RRC - Earnings call transcript Q1 2018 | Range Resources Corporation

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Operator

Welcome to the Range Resource (sic) [Range Resources] (00:07) First Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Statements made during this conference call are not historical facts or 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, Range Relations Sando, Investor Laith Vice at Resources. Please go ahead, sir.

Laith Sando

Thank thank you Mark Scucchi, earnings morning, Dennis Degner, everyone, Range's Executive will Operations; Ventura, Good today's quarter and of Jeff on call. you, first Speakers be Officer; are Chief who SVP that for operator. joining our press call and three a chance CFO We'll had release updated some at slides you've and our of on weeks. this Annual Hopefully, we've investor be referencing morning. presentation Meeting website. review the posted in the to named

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

on over also posted the Supplemental other information, Tables we've calculation For expense and information let assist turn products. the for hedging EBITDAX, transport you Supplemental losses, non-GAAP cash of Investors and in website additional summarized calculation website With on and include also realized on margins, the find tab. that, all gains can Tables to hedge call pricing assist The under of the information with detailed to measures. our To Jeff. the me

Jeffrey L. Ventura

sets details. Mark we've objectives I'm to off financial Range Thanks, that, over turn to progress and say start Laith, executing do to work that on when into you to far and place provide thanks then support finance the morning's and we I'd potential the leading translate we a speak it going of and to before and I their bright ideas we comments XXXX us new bring know Dennis to energy, Mark, at believe resource Mark outlook. I made ahead tirelessly and a I'll tell operational is value. in is and shareholder I incredibly I so good team But for team on like have everyone Dennis that have on call. for in future They to an and us. and Dennis joining our Range. excited XXXX, skill class-leading Range elaborate entire few to on positions, the this the here five-year in operations that have the our

on couple Before quarter, a I'd on to five-year ago. of talking the like touch the outlook we months specifics introduced

feedback lot received our have and firm commitment discipline regarding positive de-levering. a We of to capital

and our the pricing. try It crystal are five-year capable we for represents the assumptions what estimates benefit towards believe gains and are the end of (XX:XX) it's path represents. position. driven to asset it of like make clear what I'd conservative The outlook by what Marcellus resulting However, assets efficiency XXXX And de-risked are based without high-quality outlook on year shows leverage lower sales. underlying strip and

However, not this our plan. is

pretty filed in we value by own our dislocation between equity current believe, profile. We laid out reflected And of the see portfolio. our as management that Our our below and an in in by plan near-term high-grading currently month. our leverage times and Driven, the underlying ultimately accelerate clearly incentives monetization earlier assets process pursuing our sales is this process exceeding business. targets. significant near-term and we X processes would investment-grade the investor part various move thresholds times, the leverage short-term de-leveraging a have underway, getting thoughtful of We under-appreciated leverage of the we value our to targeting goal towards support goal portfolio transactions the is of continue non-core in sub-X and proxy of the inventory

flow. both capacity was Helping represents pricing Obviously, price the Devonian using significant differential flow able and a higher leading this better Valley. our NYMEX, pipeline to Midwest Utica, basis production For locations and that with several consistent and the at cash Reflecting Upper as behind of cash quarterly proved leverage square reserves. of in price this record addressing the in Marcellus portfolio past diversified plan a take Lower upside and our disconnects strong prudently advantage $X.XX I over an the NGL with versus natural our definition, currently SEC combined PVXX differentials meaningful Range is to believe quarter one on team. improving Range's improvements the first to both execution cash last years just of and is proved and Range's driver strong additional of believe was to margins natural and to And E&P share enterprise year transportation, discount reserves we we and gas the significant Cotton should to the begin our drive cash realization in value per than thousand The our reference, marketing in see of continued gas Northeast. those largest value active valuations. excludes flow of top-tier quarter, in today. three

out Our last capacity future over the building approach for up firm many success. set Range take-away thoughtful years towards has

firm X.X currently of part just approximately southwest Bcf day. year. natural To of you, on in gas last in And selling the in natural Rover has per under for Range Looking per capacity current quarter. service Range a transportation Energy fill the gross Transfer's compares project represents by gas. X.X this fourth this that expected This forward, Bcf to basis. the Rover the is sometime expect Marcellus is our firm quarter commitment day of capacity of for frame the that be we made to to second

we of selling remainder per the And the expect to our will Range So commitments. And our day Dominion we capacity, spending to shape Coast our those into MX in move we're When throughout market be as simply difference in we This from XXXX. approximately million differentials (XX:XX) capacity better gas what provides Rover as will Range set much Gulf and the deal (XX:XX) $XXX of XXXX. local Southwest, markets. is have PA volumes local firm of Appalachian we'll the filled in currently the where puts starts, Rover grow heading natural in plan to great flexibility the fill Midwest. in a great

addition barrels our oil. natural the In condensate we per produced and XXX,XXX to gas day production, and NGLs in XX,XXX of of first barrels about quarter day per

in to of NGL fundamentals. pricing to the amongst in being top gas E&P So, improving the one we're significant companies in three country, XX NGL leverage addition top provide oil natural of one which producers the producers

improving and condensate all or stable. Importantly, our basis for natural gas, NGL are

think for I things worth the noting, more operations there on are quarter, in touch several Dennis and at detail. can Looking them

challenges production of First, marketing, midstream and processing field. maintain partners for X operationally. you to efforts Mariner between shut our down us pipeline East as and us most created But with planning allowed operation teams from collaborative know, working our the together the

the drilling to in and transportation but on Like produce the gathering, processing, in year's pads. on result wells. cost to the to on see XXXX in going go-forward Second, also time, these we've gathering, margin up to Marcellus. Improvements half our This team for improves half forward, as cost, infrastructure going capital-efficient. the of of it what this continues become team using we're this cost about reduces phase in be development should only you'd more is better and been talking well some of activity in not to the second existing expect existing our

noting, later XX,XXX more around two our for each. by so length are in EURs meaningful feet to longest XX,XXX plans at what results year Pushing position a curve, this with longer these well benefit see that extended our land XX%, recently drilled Another if average is beyond Marcellus mature type our five-year are the the normalized wells assumed is approximately in laterals would these line in feet our our and with but expectations. development that this improve wells allows lateral wasn't laterals. it's outlook. from We've laterals But produce We'll efficiency consistent potential. our cost worth returns

great like gets happening that the Dennis new then underway. chapter things call turning at a we XXXX I'd as And to Before Mark, reiterate we begin over to Range. see and

into hard that high-quality again believe our every company top-tier to We we're over shareholders. discuss valued diligently call to turn for a I'll as energized to going Dennis operations. day now a inventory E&P truly and I to Range all value. team have our see work working reality make shareholder the reality, an we'll translate our that to

Dennis L. Degner

Thanks, Jeff.

be the with Marcellus. Before to highlights, world-class of a Range. delivering And I I'd in exciting a a operations this team long great first to leading we time at here We've is results. have de-risked, in begin a Appalachia record asset like got really track say quarter

forward. company XXXX high enhanced design the that will the renewed continuing approach. on also day every build as drives focused we to seen are team through North the history a expectations upon the Marcellus late technical and in build improvement have Louisiana, that new on completion We In

X.XX at exceeding came are at QX. We for quarter, Bcf be with mind, month turned second in them to as full With setting deliver wells, sales the our per XX And in look XX X.XX Bcf year-over-year sales divisions Operations to of QX. line guidance X.XXX both wells first XX% the ahead, to in in full are wells. of quarter in swing will per equivalent quarter equivalent in during day, turned total the in day, day. activity guidance is a per alignment plans result our Looking majority in second production scheduled XXXX production these we Bcf we approximately at equivalent the with on of the last on growth. of which this combined

towards year Our XX% budget last with Marcellus, directed million, $XXX as call. at the the discussed the capital on remains for being

quarter, the at our we'll highlights the operational with Looking division. start for Appalachia

QX, longest success at XX,XXX drilling over our build longest Marcellus the the As mentioned, upon just their team Southwest, company's laterals feet. drilling PA with by to in continues two Jeff well

has to sales to We the call. QX sharing and the Overall, faster third at longer laterals forward on turn a expect X% pace XXXX. wells in XX% future team in quarter our per results average look the the to versus in drilled day these

longest, call partners With our has and team be line offset to the producing team prouder cost remain the quickest, of couldn't service most in these We with wells. the last small increases are guidance able service well efficient February. in been the ensure costs efficiency provided that and we and from the gains,

While we than and This stages for XXXX. completion or a well same to really more complete still us time this an QX into XXXX. the completed winter ago year frac year, up XX% head in to team able contend wells to was translates X,XXX successfully compared sets XX% conditions the in with increase

wells, wells wells, the from wet to super-rich XX% over our per covering second our a will In million the sites, turned during quarter, The pad IP three is cubic was and feet area, three five-well and be on example which on first XXXX lateral quarter. the equivalent lateral performance two the with of a turned During production super-rich we initiated division feet XX.X these acreage. from of wells type links sales pad liquids. two of and is in remaining to pad, on The average nine average an comprised Marcellus well plan. great XX,XXX this the of length sales day,

with two to pads all These in facility curve. are are the turned Similar wells nine were constrained conditions. area. line in reported, in results other prior under cleaning the normalized up to are nicely wells The quarter and flowing wet sales producing type

performance on back Before of look XXXX. we I leave operations, some continued wells of drilled to in Appalachia late the wanted

with at million continue average As performers per above cubic with curves. pads day an five production feet type each. a reminder, produced be XXXX or our in wells equivalent that to line strong we These in had XXX

Also, the in pads further were a are wells over And XX,XXX lateral these the five that cubic day development. drilled from pads they long producing contains XX% the of first of supporting type produced pads One production. our today, drilled XXX to million above existing area equivalent dry feet. feet curve four with

from years drilling our processing represent our Like have facilities, in systems. we Houston also back today. for the operations pads upfront and gathering efficiently mentioned, repeat of And capacity, is ahead. pads use was of existing model XA additional as in as to this capital normal become course this which existing and a of program. scheduled in service a business Harmon saves our Going we completed pads saves XXXX, on County, it existing the this plant, (XX:XX) quarter full team. XX% plan with for costs Commissioning support the plans is go-forward much not plant costs for as more MarkWest Creek only processing the Jeff year could will where to first operation development to in in roads, be Washington along Northern This later our

year Now are year prior division The with more line The our the remainder one active will Consistent with to we four now the on crew rig completed discussed North the with seven active wells running rig. in stay this the be four to in Louisiana. wells call, started plan plan with year. rigs and line and as frac turned to turn of the the for with needed. quarter, scheduled active first in this

quarter placement first normalized at to due wells improved as forecast type but new design. early, the look well the Terryville their Our are results are curves, or well producing completion at we and above

The our driver recent work results, is ongoing for translating performance. the Cotton company-wide goods. historical both improved plan. design Last XXXX As is we front our with completion team well by look the into around an is Louisiana North in well key to intensity fluid on technical Valley and proving item the a Range's be Lower operations efforts at tubular

Drilling To current Over ahead transportation at cost and we're helping as moved ball operations several supply you. laterals to to of start spot tariff quickly mentioned In needs our the this earlier, setbacks. targets late below great have tubular in with returns temporary continue and to this, the to Planning large ensure off a flow efficiencies the despite chain in goods. increasing an efforts XXXX to improve a get cost such XXXX. market. of XXXX teams production around cash coupled we in months, percentage change record attempt and our and secure a surfaced low-cost past impacts over tubular operational operator. hitting a are oilfield summary, as Mark, advance to to impact, discussions

Mark S. Scucchi

Dennis. you, Thank

which with those to flow share. was by XXXX. quarter tangible process, quarter rigorous underpinned allocation increase X% translated per to prices and effects approximately was highly of in the The of increase performance. level equivalent natural level price same cash Range's wells an realized keenly to XX% corporate efforts and dollars year. directing an prior to compared higher we into cash production Jeff highlighted successes, gas including evaluate diligent are realized on increase quarter, having in diluted prices, over first and quarter the an in $XX hedges profitability quarter translating and XX% mcfe, declined by focused Dennis over $XXX $XXX a costs, from returns returns. competitive X% project first As the first first operations driven part absolute despite We're and quarter EBITDAX operational year. of commodity flow resulted rates of million the cash Efficient fully per of compared same first return. increased million, in flow the Increased quarter cash Average prior transportation NYMEX marketing in million for increase XXXX. capital flow

out our advantage of temporary is volatility. were brokered that benefit some quarter supply, portfolio winter opportunities. brokered sizable me to using Something and Range's By which of book, saw we gas is first market optimizing the This to the stands and quarter to able in be take winter and benefit transportation some shows our driver it volatility in the first opportunity. an to of difficult episodic dedicated for since having book million was marketing. brokered would replicate, team net the the $X XXXX the in-house gain created But behind of the

more an of new timing-related of these certain In and is the number our also whereas transitory first of and due expense Looking gathering, agreements, non-recurring implementation Comparison the we about workover costs the to administrative contracts, costs new are the expense quarter historically, expense costs, item, in and result are hauling, revenue XXXX $X.XX flow. associated expenses, periods LOE equal which changes are gathering, function completed accounting now of unit The I'll a cash XX-Q in by costs expenses ensure excluding for wells of and were brought and General end have our revenue. impact were the reductions transportation to XXXX. equipment apples-to-apples processing, existing on-line largely the quarter no during of certain touch beginning with or margins X% increased significant processing due of due for changed the compared these water this applying shown and to in fourth standards The transportation and $X.XX standards. on accounting presentation done on items. increase to processing line a of unit which results moment. Total with leasing, to processing for in change to accounting at prior costs require is by increased in on and in adjustment impact press the quarter. of treatment release. items financial will line basis, up to

GP&T and please guidance the For company accounting under with the current first XXXX, GP&T in expense expense revenue a of our line for refer presentation reconciliation side the quarter to and prior XX was standards. before in the accounting change,

direct Looking expected press our in to release ahead, you trends on the unit costs. and provided guidance I'll

of We changes unit continue costs, influenced expect firm GP&T the our us behind contracted timing coming by on-line. unit capacity and to transportation driving transitory with costs final impacts in better

balance Turning to sheet. the

still productive first work the to a structure from have quarter we do, perspective. While was capital

borrowing scheduled associated our with lenders. base of our revolving credit group our agreement quarter, the During existing well redetermination with went

previous maturity lenders We scale agreement. the opportunity April credit with to the asset of facility, borrowing terms maturity renew XXXX. and used to costs quality base, extended to the to essentially facility and Due this credit date our the on extend its also equivalent and of Range's of

not we liquidity structured at Range's debt-to-EBITDAX by was of with a and result improvement is and our (XX:XX) maturity measured the maturity times times of year XXXX. debt profile the end Leverage X.X a well ample the the from As as first maintained X.X slight quarter, until have extended end. this renewal,

before, diligently sales we We're I debt. proceeds are initiatives reduce to asset work and monetize to meaningful still certain to our and assets and working to toward some have these leverage do those As achieving yield expect these mentioned targets. negotiate use multiple to pursuing progress we actively efforts

shareholder below financial safe, inventory to existing but a is In objective with management, to objective of and focus resilient closer predictable And leverage whether to time, yield capital and underpinned future foundation a flow. cash efforts. vary have to into times. is Range's be X cost-effective maintain returns. success when Jeff, shareholders success coupled with to into summary, Range's drilling our longer-term leverage or our converting believe achieved disciplined returning near-term structure will efficient allocation is view, process. flow thoughtful capital the we by operations on tangible consistent debt those repayment, From is drilling, deployment Our times. point Drilling of to will over you. rigorous cash a growing will cash it back X

Jeffrey L. Ventura

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

Operator

Thank Mr. begin. session Ventura. you now The will question-and-answer

as call (XX:XX) Standard Time. Eastern permits will And comes as the XX first at take of AM Morris question many until the end questions with Citi. We the from Bob

Robert Scott Morris

first Thank you. Dennis. for My question is

Since leasing tightness are seeing pressures in – you're the being that related mentioned is some is equipment cost partly side, unit the in also are system? where pressures? what mentioned you you for seeing where on hauling cost the so operating some water Range, but quarter, higher higher the or cost You timing

Dennis L. Degner

of cost regards quarter were working really more versus in carried Yeah. is off toward Net the of And lot from in we unit fourth the the our pressures. It's some production really haven't really really that first really Bob. line we service-related end we're the some that turned a seen part really just year. success story seeing cost. quarter. What is water wells the of of question, hauling Great now into

Robert Scott Morris

you'll pipeline going on-line. firm question Okay, your second is you're project on And final have focused thank you. to your And Jeff. I Jeff, then, my for transportation this know filling be capacity, year

something wanted as beyond oil before ramp per X.X Permian filling to consider you and looked or in thought the And talked to if you you being in the flat if continuing You prices – would than after what shareholders it to the contemplate? But you this somehow what choose about where come you production (XX:XX) hold year, does into to look day. at point into Basin, to plan, holding flat year? rather Bcf take given and the end, might or production do able in grow, so to capacity, the your capital were five-year just sooner, returning associated then, places are that like this would or your beyond ever production valuation process

Jeffrey L. Ventura

Well, yeah.

are and gas we we've the operate to over out we'll there, within a job constantly for cash different best go way prices our prices. for we know shareholders I flexibility of we'll look happens to the things more lot oil five-year what that spend when And post-XXXX, look at at the think period. are some do NGL to and and what's we back to can have optimum all sensitivities commitments fulfill prices, those Range our that we'll And commitments. flow,

at So at The be flexibility news to sensitivities. the that high-quality those we have multiple we'll all look those And we the all good we'll do things and different looking assets. so ability is have things.

Robert Scott Morris

Okay, Jeff. Thanks, great.

Jeffrey L. Ventura

you. Thank

Operator

Goldman line the from comes question next your Sachs. of of Brian Singer And

Brian Singer

morning. Good you. Thank

Dennis L. Degner

morning. Good

Robert Scott Morris

ground Can And de-levering versus assets to you free the the assets you process? cash of cash given much sale a – or the how asset is give free there on up bit weigh that a need actually more flow sold generate don't middle being color from are de-lever the flow?

Mark S. Scucchi

is off Mark. others and then in. Jeff I'll start and chime this will Brian, Yeah,

leverage would course, have initiatives sales the what multiple Range deep point, a at resulting is of inventory assets impact news The price sale is, your and be. projects good has look to consideration of a and that monetizing as underway. the asset on we So we

no potential, the schedules, so there future farther current out some are is impact flow. on significant have Some drilling cash

significantly and have flows. because, material to corporate contributed respect flow might not in our looking had wider – backwards, impacts Some cash or basis cash have differentials modest they any to and have

price, But convey underway, stock kind that opinion. reflected an pulling inventory multiple still schedule, And going the have be without that specific may to maintain each valuation may it today that not out be in our currently pull you're altering laid dialogues In harming our in that monetizing high-quality multiple debt out punch it by So, opportunity further may asset. reduce of on our company inventory a schedule basis, have and we think, forward of we and that fronts we're much parties, drilling and those the the to the all the some is the of be monetizing or on to I is interested line, potentially far NPV trying drilling so on, many, question asset many out assets. trajectory the years five-year respects, and sales in outlook.

Robert Scott Morris

Great. to delays. the my Mariner very arrangements from have. a and Thank regards and then, Obviously, with X the And the NGLs agreements impact you. marketing is follow-up slight was there you that

and or exports, to still Beyond have from further of relative you upside ethane achieved? that, Is we relative and the marketing – upside expect there agreements most most should that of already been see the that through do – has both others and NGL that propane?

Jeffrey L. Ventura

further there's think upside I to that.

we we believe, driven will NGLs international go exposure and some in coming by this demand and a in have you part some ability good that West, I crackers set in if different Europe. propane, – – benefit. are be good of China, think East see we're and robust – ethane to And, with from from by new back had Internationally, we all the – of we're then, the it to weather a – U.S., lot on on up, are we for ethane think our outlets, the have the to course, export of we're helped how exports I Mariner a here big on. which winter, able we markets that. And Mariner even demand

a This propane prices, a absolute though even about look currently gallon. $X.XX was some. of On down on is as time propane – WTI, last If $X.XX year, basis you a a at percent gallon. they're an it

NGLs stable So, to net WTI kind relative in Range on our side, when we improve and expecting think us or back if basins. and our other gas, (XX:XX) be you position have think at to even good of look the it's even other pricing today, important on companies which a look puts where and perhaps relative NGLs from natural to I we're we

Robert Scott Morris

Thank you very Great. much.

Jeffrey L. Ventura

you. Thank

Operator

your line Arun from Jayaram. question of comes the And next

Arun Jayaram

or articulated maybe some is perhaps years natural But was A&D perhaps next look for I you today, not on a Yeah, could that the guys have bit gas-focused your good more Jeff, wondering, assets maybe so. guys some assets? be block, about morning. the of you your I you opportunities over in the And to A&D seeing inventory of core comment in so XX even on at elaborate market. Appalachia wondering, to the if was Mid-Continent. selling little you're looked some market having obviously the developed if assets could Northeast just what talked you

Jeffrey L. Ventura

Yeah.

And the have most levers what assets of makes all good well, pointed our pursue of ever all I out, sense. of consider multiple think pull. those. we the you We'll I think and news, – just we as we'll course, can

good can we assets. So the high-quality to Like out the have and scale news said, think them Mark is those the inventory, we we I in Maybe have the huge pull extent forward. are future there some a size because of quality. of and

focused find processes underway. right of we, And Mark a believe multiple on disciplined have somewhat So, – to this That think in you you we're and said, we we have I like said to to year. high-quality order people. I accomplish the think significant have earlier, really can the assets we end buyer. – asset being by sale And that be have interest will it's

Arun Jayaram

and you on that the Fair as ideas as bring comment a can over table? now think enough. your whole, the any was take I new style Excuse wondering you me. and are if Dennis, leadership could operation you that leading group you to

Dennis L. Degner

happy to answer I'm Yeah, that.

new now with and the an is role to of in time eight Appalachia of at almost years this my with Range, now heart. past, one (XX:XX) things kind incrementer the Over I'm moving is teams continue And and enjoyed (XX:XX) take for us successful. watching and we to successful be what and I when upon that month-after-month the repeatable have ability the year-after-year and build really to

think efficiencies the out links a side able been or about when we've I few lateral over years. to notes completion achieve capture our we that's LOE levels coming on that talked that today, we long or like last in

phase As line is, capital-efficient now like look of outlook, looks think the that the do our I five-year and being outlook. with in what at next look at are we five-year how next chapter we efficiencies really

from perspective, working really try capitalize I'm the a leadership team to forward to So looking that. on and with

Arun Jayaram

lot. a Thanks

Operator

next question line KeyBanc your Market David comes from Markets] (sic) Capital Capital [KeyBanc with Deckelbaum the (XX:XX). And of

David A. Deckelbaum

guys. Good my for Thanks morning, questions. taking

Dennis L. Degner

morning. Good

David A. Deckelbaum

pursuing that plans buyback of – bridge is squarely de-leveraging things of Range in in de-lever? gap? had prepared a it And focused what around of you in to Jeff, I I you now, in largest that pertinent is right quick that just to the address of is market term? your do talked Range an Or discussed. – potentially to interest have about I like do share comments to see order for think how potential And M&A a disconnect using you know to of having follow-up. two the you five-year Or have wanted before guys questions I kind you plan ask that. near thing One, intention valuation do the on some then, proceeds now. what's the of guess most some take basically care opportunities there's the like lot One, in

Jeffrey L. Ventura

Okay.

to regard. in I think a Marcellus, his then that disconnect, some Mark Let – me of thinking I'm from long in he's quality I excellent and a thoughts. we think you about to Range our that's bit more and Dennis up answer flip peers, it what look bit driven to We're I lead CFO time the we going start new But little at with heard at yeah, going it. have assets Mark versus look when when the hear back you the you think and little and our

ratio. recycle of the leverage at times, they're head I helps to What's some per I bit come when X.X – high. class relative driven It's is at peers at think down think little what's still looked and it's our but you disconnect, high. different, what or per EURs of cost thousand the is a thousand, the

goals leverage get So in our be you this our can to short-term the for X even that management to And see and year. it run the compensation, times. we have it there a being below need we to short needed where we run in in hit short in and target

up different and that, below I flexibility. we're X underway. So we it we get different focused have on times, options opens Once processes then think intently

turn me to that. Mark Let call for the over

Mark S. Scucchi

Sure.

the into our So, think directing and which, of a developing Marcellus is Jeff strategy into development. forward the next point. the strategy decade financial present, can integrating of impact at touched item on look a we material gating really kind valuation kind that phase this company as have in Mean, and leverage. in at We operating we're of this

we're where point customer and done in and So at phase the effect, we're the commissioning optimizing optimizing sales infrastructure, relationships. – is

We drilling efficiently. continue wells operations and optimize new to more

target in what have decide the of the mean as the you as much operating have that dividend? five-year leverage possibilities these a discussions that times, bring and options some generate, intended out times, active (XX:XX) the or in strategy those in board in possible together But, of have that. strategy, can to maybe we terms what as Does you are prudent durable, change as of X of to assets sales outlook get profile mean and timing think targets is, as management, we've The the the below Does out, out of so some fashion As Meaning that your once immediately an laid and So becomes what a cash as shareholders table? getting we, a in to de-leveraging returning form the and numerous asset far, share more are the a that. X a that buybacks? pointed dialogue. said quickly, leverage about we financial and are range. the below sustainable accelerate laid time we times prudently

how words, to to accelerate we in shareholders. and consideration to in de-leveraging effort format on serious our return should So that as give capital other that what and ability when accelerate also

and are those sustainability the (XX:XX) around new those function making of prudent of all durability, timing, So under consideration. It's decisions things a things.

David A. Deckelbaum

some that All deals and conversation sort of areas Or just you be agreements Marcellus components program? JV other guys right. inventory potentially that – any or outside One, that potentially components presume have you talked would following-up you on I considering zones the that. underappreciated upfront some about The would could that necessarily I I cash would accelerated the for cash considering monetizing be large know within on else's not core. should before. be development two, where actually guess and Marcellus have the are of guess, somebody I capital? enter you with

Mark S. Scucchi

your million effective leveraged, in core the to opportunity upfront there on, most of this of would case. measured obviously, with intention acreage the reduce To the what you're stacked-pay debt-to-EBITDAX be, and point, is though, touching X.X and bring debt Southwest, de-leveraging acres. in well some the position. It's PA in as proceeds Well, form absolute our

a set inventory. So long-dated it's tremendous a drilling very opportunity with

So ability any point, using sales, else's forward monetizing capital. your ways to number either there's acreage of some there's to that and outright bring of ventures, joint that, somebody the through of

general open company different terms, would So the is that the (XX:XX). a is is The are asset considering that what in what to principle of I do of and on not heart structures. say, core number our key anything to complicates we

David A. Deckelbaum

the Appreciate Thank you. comments, guys.

Operator

with your And the Mills comes line question of Rice. from Ron Johnson next

Ronald E. Mills

on But those the assets Good a shifting comments morning. Thanks sales. to for Dennis all minute. for

because Is potentially Is area to What some you feet. overall well longer plus dependent? long asking of you are see I'm – the talked the drill? more of production some length the longer your gating moving items laterals this history? the some lateral or laterals. to year of want it development? in it of You I of your up minus contiguous as sets is for about as have productivity XX,XXX improvements positioning

Dennis L. Degner

question, for the Thanks Ron. Yeah.

principles we increase one longer be course we numbers to lateral know those repeatable. that point, fairly confident we is successful and time. of this that over of development be us at for What think to also continue I the to fundamental continue the is with to advance see the ball

standpoint, a versus the production with key this will record to approach in numbers. advancing at those be So to our methodical and lateral and we year-over-year line type projections. point From good leap close performance a having curves our has see trying links to been really

is as From same we projections our well, challenges pointed execution standpoint, our also standpoint, out, us at, when performance areas both impeded. up to to So as the well competition we continue outer what align contiguous thing, seen any you the from see We are. advance the have a we haven't and longer move continue confidence we not acreage really that drill you position with going drill an that really heart of field and we being and it sets the to our development. as the have, to lateral in look links

Ronald E. Mills

provide presented terms great. on about in the what past? productivity, can are of X,XXX of foot at terms there you productivity in least as doing lateral Okay, And feet. And any is you a per that's talking in cost have per you lateral goalpost on

Dennis L. Degner

our a links line do is Yes, the productivity So, first on with that in projections I'll forecasts. see start well and shorter also we basis part. and normalized with the

So, we've other apologize. question? got of a What there. the was I confidence high degree

Ronald E. Mills

question was or on kind you the I well lateral? foot, bigger What's efficiencies well productivity what side. are seeing cost drill one a of the lateral would – just, efficiencies per the assume per laterals you improvements the same The X,XXX as longer other foot is cost of with on of the

Dennis L. Degner

XX,XXX also slow seeing longer. look improvement. regular A, I to don't change and not Well, I point, get see we we're on It as we're mentioned that improve seeing basis. foot at of makes of lot we're starting feet, is to the you're reference sense. a what's somewhere but X,XXX are going because X,XXX significant the fastest you're in to lateral, just that rate team longer down. here's of our drill repeat basis, a XX,XXX wells. whole And But see of like? we seeing what And some What's ultimately now it the we to upper beyond once – on in earlier, neighborhood a this to continuing get some days also think of, limit driving foot drilling as and knows this. anyone record our

a we drilling the how that as wells, total from fast it also we're cost all look at So, standpoint. plays into

on where dollars end the seen I like. So think we've foot don't can we think the we're per lower close yet. And look

Jeffrey L. Ventura

them to more now. go introductory Ron but feet, wells was of comments. back XX,XXX couple my talked I'd We than little drilled got about a – we one of We've a And that.

costs yet. haven't long extended returns that by them with line if are they the EURs produce and laterals, But the We about normalized would curve, type completed improve laterals, both in our XX%. well

So it's meaningful.

Ronald E. Mills

up I And Great, terms the June. thanks in year, being windows the completions. XX-plus guess, – more in Louisiana linear? three your do in then, Basin? follow-up most including second wells mentioned to the for there. across the pace look come spread completion of does second the I half the evenly XX just is in of line first in quarter, fairly turned those on guess of Are Appalachian completions quarter, the as And of my then, in which repeat in from the Dennis, you terms we become,

Dennis L. Degner

look we the the balance as there. start over – of year Yeah, I'll

XX% We of focused the have dry will about XX% activity our be on basically – to XX% area.

a So look you can Appalachia. it's almost split, you say when XX/XX at

segment. we're the dry we'll the quarter in the bringing of very balance for going be similar area of this the Over second but mix, next toward stronger the to focused on a wells be well of will some particular see the quarter, reporting end that

Ronald E. Mills

much. you great. Okay, very Thank

Operator

as with STIP focusing the on that goal (XX:XX), comfortable or from to Macquarie. (USA), Inc. a good that And Could Paul then on viewing that times, fact should line there your guys some we and Grigel one, X.X is reduction the Macquarie color of that, threshold times, proxy morning. the be Capital comes the really you're is beyond you And below the top as more X follow-up that? debt - should be Grigel further at question next Paul leverage? provide Hi, focused

Dennis L. Degner

your changes in management for set the measures, in try been To have that enhance have company's all levels as new as – team a proxy well objective is point, X.X a to So between management number measures incentive near-term to of hitting the been I'd leverage level coming the objective along to to that's disclosed times, over interest. our objectives, below with linkage longer-term go the made think of incentive set been incentives level your goals, other the at shareholder of a Those desired point, are a times. times. target back the excellent and at of of being but being I comments one-year X with high-level X year,

sizable our in haul. (USA), the objectives and achieve as those and longer sustain to Capital Grigel targets hit near-term Paul well over as the And Macquarie order in fundamental are just Inc. So - on push that Is pretty just shareholders, the understand was Obviously, color to – that from on Board? from change, a was that trying where it the manifested that. from.

Jeffrey L. Ventura

above. the (XX:XX) of All

Mark S. Scucchi

– say I'd then... I'll and start

Jeffrey L. Ventura

yeah. Yeah,

Mark S. Scucchi

from comes the It ...take above. it all of back to Jeff.

Jeffrey L. Ventura

Right.

Mark S. Scucchi

a impact that the a our what It inventory. in It level is balance sustainable to and that's harvest preserves the is the value looking and profile strong sheet the ability operating at equity company support leverage to to board. the that views We clear multiples what shareholders from internally have your on side. their trading hear are. does and our and as is, loud what views, We leverage levels appear the

of all amongst dialogue those a it's So, topics.

Jeffrey L. Ventura

a I'd XXX% outreach. made agree said. with just I big year Yeah. in, effort with But we Mark what add shareholder this

shareholders to of So talked possible. Paul (USA), a really many them. with big effort was Grigel to Capital number communicate there - we as Macquarie clearly, Inc. as And a

And tones just changing a Thank Great. Okay. little you. then, bit.

us down of XXXX the the of now? decline the where reduction rate? what throughout about that getting is kind you where in five-year could main also talked and to corporate indicate guys the rate through trajectory also, Could driver decline the goes XX% the then XXXX. XXXX in But you is walk below And plan? between You

Alan W. Farquharson

Farquharson. Yeah. Alan This is

the of kind address issue. me Let

XXXX call, we mentioned decline XX% the think I year XX% rate for on moved to approximately our end corporate thereafter. was then and that

to so, it's the digits. had is get to in down five previous years we within think And what impact. previously really the or then, just that low-double you're years said I going

What's drive overall I one, of So, the obviously maintenance what forecast to the production Marcellus, has what's Marcellus things. think rate – Number probably and is in been overall decline historically the well that going lower peers. other kind of to driving probably combination in that low our the plays a of than CapEx. is that's most has

think I really quality a function it's of of reservoir.

as over over – XX (XX:XX) going kind well look like. flat Then we to into going it's wells added of would mix, of of what years and and well. production Obviously, with course, feed to as you are in. decline to laterals it's get so performs longer obviously understand history, those like longer going Our the declines look the to to of continue

of Marcellus next continue from, to that's to And XX% out, rate to decline to the see it would overall is decline So expect what's and decline then continue believe, corporate. going we drive year. XX% to I the rate decline

point So, is (USA), Inc. at Grigel what Capital in - Paul time. Marcellus Macquarie this less obviously that than is

Great. Okay. time. you for Thank the

Operator

And from line Mike Seaport question Global. Kelly your of with next comes the

Michael Dugan Kelly

guys, good morning. Hey,

Dennis L. Degner

Good morning.

Michael Dugan Kelly

cost. love but question of your color Sorry unit to modeling give you little a on go-forward kind transportation here and gathering more boring bit I'd a

move maybe $X.XX slide trajectory, talk peak look Thanks. that there. mcf, what per Then XX, rate. we you it's and come should maybe XXXX? $X.XX on to can kind to I from think about like give of mean, just you supposed I down it as through

Mark S. Scucchi

Sure.

new we've So the impact provided incorporates the guidance of guidance. first accounting of all, there,

we've Remember, the just capacity Rover an contracted in QX. see of come about increase talked you on-line to for expected expense. a transportation numbers. in But in in last is the our our that's the of also firm of increase gross prior revenue increase the form of So, and

to continue transport peaking to early as talked their long-haul comes and we about gathering of we period expense. the filling are able our time optimize So, if then, over And on-line. gathering that our transport, expense you're in able all

Southwest going shifting frees capacity, in-basin the producers capacity Pennsylvania. this forward, the is a sales by production, then, ourselves with of long-haul coming well that as So as expect the does up benefit that's we into new in-basin. of see sales out have our your other we to it demand And year filled of benefit. transport end their current What

obligated further take long-haul on to not we're transport. So any

sitting We differential, are, looking back at do gas have improvement of backs the in move of or expected to basis use some us best local option capacity we locally to basin. the and the what unused whether benefit of net out

continue over put to that production, us does inventory trajectory. fully So together, do what And portfolio we per growing to the that's outlook, our improvement transportation laid and five-year is and gathering, a mcfe. expected the it what out utilizing allows existing that's the $X.XX continue we've

Michael Dugan Kelly

Thank that. Okay. Yeah. you. That's it me. Appreciate from

Operator

Bernstein. question of line And from the comes your Bob next Brackett of

Robert Alan Brackett

technology? constraints physics? foot as laterals. you Hi. what talk of I'm the in terms intrigued sort completion by even the are productions that Or of you Can about go beyond XX,XXX

Dennis L. Degner

Yeah.

I I think focus would be what on at the is going gathering to processing and this really, equation. side point, the it's of

still basins technical drilling down for we're way And XX,XXX again where that laterals yet. and really haven't drilled I think side, have longer walking as limit our be and from pathway the completion folks limits seen where other laterals. are looking examples other the what and are foot going there just the clearly, we're to is and of

comes how well us this do facility vapors what that the have design So continue facilities, of your be to running and to room that they're for longer. (XX:XX) compress, components lateral you to to other links management, push process still feel ability considered. is other and off the side, given a of But optimize confident all gather, piece

mean, of done where is lot at certainly a So have can lateral not links the runway with of the in development. and really this end of cases. mind, point, seeing, I end in this But facilities upsize that all we for we're the

Robert Alan Brackett

you the out worry All like don't up, toe you and that to and in that stage complete zone you So the handleable? able worry about many to and down? length were want you you stages in don't as toe as spacing staying stuff's

Dennis L. Degner

dedicated team that We and have talented efforts very XX/X. monitors a our geosteering

history anything, had Appalachia. So that our wells, you program of the we're if also drilling our – within in tell I in we've targets we're fastest but drilling tightest would the it our

drill our keep them target So these the feel good to desired really within and excess ability X wells, we land of miles them long. about in

Jeffrey L. Ventura

Dennis, I question. Dennis might a and challenged – I've team (XX:XX) our Bob asked that's that question. great

minus at the do end and lateral feet that. or of XX they're is target So XX,XXX able plus to that foot that line

Robert Alan Brackett

Okay. That's amazing. Thank you.

Jeffrey L. Ventura

Yeah.

Operator

the And we today's end are conference. nearing of

will Carver final We to for question. Heikkinen with Marshall our go Energy Advisors

Marshall Hampton Carver

theoretically do your able laterals. you could very Is it on Yes. XX,XXX do figure is plan things in these Have out Is and over you feet? XX,XXX been have what's XX,XXX (XX:XX) it Based you know a the mean, XX,XXX you already position. acreage better And if XX,XXX I Thank five-year and to what like to wanted you. is few than years foot a longer it I feet? lot – drilled cooks go blocky and longer been that. feet? next feet, which the configurations –

Jeffrey L. Ventura

Yeah, Jeff. Marshall, it's

conservative. though very something we lay with tried Even the year when our we'll I out wanted that to we to think, reasonable have things laid to reasonable. seen that's us to out one outlook, we put We do and five-year expand of something the to lateral you've totally and do continuing length expectations was time. each

only our plan, even in lot our that, put we bake we that's there, didn't things put other believe though that of efficiencies, into upside do So with didn't we are that Same kind totally of we'll so to we an hand. plan. a efficiencies in some

Dennis good to drilling wells we're last that some we mentioned, type and XX,XXX-foot above our performing And of year, some long upside as wells plan, so, this from the earlier, with were are and about year. Dennis mentioned talked I that some about, talked as there's curve XX,XXX-foot. as wells

to our that's So, upside good a plan.

Marshall Hampton Carver

you. Thank Okay.

Operator

remarks. Thank session. Mr. call to over I'd for Q&A me, his like Ventura you. excuse to This – turn the closing question-and-answer concludes today's

Jeffrey L. Ventura

Yeah. follow-up additional the any Thank Well, thanks everybody with for feel and to questions participating free to you with have. you. And the that call. Laith on team

Operator

thank Thank in for your you. participation today's conference. And you

disconnect may at You this time.

Laith Sando	Range Resources Corp.
Jeffrey L. Ventura	Range Resources Corp.
Dennis L. Degner	Range Resources Corp.
Mark S. Scucchi	Range Resources Corp.
Alan W. Farquharson	Range Resources Corp.
Robert Scott Morris	Citigroup Global Markets, Inc.
Brian Singer	Goldman Sachs & Co. LLC
Arun Jayaram	JPMorgan Securities LLC
David A. Deckelbaum	KeyBanc Capital Markets, Inc.
Ronald E. Mills	Johnson Rice & Co. LLC
Paul Grigel	Macquarie Capital (NYSE:USA), Inc.
Michael Dugan Kelly	Seaport Global Securities LLC
Robert Alan Brackett	Sanford C. Bernstein & Co. LLC
Marshall Hampton Carver	Heikkinen Energy Advisors LLC

Range Resources (RRC) 26 Apr 182018 Q1 Earnings call transcript