us capital will by almost culmination gas, to concert foundation enables us build-out secured last years. over to The our with the deliver inventory this commitments in manner. with per phase online nearing meet completion day demand, both believe move the within and returns natural Range a strong has on of internationally.

XXXX, result as could improvement of pricing, we to natural local strip that in of gas differential and continued improved increased Based in into gas realized higher-priced Range specifically, infrastructure, this as for a markets expect minus in pricing. XXXX. Hub a $X.XX, on our prices offsetting about For or gas a we result better, only corporate costs Henry transport of result expect improvement natural transported

our higher also has We on the price use as the evidenced side exports. guidance. reported participated domestic conditions balance and coming NGL to in market fundamentals by significant and increased with into NGL back as well, see Range due improvements, positive realizations market

substantial ethane can ethane leaving two, portfolio two in And, us. pipeline ethane with our cash stream. continues at Range's accomplish One, growth. flow natural we're Looking goals first. we increasing versus important even specs gas gas for to meet

additional double in the problems are provides percentage have of fact, ethane come to our flow an country flexibility cash That's enviable spec. pipeline stream in no gas of years the could In that wet finding leave the agreements all selling ethane production accretive. in that as producers it us of one be the still position in from extracting NGL and significant largest of and the to its and meeting current theoretically ethane we're Range additional gas levels, such a

markets. On side, our propane the sell to into with Mariner X, almost international continue capacity on the production all we of only propane as producer East

team So with Appalachian develop and constraints. ability among see projects far we additional Range decisions this Range producers the transactions NGL than Mariner Belvieu-plus make to have economic pricing. based able about projects other East an and NGL steam like the from Again, to has year, the as those in-basin market how been rather to X, the the Mont to continues enviable position transactions on crackers operational benefits realize

for are drilling of in Pennsylvania, to the quarter the performing highest history, we years projects the performing well, in XXXX seen market, projecting line improving the the strip which results of wells in and in company's the the As we we're best WTI Louisiana we've of very and improve. realizations and a in strong laterals pleased similar continue well, will will Ray a the get we expect and are percent the place that potential wells of the fundamentals we're the a XX% our bringing In believe strip here in despite drilled the on I'm expect Operationally, as range, to in North XX% to we pricing, levels NGL fourth to a wells XXXX be we're Range that NGL forward. result long from Range's reach quarter going minute. cover has Range-designed on several that of the have WTI Based backwardated that XXXX. also in to fourth drill some realizations and

success, Marcellus recent better that the allocate our to but Regarding capacity, have takeaway drive capital plays. the two resource areas is coming firm utilize to we'll optimize demonstrates it flow benefits additional of having corporate allocation, the to we additional capacity seen cash Both high-quality capital using and as drilling year one operations will returns online. Marcellus next expectation drilling of Louisiana overall fund North of additional

service pricing, at This coming below will that, our XXXX. in projected would have a finalized formal slightly say transportation XXXX, we strip into to time. cash as satisfy we the to can during budget not volumes flow. result, at give spend this result For guidance we I our and, on will not sufficient yet expect our at What is commitments or pipelines

commitments XXXX, are To our flow will to moderate our it's accelerate current while intention use have price cash growth that extent de-levering in than cash than to from environment. excess reduce to achieve in more commodity Beyond flexibility our growth. production prices flow the transportation we levels, leverage and current balance spending when less the satisfied, sheet commodity improve current rather the

balance longer to asset reduce order term, debt our pursuing which In to in as our than properties we're will the committed leverage, we're the we sales, EBITDAX to can profile. investment-grade at in times reducing to various and, Pennsylvania assets. Looking as an Mid-Continent strive we X our less sheet, includes swiftly towards Northeast remaining

ways allocating at value acreage we forward capital of In would to our addition, our pull that on valuation. not otherwise to develop By we drives our that look some timeframe efficiently in will below debt timing spending of sensitive flow, of de-lever and to clearly is to projects this the given method best cash commodity over quality The magnitude reduce time, prices. can Range very and our inventory. a

efficiency, the our should However, the given capital recycle industry. peer-leading remain our per among dollar growth in best spent ratio, Range's

the have of that on been leverage industry which focus our equally on play development, to metric, on return current While stockholders when think and returning Many right we're next improving on focusing our to the of metrics. of proud is Marcellus. expect instead We that focusing growth makes well agree. focused capital, it as in shareholders for the our the rapidly our cash less it's and of they this sense. development stage and loud flow stage Range on fits investors cash and We metrics, and clear well, with shale we're

I tied metrics of think targets. not very to Range debt-adjusted its per-share pointing the and also absolute been few has growth compensation for the companies it's E&P last executive with worth out, decade, one

board's In addition, added and Range this our this to clearly We rate metrics. metric return-based evidences a drilling management's of commitment compensation. think year return to our

deployed billions the or so, dollars shale in of of of the redeployed your in we have best strong in basins doing world. capital a and, one position achieved We

returns very very permit sheet inventory. drilling to we of What quality and improvement distinguishes from a expect forward, a high Range shareholders. returns balance large will capital, and combination both Going infrastructure flexibility continually to Range's the and is optimize assets

will beyond other of We that companies. most that last years have for many locations core

an will call term. operations. create believe As gas time if trades like cash and more we will gas Ray free with I Range commodity, the have our which to and to international grow the demand significant now shareholder continues long turn to discuss over inventory, high-quality over flow of plenty value will

Ray N. Walker, Jr.

online XX%. guidance represents well new capacity, expected came ramp and Jeff's pricing remains Jeff. equivalent our up and over little a of day, growth during quarter well the expected about day. Production sets at quarter pipeline resulting Bcf X.XX of beyond. equivalent per per fourth Organically, with with differentials fits fourth which of description Bcf incremental this day consistent million This coming is for for next per day, us Bcf year-over-year XX% equivalent the of annual in the in our at third Thanks, a XXXX, guidance improving quarter growth. X.XX And X.XX for $XXX year anticipated production

four-well sales of per were flowing The remaining well to brought Appalachia per seven completed different speed with operational reported Looking quarter, average you strong condensate cubic average start in Pennsylvania. day performance up XX% southwest were with two a seven by production with being wells behind We'll and, third Also of permanent our the a in pads completed pad on the with an XX,XXX an wells producers, The for X,XXX average the we acreage over turned and seven-well was from the X,XXX feet acreage, continue sales normalized of we at per days been than high performing on cubic over of of IP constrains average for the across the BOE producing design XX bring the are the in five length wells pad IP seven Marcellus The is spread generating constrained condensate the be area, were the greater the of quarter. both portion our XX type we the third X,XXX day time, wells per sales results. exceptional driver some condensate curve from to a to XX lateral main more day, stages for conditions, with to quarter. increase basis. per average wells days, some which these wells eight after stages in to over production last the reported well for lateral super-rich well. highlights pads XX with completed XX million At liquids. well and sales well the our in quarter-over-quarter wells to XX% average an equivalent have transitioned These of feet than super-rich The Starting XX% which production liquids. under per greater well. day the position feet equivalent quarter well two barrels company. of than equipment, to or XX per of an feet above per per million in pads length for

after came And under perform sales, the conditions, pads quarter. early online curve. above type XX the the days significantly of to to One in continues again normalized constrained

on stages in lengths our equivalent pad up through feet currently lateral constrained flowing permanent average wells well. million XX,XXX wet wet Moving XX% drilling in ago. turned our wells each under area, gas want per performing per normalized XX under you Houston well last are and began wells on pad a conditions three-well six-well with per two above area, sales the to feet of curve a days on productivity pad outstanding on about to And production recently we XX% constrained east average area We're was the completed I and from XXX the conditions, been Also pad a online are five-well improved that decade gas the clearly XX near type with over the averaging the wet over equipment, plant. day Having for an highlight still These flowback. the we area to quarter liquids. well and IP over a cleaning with basis. cubic wells a update

Moving dry to further to gas the area. east, the

call, end a day we million for a day production the still the of offsetting XX at days, XX pad. in had gas results. last call, rate XXX At greater pad maintained a the discussed to pad And pad million and average with Updated XX well quarter show online end of flow the days. this numbers we're feet. four-well this third the dry of last the for a year. presently a million pad incredible are this acreage bring over XX time the with laterals wells than by for this day new maintained the expect These XX,XXX On our of

Big applying types appropriate many holds of technologies. the position, of reported significantly improve on I quality the reflect inventory our a pads the in thousands the are incorporating across large have currently of completion Appalachia. in pads analytics We well a repeatability new are our highest Marcellus page and believe of our on and pointed These I Range drill out results and, our by left to four team's reflection the entire ability in opportunities play. asset, these of of our strategies representing to sales and on slide team years X top-six technical just highlighted to our value-creating discussed website. presentation updated All the also rates therefore, Data de-risked they of exceptional literally acreage development.

in in continue to improvements make the efficiencies across We board Appalachia. operational

go to the this the quarter last some through comparing quick quarter year of me Let examples third year. of third

of drilled the the quarter representing XX,XXX third side, we in X,XXX of third greater over length quarter XX,XXX quarter of average in XXXX quarter the the in drilled feet. lateral feet the drilled We third was was of average that On lateral XXXX feet, increase. The in The year. third one drilling greater XX,XXX XX% was than a wells feet well this of XX than length. XXXX

we $XXX cost year of which time utilizing costs XX% XX% than XX% production millions of a saving redeployment $XXX operating Importantly, stages compared less to foot the This previous a ago. record of what three expenses outside large cost Appalachia foot drilling is per to in record at compete the by a laterals lateral in agreements Water sharing operating completions XXXX representing per laterals a only period of of while a and expenses lease contributors quarter successfully stages longer the foot, third XXXX the frac the than a key year. on and is Year-to-date, to same are difficult facilities the as with of dollars XX% is crews. part lower in operators And last decrease. are quarter means this more basis was is have per our currently in our commodity and capital been were strategy in XX% and drilled reducing third year. in business. the fracs unit X,XXX team company's five longest quarter, top-XX drilled which amount The of completed stages third

of year more change mix on wells it's our year. throughout put of it's pads can as believe Again, the the year and XX% the XXXX that While an wet pleased issues optimizes months permitting past this second our XX,XXX wells and we're plans still the be versus lateral be I'm early working foresee report over for slightly of the versus striving permits around dry plan, operations. for and X,XXX will average the we on budget, they sales going any run next XX% few approaching do, and we in wells we of around be the should length process existing these feet has to half than very to forward. feet for capital-efficient as with The always economics in wells efficiently higher expected average this early, of versus this greater to and year. best XXXX, don't is Appalachia team

Pennsylvania has job back getting the DEP, North track. Shifting with now along on team, us Our Louisiana. a tremendous to done

fluid A curve, of delineate type the we the X,XXX wells the stacked XX-day Terryville feet testing respectively, lengths both X,XXX-foot and sales in Upper with equivalent Range of public completed Deep are at stack on for the line same averaged $XX.X extension we're Terryville, field. cubic Red XX.X first expected. two Both with and pay executed totally made while we've a improving Our strides the Lower the as Terryville the is were of great of is day wells continuing and equivalent potential which the In In The September. in year by three the well designed lateral intensity located, completed is with announced day, to areas. pad, cost best operational for with on rates team averaged $XX.X million the remainder potential feet. example X,XXX good delineating feet and feet and field well Pink consistent, The XX well million in XX lateral sales of Pink interval early to that strategically million the per per stages. in have pay efficiencies plan the driving and days to-date. focusing for and drilled remains typical while Terryville, wells

more beyond. in this during have any We did online planed these quarter and three. wells new XXXX area after bring wells We for the not

salt promising, different the work reservoir. up. completion fourth very online X.X to The and we thousand-foot couple but to that Currently, call, blocks that block ramp have in new detailed showed later drive moving Field, remaining big on the basis coming over hopeful the production had lateral order peak we on model We three a going have promising. in On in and of are stages of north to we Driscoll as next production data and be designs production east with information a Terryville three frac XXXX extension we look new other three just completed wells the with west the the two of discuss wells the blocks November is were south and December. are early more early get study test horizontal we XX-hour the of extension horizontal course, early had The and rig Also weeks Terryville. will being wells underway, rig per and day drilling We recently activity the crews started the area, to on these normalized on million In very of working flowbacks rates finished week. Upper completing one separate will, area offsetting lateral. a quarter would in wells in of during the a currently of per this a last have up was a call, well in which to predicted. to our the is wells than in few the phases cleaning frac fault Field Vernon in (XX:XX) crew Red this fault

the in Coast, currently XXXX. We two NYMEX-based better the volumes XX% the transportation. continue of quarter Leach end expect fourth southwest capacity, this online, first, next Projects include these to should day the utilization growth pricing. all provide then, By and see plans out end to projects. rerouting When first both year. with reaching will Of production are essentially more out of TransCanada's we first Transfer's be from and immediately reach sending or which early prior to pricing. Rain quarter existing the Tetco of of of late and the production which end have Xpress Rover which these XXXX, Project, and be to from half capacity transport which over reach marketing. projected fill million our production a by we'll XXX than of greater markets the production Gulf southwest Enbridge's Southwest projects incremental our XX% additional Range completion will Range service second, receives These the local transportation Project, have gross By of wells of of the should Switching year Energy XXXX, full then year-end, of than Adair by, we (XX:XX) to Pennsylvania its believe will near full to to Range these to quarter Pennsylvania, of ability are to

increase Range's to portfolio should natural additions forward. Range's of seasonally especially the going gas during basis these volatility, Importantly, reduce months weak predictability differential corporate and

this anywhere gas, production these that I of near-term in-service mean to those pipes. the day, understand case a two-tenths from to for seemed to the has been relates immediately not in close capacity. a per B the a it immediately fill fill and all the day way always macro that increase to the capacity the new past, were natural Appalachian of when additions per the does up will new projects B As to industry

we new day XXXX, better few projects production believe with XX the Pennsylvania, per we between XX of displacement today Basin industry equivalent uptick However, a Bcfs additions the think production we is instant rig combined production. per added support to end from capacity has between and quarters happening in the exhaustion. and significant the southwest of of new will the capacity these given rather cannot next see over Bcfs strip Unless to now gas day especially moved of from where in than with sweet spot local as simply see markets additions, the significant an wave markets increases

in the should levels stocks on global strong export than to coupled keep next based domestic reported elevated propane below expected throughout this in Moving prices demand of XX% propane XXXX multi-year as realization winter seen in U.S. NGL of domestically for a Slower XXXX, and additional part to pricing increased September year. average WTI Range the by and which, both percent Propane for and achieved in of led years, the storage prices of down. summer as pull liquids. into export highs past plants five-year adjusting That, last remained during highest ahead have versus PDH demand start-up inventories the quarter, primarily low of storage. days increases slowly propane growth when especially and normal, of Asia and we've the in with is and several continued and internationally. prices Range, third of current into the WTI supply

this in been future. see only market and Range the doing its with majority on since success in replicate we've exporting of capacity to X, XXXX. out of propane Belvieu and early propane Mariner expect the prices the Europe opportunities above-Mont producer to East so, been As has to able Asia By capture

and XXXX XXXX. into Looking

financially, Appalachia liquids selling local projects coming start and improving quarters, Range to pricing. Range over improving local as of optionality Basin, internationally sent is the out in benefit additional well-positioned local the supply have As both taking is of of NGL advantage markets. up NGL will

result a though see NGL price of we anticipated pricing, WTI Range's of for a around expect early, of to NGL As And XXXX still appears percent XX%. quarter these to be the as a than will at Again, largest starting of much better began. in this point a be advantage believe Range we NGL how to unique differential improvements for U.S. fourth producers one XXXX the

Now Roger turn over the I'd the financials. to like call to to discuss

Roger S. Manny

Thank marks you, revenues, and were XXXX. the third XX% $XXX hit In NGL our total significantly quarter, cash-settled derivatives, revenues guidance. gas, including quarter on last Natural the costs quarter third higher cash quarter production than oil flow the third and the higher with and in-line and higher year. prior or We than Ray. were were million than of of

XXX% flow XXXX. Third quarter million, $XXX from a year. last cash cash higher than XX% flow Year-to-date year-to-date was totaled increase $XXX million,

last million flow $XXX per totaled share last year. year-to-date XX% higher was the than EBITDAX was Fully Year-to-date higher third was XX% third EBITDAX cash $X.XX, cash of quarter quarter for million. Third than per diluted diluted year-to-date flow and $X.XX, fully year. $XXX share the quarter

margins year, forward. expense noteworthy quarter items, to new pipeline capacity net a than Net cash second later items. with the was growing income the fourth adjusted which our a cash and million while non-recurring As anticipate quarter several faster loss was coming going the in-line for prices on and and third improvement year. cash common extraordinary strengthening NGL cash improvement and quarter $XXX in third next income of using last of costs, margin in revenue the over GAAP due was quarter we analyst million, methodology, MCFE non-cash our is $XX early $X.XX, for XX% With is

below higher-than-anticipated On above taxes taxes, guidance. to the costs, in recurring production while cost were the with item over due to unit work-over expense in guidance in-line ad unit costs valorem higher side, $X.XX Fee. including severance expense guidance Impact Other came $X.XX Pennsylvania and direct or operating came due

non-recurring the in side, of a On had noise we the expense bit quarter.

as First, represents $XX Mid-Continent property sales total took for process. impairments million remaining the also this million an the we $X dry we cost center center. our to exploratory in proved properties Mid-Continent prepared booked Mid-Continent to active an of hole expense cost

anticipate accounting, Second, be did leases that must expiration future under current successful renewing impaired in not we periods upon efforts quarter. the in

result, in the unproved rightsize our we anticipated impaired of activity. million As and properties third begun as have $XX XXXX we to further a total quarter a of high-grade leasing

Turning to the balance sheet.

Jeff stated, bringing our focused X below on the As to reductions we over are intently times follow. term, additional leverage with near down

asset We are Until debt difficult is and over usual, But sales $XXX until of active timing as these sales our in process committed XXXX. predict. have underway. long-term sales to availability remains consummated, million liquidity maturities ample, with no

hedge positions our natural our for quarter hedging particular, added The products. new volumes we to third mention, active an of all XXXX, was are The of third are hedges to but XXXX margins from projected too build tables the with significant the quarter program, our an fourth additional and to specifics XXXX in forward gas release, to XXXX found these and most production. on Range higher In which earnings detailed and hedged numerous bring summary, the our and to XX-Q should and improving base production, We hit steady. quarter supplemental in was XXXX. In look solid quarter, Jeff, marks back excellent you. across website.

Jeffrey L. Ventura

let's up Q&A. Operator, for it open

Operator

first question line And from your Johnson of Thank Rice. Mills you, comes with Ventura. the Mr. Ron

Ronald E. Mills

Hey, Morning, guys. Jeff.

process? a bit you of allocation cause can't anything thought may if provide you description could as curious talked you how may the between and specifics, think maybe Just allocation you about to just and little capital about you talk that that Louisiana more by but know I change XXXX, Marcellus generalities the

Jeffrey L. Ventura

question, Great Okay. Ron.

at I but from frame We haven't finalized little me to try different it little if a a angle bit. can our yet, see it XXXX help come let and plans

local could And firm transportation makes capacity, on good of it capacity XXXX. half, strong that sales current additional simply only much as do our in current go or can to approximately utilize year. possible. prices we as economic proceeds believe the to into expect capacity straight for have paying spending more strip still I'll allocating because, we starting we great commodity new next in new in have a at by XX% XX%. And At in flow. can than of going we flexibility Marcellus, A To would additional the how is used the coming plans immediately redirecting of the can our fill any while point asset that utilize firm achieve will strip sales we capital capital. corporate year-over-year within as allocate you As flow by than cash XXXX cash end portion capacity. that better be current we fully forward. know, from of markets. reiterate theoretically, that increases to sense less will spending require Also, embedded we volumes growth prices, Appalachia pricing, and we to That's quickly growth of debt, by as And to out down so

north early XXXX. we're you've thing coming seen that in on we update wells, And with feel providing Hopefully, Pennsylvania longer later looking we're with little year. that forward this to important The as recent a to very to note and or track continue good next a Louisiana, drill phenomenal position into laterals. year we're provides in context. is our full wells in We a

Ronald E. Mills

just then follow-up, And as Louisiana. to relates I want to just it

and bit the fit that development the provide Ray, zone could Reds a your Upper of that now your are thoughts Pink Upper your curve, Deep into maybe, little early details how can well? tracking more As on And you Red? from

Ray N. Walker, Jr.

really course. we'll I the field study there's going again. Pink right online wells so with them to them that. that also from and think and It's offset and track. Upper that wells We're I them it, is and We're encouraged are in expectations all throughout production plans more put think but talk the Well, the forth, that field encouraged to February. to fracked good beyond pay think We there's we call making probably that. that. in have to XX completed that XXXX Red and the of do to for. sure, we very best on about some stacked several some We've XXXX got very as Ron. Clearly, that in we're that definitely tested and cases the history look area to-date And at interval, of potential we where in to we're well And we've in get the fourth quarter well forward some next of hard until reporting that like continue on

Ronald E. Mills

Great. Thank you much. so

Ray N. Walker, Jr.

You bet.

Operator

Bob Your Bernstein. with of comes the line Brackett next question from

Robert Alan Brackett

quick A the XXXX allocation. follow-up on capital

comments You the focus mentioned that fill the gas. your a some there takeaway in to dry capacity? gives prepared volume Is biggest new that on idea of you

Roger S. Manny

said right so trying I our the and of are drill think any what the higher. is slightly guidance plans But Well, just I think to formal of like pads we're as I the dry so now early, will capacity in looks to so that at and gas super-rich it on gathering stations plans by than that's and be and a was looking think more timing forth I compressor But available at what's putting this on mix optimize. gas far rather systems together, existing at the as liquids really not current that in versus means.

are Now, everything a the else would clearly, given there is also. gas better volume economics the that equal, more little still and bit dry drill create faster to we well

now, it than but, all always will But dry next worked does probably it's slightly more does. So, again, year, of be of in will that It that look sort together. right change. it like

Robert Alan Brackett

on Okay. Gotcha. And then follow-up north a Louisiana. quick

Red gets thoughts? Any think those say, Do the over-pressured? Valley to will are it you there Field, that, like Is it wells rise? one, zones Cotton thick. multiple awfully cost interval you in, move looks the there? two, of more As south And, Driscoll that number

Jeffrey L. Ventura

great exactly it's right. question, you're Bob. yes, And, a Well,

a go a or As south fact. that illustrates the deeper cross do of we see Terryville, thickening Basin you on And, in good slide very is presentation XX that in our into reservoir. fact, section

are mile on Upper close go Bs in square around Vernon Bs XXX from You square Red a some around in per XXX down the Terryville mile. areas to Driscoll focus to per and of

Upper Lower about from so of southern a Red, where it. target Vernon three The Red the Upper Basin is that in much Red has one down primarily three identified go Field have part in targets Lower development, in You to Red the targets the there pretty it. the in might

forward going call, encouraging as the those very about to very but, we've tests way and best Driscoll got of vertical result more so, so again, in we've last get go like of talking announced strategic year. this these results about blocks, about of we're encouraged. three new encouraging fault the slow about to and got we're into we some couple fault be on going in blocks talked to and going we And and the what's a We've thoughtful look next tests the look approach fault that we're very north to block wells now Field, another

Robert Alan Brackett

you. Thank

Operator

the from from Neal SunTrust. Dingmann comes question line next Your of

Neal D. Dingmann

a anything as just else or you special that Good and I talk Jeff, out the had four-well some nine, if know bit. those stuck particularly pad on in Can then over on color didn't two morning, you over little guys. XX the did that page obviously, as on day. that, on lateral any the looking, I about, slide four-well those. see that there fluid at far pad, you is a around day, results, the those those, a fantastic wells just And more obviously, lengths surfactant, XX there. those

Ray N. Walker, Jr.

models one we that and to Neal, Jeff on putting models given is some curves: color, dry. Yeah. there cluster, fill super-rich, fluid, or team targeting, we're in three the that too, But reservoir things reservoir and change Ray. I this like cluster we've they're the I'll placement, But, to team in can is public injection continue our proppant has perforation up and optimize at that that clearly, of there, And look biggest wet rates. time. the type present working add about Alan. one any continue the at think amount XX Again, the we different completions to and

just of that. I it's So a refinement think

the is, taking different. starting And look at frac necessarily like and it's that predictive different I big the that machine to big And learning. things over think basically, were clearly, old some engineer what's an of doing off. years, analytics to really apparent four incorporated then Big as variables using doing that really, and with instance, Data we've totally paying it me, for and analysis last important learning influence, three, machine been another has influence, things a weren't whole slew and

it's If over we that had that the at the are talked you any remarks and area. about. were we position; in are slides I the these not lateral and teams forth. particular my whole these thousands and to illustrate and Bs the predictive And look about just go one we it's and X areas analytics fact of the wells better back getting lengths per more some using all And more X,XXX-foot, have the do analysis in last just conference where clearly across literally talked call that do longer so we're getting

take that coming to very we're glad Jeff locally believe reaching think I going there's And these and where to we like be we pretty strategy are to it's And to his to viable big one, to we're probably I year, costs it's I these have this remarks, that a is fruition. what coming really putting looking about that. economics in at and of about of are in it. We excited think think able out so, talked trend that updating with And more all everything, We together February. so all be do see think forward. years really a And always going projects been said we're continue forward commissioning. timing, curves any The don't the that I'm, of I great good. a we've first economics for about a we'll come is really, going and online. to going we like see look and you're point there market advantage big projects see and to XX and we And

Jeffrey L. Ventura

just a And little add bit.

of lot blocky position position in the it. now have that we've particularly of nine, it, point I slide But we high-quality doing that advantages part a think trending that, you an higher coupled across northeast, that job with core on time over the have of and the and working the just Dennis is big to and to all it's entire – level, place. performance at look infrastructure in when said and drive And on at but page and the technically slide, continuing Ray we just part been just that It we of a southwest have where there's thing great that and demonstrates, play. that really a other that a Ray team that up. center important are

that core, continue plenty and going blocky continue said well cores And, drive some Ray experiment. of to continue to at we drive laterals, to and key to sweet have enables efficiencies. start what will are a is spot the longer has of big to company us to Range have think We point earlier, position see that plays exhaustion. to drill you're beyond again, and defined. to And efficiencies that these inventory drive the it

Ray N. Walker, Jr.

to pad emphasize the plant. a that is just wanted is right One more I point by again number on map the pad five Houston

the Discovery almost and lateral on than ones in there. wells those us And and by of without was early shorter ability pad a look for system there. other a to built well days those that you a a the long there. it well followed has That from it. it's for some of For the the basis. from of And, decades years Marcellus average add been right online And basically to the XX% that packed normalized have decade on of plant been course, has good anything those XXX really we been systems most – ago, time, at type above for if have curve Houston the IPs, XX% up you stacks it's and

a that that that's excited about we don't it. locations over example I see want we forward. And think we're really, great potential gloss the really So going to

Neal D. Dingmann

to that not get that would you one entail focus there, then Ray, Being mentioned to plan if that to debt investment-grade. Great on the and just out XXXX having that obviously, given could. And guys. I details, as to getting and activity about, way trying down follow-up about trying bring given or it would just as times mean line? getting about coming on. your general to think X cognizant leverage to plant and I'm Roger capacity that the look other accelerate at – today, that prices far trying in the overall given potentially with the going you Would hedges of

Ray N. Walker, Jr.

do XX% current we approximately spending year-over-year might think Let can XX% important fill the look at you less me But we that price. do start. which when can strip then than have in growth, get at is part question fact, we initially, growth, I we and the to leverage, and, noticed flow. Ron's cash gave think that, answer pipes requires that originally would to been And

have active In that, asset we addition underway. sale to

cash those two then it's things, buyer, right of sales that that and with The a It pace oil prices get important of liquids up the the where fill gas it's prices coupled patient. So and know And combination asset really growth us was with important to sales. speed end be for that below to of drive asset of we coupled asset in flow depends sales would pipes find with the the Nora. to ability on and delevering.

we hard predict that those and it's things do that. but exact place have the ability timing, in sometimes to to And

Neal D. Dingmann

guys. Thanks, Jeff. Thanks,

Ray N. Walker, Jr.

Thank you.

Operator

next from comes Your McSpirit, Capital Markets. BMO Dan of the line question

Daniel Eugene McSpirit

Thank you, folks. morning. Good

to get forward? Asking margins coming and truly per what wanted advantage are for in phase M? costs unit forward. $X.XX peak do an capacity in the from to Just commissioning the on a transport here And that competitive to remarks transport recycle revisit exactly whether an better really your costs and at effort point a that means sense going what's here. and When progression the end ratios costs of additions

Laith Sando

Laith. Dan, this is

will Rover comps a when on. peak at Looking costs, at the that time transport

peak in then growth we've gas how it the you come XXXX, in got us the to like the the first to fourth sometime really that $X.XX next And you're then see well, quarter it to quarter. $X.XX. be transport looking quickly further Coast. year. around really fourth quarter. gets in of dependent year, third if second we down of would on benefit for will saw differentials numbers early mentioned, first start looking next that to sets Ray with being which So additional it quarter. And improves which or headed it probably that drive our And out the we forward $X.XX, quarter, up had the at into improve XX% Gulf that we'll from simply And But our

increased So, transport. a improvement serves offset in to massive which, differentials, that point, to your

Daniel Eugene McSpirit

estimate? here? you your think if in what squeezed then the explain lower Okay. is, costs explains completed over answer view? your is MRD, North now well Thanks. the that have WRD well $X.X the apples-to-apples, I DNC in estimates. on the That not difference Louisiana are there stated the there. Horse comparison as as Or above-ground million really company was appreciate included well Wild that inefficiencies do would acquired, question costs, a What operations that. above taking that any costs out the costs been since

Jeffrey L. Ventura

the Well, called. predicted but it's whatever was And a remember down deal, it's down get And over to $XX.X million, I it X,XXX-foot the think we on we could able million lateral. well million million over get or to can't early first we've been I at at $XX year great exactly, looked ago, or And think a close to essentially, we $X $X.X it million, when a in acquisition, S-X, question. cost. $X.X for to I

Scott We optimized a people. basins. and is high-pressure of I think programs has different lot for a drilling experience operators board world big high-temperature who that some in of has of some big a Chesebro, drilling lot brought on in

just focused what do XX-day I completion procedures just IPs was changing of say some getting on than to people. bits, big new a the would they out done. it side. focus focus and – where necessarily lot that on point then new to and the lot drilling side, a implementing on a big It was of motors, similar We A And back more new on the pullback do. had them technologies, a systems. the new team was weren't it we So mud different

doing we're differently. things So

things designs Appalachia, do in and like like the a approaching different of think stimulation I we're in operations we XX/X execution, lot more especially that.

So to more smooth different overall activity on much I trying just long-term an the it's focused level. approach, think out

could working much out And go smooth the you forth better have it that's for two we so letting so bringing and job on. weeks or are. going And "the and we a when do than bringing before them and be XXXX continuously, really that for and can you I kind on and in frac we a really do them for said early two deal You into we months Range three way." back crew when then it them of announced where would then rather

or three two. that think right into important track next up What's I them Everything's be basically moving year. right fired running. got Louisiana. the in We've crews we'll last north week got now in is frac on just we've

quarter looked good, put online. just we very Third wells didn't many

I pretty pleased think so with there. we're what see And we going forward

Daniel Eugene McSpirit

about one to And just assets, timing? use of it. sheet. last the tell Okay. one more contemplated And divestitures here northeast it balance PA on particular Appreciate maybe right proceeds goes of Mid-Con and the the here? asset you divestitures. Guessing What can in us that

Roger S. Manny

of the balance use proceeds Yeah, sheet. to

my working you the said remarks, prepared underway. Upper pay some consider We're and as processes not when net divesting in just southwest Mid-Continent active got I look in those And you if X.X a PA, as acres. surface acres actively acreage but Marcellus, in areas, XXX,XXX Utica. – And million have Devonian Pennsylvania, northeast position consider of well like in also on we've stacked big at PA. we'd We just

we to extent going value willing good consider is PA. northeast the of that think pull a to some we value somebody to we pay get is a as while the not have for well. us for that Mid-Continent, and then And So have we'd what we're forward, to something

Daniel Eugene McSpirit

a Appreciate great it. Got Have you. day. it. Thank

Roger S. Manny

Thank you.

Jeffrey L. Ventura

you. Thank

Operator

comes line Citi. the question of Bob from next Morris with Your

Robert Scott Morris

Thank you.

that northeast, in that growth, total mentioned corporate the year would that capacity corporate for had of the growth XX% In year You for imply growth imply to end that fill next Terryville by the what XX%. Louisiana? does

Ray N. Walker, Jr.

year, more about a saying two-thirds we this of this what next to Louisiana. third late actual early about allocated distinct year, year our But is, PA we're guidance. north to capital and we'll and by Again, give

the two again, results areas Use advantage good capital – fill north and the to results areas. Louisiana in of flow both having having over-allocate of help probably We the expect we're But good some that pipes on, new we'll pipes. given cash – to Marcellus. coming

So more timeframe capital there. our be the be most give year, is color disproportionate typical for We'll year to would we'll which budget. late more year, growth early next allocating PA this because you with out next likely, coming the

Robert Scott Morris

year I many or on rigs then expire. many write-offs Okay. the And expect XXXX? How in Louisiana then the keep in to in Field there took you two hold Terryville you running you acreage next frac And many incur think now? further going you're forward need is now average and you running, need anticipate and you do to for will to crews north acreage the rigs three some it how expirations? not then acreage do how write-down to hold any

Ray N. Walker, Jr.

can I those see points. I'll all Bob. if Sure, hit

in think three been again, rigs. it's year, happened. average I of when frac five compressed this Terryville different at we'll around to up We've kind crews probably But, timeframes periods. had they've in

five rigs right So running we have currently I now, right think now.

for running crews fact. frac a three I do have know there. that We

for we're not like kind steady similar little this crew see where alluding out we're plans frac would activity if I less be a think something year next come guidance Appalachia to crews, or formalizing next a probably year. And now, we'll those year, at we that. around more early most late with was formal it will not probably pace I all average just year And Again, now. where – but it running will of that's than think of year, Jeff the a we of probably little more. to, right right hopefully but one now. in it's

Roger S. Manny

the Yeah, of The so is Bob, expired. ahead actually expirations, Yeah. these expirations, these haven't taking we're Roger. this again, impairments

acreage, we would have there's look Range direction peer a capital. proxy caps whose are acreage when total our of have than the or comes higher less market point So that I Louisiana. optionality forward our our whatever lot we out in going drilling of results group, if to when changes than what it But peers north you four of that positions at have

we So for about at acreage the us. We're plenty move needle there of concerned all that. not have to

Robert Scott Morris

guess good. hold Sure. quick wondering just what anticipate I understand expiring not many there, just was needed I do how that's then just you but you I And one to that. last rigs question.

Permian? market from, up that results couple say, it You Is frac tightness Or that the just crew other late? that having other that like in the said that indication weeks caused some and late. of to that to the factors the of is come be crew place showed any

Ray N. Walker, Jr.

Yeah, there's no doubt days contracts. of from of going months. Don't through in or And last together will That's and XX together next New part hauled awarding forth whole tightness. and days that the there's so plan the to lot going present probably were for and a that formalized every up over or process our that crews and over lot. Texas, There's on to putting prices have bids happen we're so. have of to on. levels that's the so putting a us now, left Right the that December Mexico, board expect West and basin XX to activity change the

definitely XX didn't ago. the it's to we we us when up had indication as tied for think thought what than it quickly talked it just thought get that. I and another And that's days was, longer operator about frac crew So as we of simply

in business lot oftentimes. know, As this change you XX in a days things

Robert Scott Morris

Yeah, great. you. Thank

Ray N. Walker, Jr.

All right. Thanks.

Operator

the We of are nearing end conference. today's

KeyBanc to Deckelbaum David go will final question. for our with We

David A. Deckelbaum

long-term conversation. a I the things. on flows maybe said bit delever. at times your of free opposed even the around to of be little couple philosophical to I to going option guess to beyond should I'll want that where to a just in-Basin and to focusing million significantly perhaps a we two, dictate levered. obviously once you're should think that wanted fill the you'd guess would will get steady to One, harvesting full up At otherwise, about be full cash more capacity you philosophy you capacity XXX wire Jeff, start it ramping thinking to X I But spending Appalachia, of plan capacity? the hold just accelerate. beyond under that some want we there's that more be XXXX guys. the Once to cash is considering below that on Range, as point, point out coming you to Thanks, more under round growth understand incremental capacity continuing unless start that for here. here full pipelines But, stay capacity? you pipe the commodities that with out Just comments. call

Jeffrey L. Ventura

Bs early great is, part important little year, I our plans is think we're year-over-year a flexibility. great said, to years. Again, again, flexibility think on. year, lot next coming coming pricing. XX next forward next Like and play And can couple of out do But pipeline no strip that for there's key a late over the growth, projects clearer of southwest the come maybe have I this position with in to in one, when we that. we'll you a vision year, the new less we than with at the then, have cash capacity flow fill part past XXXX of Ray XX% of just pipes the the look and additional we

the an of flexibility. we're position, But think the a or position the high-quality business that in-Basin, think perhaps up for markets. there's product drive will best gas way, plenty sell costs unit reduce peer-leading of in either and company, pick we some because with it to oil better lot in we move our one of So, help which of ratios and that or of to availability great to recycle a or down

David A. Deckelbaum

Are value guess then And assets non-core considering the everything or is outright some JVs that. it core. is table outside to considering appreciate try I I around the developmental MPV? you comments Okay. bringing core pruning within within the of perhaps of Or maximize the sales? to also you forward the are on

Jeffrey L. Ventura

what to Yeah, are we're we open I be. would think we're open-minded and saying that is what

northeast be asset the value forward, there or method some certainly open extent in the got to sales opportunity But pull out that. we've some PA. to the there's we'd course, Mid-Continent, Of to

David A. Deckelbaum

Thanks, guys. QX. And best of luck in

Jeffrey L. Ventura

Thank you.

Laith Sando

you. Thank

Operator

This closing the to I'd today's to you. Mr. concludes Thank question-and-answer Ventura over turn remarks. session. like for call back

Jeffrey L. Ventura

morning. Laith time free Thank have. we be to team say rest appreciate comments to to the want really everybody just taking and with I with us on with the of this the call additional might any follow-up Feel you you.

Operator

Thank you conference. for participating in today's

disconnect You this time. may now at

Range Resources (RRC) 25 Oct 172017 Q3 Earnings call transcript