RRC - Earnings call transcript Q2 2018 | Range Resources Corporation

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Operator

Welcome to the Range Resources Second Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Statements made during the 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 speaker's 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

our operator. we Officer; chance the updated Chief Dennis Financial joining to for SVP of The review call Thank Hopefully posted Mark quarter presentation website. Degner, Jeff investor you, Scucchi, and are Executive call. today's speakers and you've Range's Chief press Ventura, Officer. on release Operations; earnings that on Thank second you had a

We or filed the the yesterday. access also on note XX-Q our SEC measures call. under using non-GAAP Please today's It's with website our we'll the available certain be SEC's it you on EDGAR system. Investors referencing tab can

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

tables on we've Supplemental our transport pricing the and information assist in cash supplemental information of measures. expense other all non-GAAP additional detailed to realized posted calculation include website EBITDAX, margins, products. and for also on tables For

also find in the You assist the With and Jeff. hedging gains over the the of that, to to detailed losses. under call on can me tab calculations turn Investors hedge information let website

Jeffrey L. Ventura

Thanks, joining this call. us everyone to morning's Laith, on thanks and for

build second quarter saw Looking we at success the on quarter the financial continued year. in our and to of operational first results, with the

to meaningful with since The provide goals and margins to was we both levels seen versus out oil cash over turning production I'll flow on our cash per cash prices. increase not making year. Pennsylvania, the has Southwest this of quarter, outlook flow further and in in NGL and Dennis results price the few in year, per and improvements better XXXX. on last the five-year before unit the consistent realized barrel quarter Our pushed year improvements increase we're per $XX continue which prices behind margins by increased higher to prior XX% driver year-over-year key see comments the Reflecting strategic Mark. share it driven progress cost and on over a

producers It's is to with which majority oil United capitalize price quarter expected as to increasing States high-end one this the play the of XX% advantaged NGL often previous Range's the liquids, improving exposure of for NGL a our propane, backdrop production. be our came gas NGL international and largest fields As NGL basin result Range are the our of was as And guidance. strength, coupled of to world. of pre-hedge we a in continues in the natural macro seen Appalachian largest revenue well-positioned understandable from through that to one on markets, the for NGL an our direct capacity production. gas from the realizations with Appalachian of ethane this for is since

basis garner and other plays. premiums year worth from to markets see or NGL access differential more purity gas improving as improvements. nature However, y-grade to send to also does international play international I of of natural control the in purity the are wide compared in-basin quarter, position Gulf sales is think as market it's exist evident over are back products with seeing so markets to the to of think within the We and mentioning, liquids differentiated to major other unique grade fractionation, expectations other NGL U.S. access This important Coast. of become meaningful you differentials Range's type typically products the a as recognize will Appalachian model basins markets. barrel should transported April strong typical gas next any basin our Appalachia production in Back and to the not has

to to team improved These to $X.XX up line new has XX% high this As constraint. time markets the as calendar NYMEX compared compared benefits gas XXXX benefit being of to have quality on are turn to $X.XX start production in guidance Operationally, last result of differentials, year. gas Marcellus Range's Southwest years Southwest under a realized last capacity approximately pipeline increased after the year. quarter from second continues wells which Appalachian

a production most Mariner was the Xpress downtime our incredibly you able various challenges field. we demonstrates proud with gas and living work pipeline of despite to in As created of while the the challenges. these our believe the natural out gives long outlook of midstream I our cash range processing year-over-year expected experienced assets delivering capable which quarter I'm to of is know, achievements, solid and pipeline team the core Marcellus us significant underpinned partners NGL team's and flow the what within on growth East Leach area the confidence maintain southwest by We assets. the that are but substantial in

are what and five-year under pricing estimates forecast. Turning improving year-end the what are this long capable lengths, lateral to of assets again the share extending outlook, outlook reiterate we has represents is XXXX let our what in represents. productivity as well included conservative Range which of It record a me track believe not

gathering and Looking outlook as led by we processing our cost in infrastructure. GP&T These increase utilization case expanding lower see five-year to base margins structure transportation, a existing Range capacity. leverages our high and quality reductions improvements of its at through costs, inventory are

five-year reduce in as interest starting last expect agreements. transportation year plan the the same leverage coupled anticipated market our a per we mcfe and, cost see our also outlook free G&A a that increase firm of capital vast and a believe improve in improvements expense, inventories. sustainable requirements generate We low fill of in flow enhanced Range's these of personnel. reductions maintenance Marcellus more us over mcfe this to the existing our natural we on and decline as flow Combined, cash deliver reduction time, free quality we cash this outlook flow beyond we both into meaningful but locations, efficient margin, only see in absolute will we existing believe terms and debt. growth, as we're high not per core others gas rate equating to to these At become position and unique cash positions the We given later to exhausting inventory continue margins with five-year and

do will while like. improvements. enable story, Now, That's potential we're as we'd think free as improving in come this outlook quality asset to actively fast-forward Pennsylvania that for down delevering we leverage asset does our near-term will Northeast We're cash sales why goal organic that is Pennsylvania us and high support Southwest flow, compelling targeting sales pursuing the not fast with and a returns the inventory leverage leverage move believe we leverage an leverage times, that ultimately we X step below investment getting as key lowering of grade between in equity addressing prudently time should towards believe is we a value in see profile. disconnect what which intrinsic is fast-forward We current these and a value asset true sales business, to our of we our potential that. and

progress and we added couple and on President Range ourselves progress the strengthening for initiatives about operational So set goals result to will and earlier add a its Executive provide experience to team further to Vice month efforts, perspective the team. team, further of who'll excited Range good we are plans the we this the board. we're and that we're senior strategic support management an in To announced making these seeing. management

and adding cooperation seen be each on top-tier in We perspectives to two reality. E&P the a with insight increased last perspectives. has board. Like SailingStone, that and Range we well-rounded new to in announced also truly being value. last shareholder said stewards purposeful active, and I to provide our roles of board improve received. these on remains valued I lot the we're shareholders, shareholders, independent have dialogue discuss adding better, routinely I believe again that that stronger we a Board management company. changes Range open I'll is a our board focused our for over will Similarly, a of call, the these Range operations. to been working into to as members and we've translating team that and with CEO. change the see largest agree company. includes company turn engaging of which on incredible a tirelessly from a split inventory the been Put Dennis changes that discussions, governance we will our to well we'll good and shareholders board it have of believe the field make make we're active continue discussed that ongoing months, with six is Based obviously believe the we'll senior shareholders. have corporate shareholder, Chairman over We've change to a makes and the refreshment the The many additional topic committed to have good now simply, ideas with to We making for our had

Dennis L. Degner

Jeff. Thanks,

quarter, Louisiana the sales to acreage and Appalachia XX Terryville our positions. on Marcellus across back our second North Looking teams and wells turned

on outlined Bcf production our us per at quarter quarter on of on be first equivalent wells we X, a per of MMBtu puts was natural for was third-party year-over-year of line initiative done sales production. both generating and our in TransCanada production significant second majority XX% deliver to On second day the Achieving June approximately per expect rupture our XXXX Xpress equivalent Bcf Bcf last day. gas outages to the per the basin, half of in Appalachian call, during the day be plan there was a we up that X.X resulted back XXX,XXX these gas X.XX day. a including and second As to the diverted quarter pipeline NGLs. into quarter, growth, X.X third This goal the of Leach in despite infrastructure two of Range's

state our The our in put our service minimizing outlets, line on outage our returning XX team indicated selling needed, into the of to effects gas and Jeff to marketing the flowing back on with the transportation customer able As options our operation Gulf was more Coast. and through natural was XXX,XXX normal to production this production. day per a of reroute portfolio of production of as of Appalachia, July

occurred operation The when was natural Mariner second gas infrastructure I liquids pipeline. on suspended Sonoco's East issue

result, we propane combined day a for and X As during quarter. per of the second XX,XXX on I capacity lost Mariner ethane to barrels for East months almost access

a natural taken NGL volumes identified team of sold alternative has ethane its States, as for portfolio largest of in purity United The East approach and the the of one Range marketing Mariner products. sale As markets some gas. the to the ethane producers

transportation higher propane to By international slightly were downtime, prices For customers we the access propane, the local to Sonoco to that alternative On were as railcars to shifting Marcus our average continue to Commission access reach expense. various these the Belvieu index, via to on although as a markets. domestic during provide Mariner markets realize propane voted Hook able well that terminal to Mont return methods another sales using Range has and allow Utility normal pipeline pipeline and to I operation. ethane unanimously Public June above the XX, with service, Pennsylvania East to

as our of expectations, is in the production capital alignment our XX% track is our in drove year, XXXX operations delivering spend, I'll a from on a efficiencies plan. first higher point and our the the on good little time spend minute drilling for more team. work with of the over planned Just midway these discussing year spend team also a efficiencies we're little half and the D&C as At activity.

the $XXX unchanged towards million Our the with Marcellus. XX% capital budget at directed for remains year

back the are on highlights quarter, Looking operational prior second quarters. to similar our

drilling upon of into X,XXX their Marcellus of falls feet further in team a horizontal build operation. prior team foot successes. best In demonstrates This continues consistency XX list the days the other our day footage second the hours. record to their X,XXX X,XXX to quarter, at long Appalachia Our drilled and

XX,XXX team drilled best was team the setting length given fastest, lateral month years. In for the history. addition the lateral average month we're translates This feet shows coming of XX-hour wells foot a to our feet into as drilled, June. the cost, length This and average lateral in the a the record also a successfully per in direction all reduced the the in in headed the drills and drilling cost dollar lowest normalized longest, as program for

ago. hard was at at placing On increase day. is XX% frac a to compared total X,XXX per under This time XX% increase fracs seven just stages in stages side, team the the year well, and a the same efficiency as work in just one completion

these The to from the pad super-rich XX in production, sales For pad wells quarter turned dry, team to feet. for results five sites. wells sales existing from five these on to area, was gas XX wet, eight prior an per of IP average discussed, were sites Marcellus second we've In turned pads XX.X covering were drilled the XX length our acreage. dry wells and Similar the feet X,XXX day average four well from lateral with million of production. sites cubic

this on the roads, we've existing past shared gathering on cost saving for through approach the As saves capital while cost calls, pads, fully facilities, infrastructure. upfront utilizing and

As with based we This cost back the on pads of a efficiency the estimate Appalachia-Marcellus the to many the In were turned years we use reduction see and is ahead stack-pay we half of cost one in the opportunities. on remainder as we the the $X along an develop sales. to of wet expect two additional of reduction initiatives wells. and look infrastructure our existing the capital first for our new million forecast year, of for XXXX, area,

average pad average consists of lateral cubic day from equivalent million of feet. feet five first IP an nearly length with XX.X The an wells per XX,XXX of

wells sales day per the of XX.X online early from wet area to million from average forward as The they length three three QX pad look lateral second The of six XX,XXX of week IP quarter. turned the wells. the over at call, with equivalent feet last three wells in third production establish of production only an of the the sharing reached average quarter to We the feet. came next results in our cubic in an remaining established

three are equivalent lateral well wells from was in XX,XXX with average in as pad quarter from condensate of production three XX.X an well feet of Lastly, are the of These over their up XXXX increase with cubic all The last of believe flowing of these day planned. production million in and an a on of online the the super-rich for call. expect per as XX% performance cleaning conditions wells area, IP were examples remaining I the came program. our discussed lateral instrumental we good constrained we results in under liquids. production initiated five and average feet. our types wells length for lengths wells These

ago. three to leave back wanted a Appalachia we the Before performance I continued year to pads sales on key turned look operations, from

processing average year One The pad by four X,XXX producer, On plant is Washington this first near the be length located later pad with currently to the of producing normalized That sales Creek to wells northern future wells with strong XX%. year. turned in operational be this Harmon continues an lateral should above this County. a feet. the we curve later, type

we around expect like We as develop processing the new wells to see acreage the this more plant. further

later to pad the wells and four from type feet. This around further prior exceed prior X,XXX results. of team's ability pads consists an second one the well heart The of Washington length is drilled average XX%, developed was of County by and located to in improve lateral year continues on producing curve the supporting pad normalized

second from acreage line this third selling line the the wells Louisiana, division production two to condensate turn an area in the current laterals average normalized seven in position. length four to excellent. feet. XX,XXX where these of excited the the the located time wells economics wells longest at obviously condensate quarter. year in These pad sales with scheduled of quality these the We're WTI one The our like are completed to Washington of and later in see wells in With is lateral to barrels curve over producing with North highlights of day. quarter, and turned in type X,XXX that we super-rich continue are outperform by for in still wells $X, our less County third XX% pad the turned the per our program western with In

type we year-to-date back this As our in are normalized line curve with the look on performance, published producing well results earlier year. Terryville average our

remainder drilling for Even We North quarter XX% approach for have on the the needed, year. this are cost-effective in closing, capital the year, These not support utilized during per help which the both by office, most beating point our increasing of midway is XXXX, with is would Mark direct service XX.X% Terryville to wells. Range and we results. accomplishments to recent turn produce though field, divisions a day both to the by operationally team continue dedication In and drill our operational of in one rig be financials. call year-to-date. the XXXX target not their possible discuss be partners. Louisiana the our in crew the examples drill improving laser drilling for to reach the the cost as the efficient of and the our in active the activity limited frac continue as team we technical on with our in over average by team I'll focused if will and are we as now versus dedication few A operating footage track the production of and our spend,

Mark S. Scucchi

was drive for efforts expectations results costs, projects decisions strategic operations we over XX% increase plan, share. cash EBITDAX for XXXX the are a cash principles for set Financial second results was discipline controlled for by core to approximately absolute to quarter was part with of quarter. commodity keeps increased Dennis. flow. quarter which cost capital compared seasonal dollars realized the of by driven a on in over drove Average million, and showed with $XXX the allocation, XXXX. program Efficient net competitive marketing second to production flow improved an flow of you, These number were track flow second fronts. driven with year. cash activity growth cash second within of million rates and from price believe same were by increase $XXX prices, to guided risk-adjusted represents Increased of combined announced operating cash in of million $X.XX Investment capital and flow margins on diligent directs quarter with quarter return. cash ongoing revenues, the our Thank and both an on mcfe higher transportation costs volumes, per consistent our per pace prior higher Analyst pre-hedge us realized progress quarter improved controls. and $XX second and XXXX

the and excluding accounting quarter and were flat contracts. by at production total in year. the mcfe. essentially $X.XX, costs by of were expense improved interest quarter, including of taxes, cash compared unit Looking to general, about LOE, the certain $X.XX for changes G&A $X.XX costs processing improved impact Cash, stock-based in compensation, prior treatment a administrative same expenses

better of during from recall $X.XX higher Adjusting accounting made neutral function the of as of the expire has leases book is which gathering, impact these to will the at capacity for acreage is enabling and The quarter, quarter, This Louisiana in same decision and the GP&T do is of the capacity, prices leases XXXX, you offset new margins, to XXXX $.XX end higher to in expense mostly a guidance capital comparability, guidance As increased expiring markets. quarter received online starting the the recognition in XXXX. quarter acreage first this by the to net mcfe These to the with quarter second the attributable a coming new compared charges unproved GP&T with expiration of and not to associated into full this of extension second Approximately change time. guidance. quarter. certain value processing, merit expense $XX year. last causing areas represent expiring increases that change second allow transportation transportation presentation revenue expense result in than North Non-cash expense million we second this acreage the XXXX changed relates timing of to the to this offsetting to sales is charges certain expense. of through and extend exceeded impairment as of in additional as

consistent expiration year, approximately unproved returns the North anticipated $X the normalized of current end XXX,XXX For disclosures in acres. $XX the estimated At expense with third a acreage to corporate at million million. to quarter, remains Louisiana more

online. be we Looking firm quarter, expected in to of unit final expansion. better by cost, achieve the transportation the contracted margin to ahead should third significant timing continued consistent capacity GP&T unit expect with The or Cost result control influenced coming costs. will better combined most pricing our

and as to was of flat debt-to-EBITDAX end leverage measured first the at X.X from balance at the sheet, times by sustained the X.X end improvement times the quarter, Turning quarter. a to year

the quarterly cadence did activity, seasonality outspend drilling Given cash and of we flow.

and expenditures the of during than We in $XXX with annual estimated anticipate budget expected from cash line annual free capital half at However, year. less cash million debt flow this second flow. remain reductions

have underpinned on meaningful In to addition, sale we efforts the when thoughtful, those inventory, over returns. with structure predictable discussed is cash you. converting focus months. point will are into achieved be resilient to Drilling will allocation management, to by repayments safe, asset will our in Range's believe on future to with Range's coming financial a whether From into sale we cash operations In shareholder but continue and flow. foundation rigorous capital of efficient and time, back flow summary, cash disciplined, consistent shareholders a capital one or debt recent view, of progressing announce remains to growing it drilling, process. tangible cost-effective calls drilling asset deployment existing we returning will success efforts. believe yield vary success and a coupled Jeff,

Jeffrey L. Ventura

answer be to happy we'd questions. that, with Operator,

Operator

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

will permits the We AM until time. call XX at Eastern as questions the take many as of time end

Your Doug Bank America line Merrill Leggate first the of of from with Lynch. question is

Doug Leggate

be that currently, And the likely monetizations. I related case, in sight extent deeper And you whether predominantly if you little of you line could which wake asset Thank got you all – market In on of how or particular? to a again current please. you're can, I just thinking you. can, you feel the extent But your the wonder specifically, dig the cash on the morning, Jeff, think acreage Good disposals with can everybody. follow-up, to I've just for how production. about see the we color for guess, deal expect – how the thanks about Chesapeake about should flow? you to acreage I see how a in

Jeffrey L. Ventura

at me, higher let as might going Yeah, level. I'm a it you do expect, to

quality really think critical, quality assets' at thousand deal, the you I at can comparison. mean, of Chesapeake you no I thousand if of and versus think the recoveries foot, look the it, the really per assets there's cost per I our look structure. foot, cost

quality I think important, all. is not I analogous So really so think at that's

The and very I'll is at level. high say, other thing this a

sure follow-up able we So is that to goal affect to will our feel expect year-end that below times. call I your accomplish be I'm not if this my but but said leverage I near-term to it, notes, And say in by three question, will ask that. get we'll free

Doug Leggate

very It's high level. Yeah.

Jeffrey L. Ventura

going know times. ask five you, I Doug, I know to like you're follow-up and

Doug Leggate

I... Well,

Jeffrey L. Ventura

Let question. with second me it. ahead the Go answer

Doug Leggate

And a you've obviously should pretty too be asset I obviously rate. high the didn't Again, a activity, well a Louisiana the that think I mention there you've decline about go-forward of obviously you're was to that not portfolio? Terryville. fairly think I'll decline market. in signaled role mean, you to managing How level. the Limited try got the we decide I'll specifically one predictable. rate

Jeffrey L. Ventura

Yeah.

Doug Leggate

there. it And I'll leave

Jeffrey L. Ventura

several Marcellus. and Terryville, the And Houston rig Marcellus, clear guys operations, being very there, there's the results Again, this talked We allocated been we those our the to focus other were are leading even and Terryville office given good the the changes that year, we more making Dennis saw did But so of – the thing in Scott we think slowed the that Chesebro down question. we to we and now about team, capital in in others. below Great leading progress. did one several keep early is way expectations. I that Degner

to slower, great near doing in high think to of So original said And to things as feel a we're processes back we is. in Dennis the reduce also job, our the the actively the level. look going term, notes, of three Louisiana Pennsylvania year-end Northeast we pursuing competitiveness expect for various want I that think number I at and at we'll then But we'll And be Scott able we're and By against and going there's in we're that. Pennsylvania good a do to portfolio. a are we'll times what my to properties have leverage, a and question, things want I below that. get we do Southwest have we trying

Doug Leggate

the Or we to do to just everything so Is it clear. here, at much on you're you appreciate I Jeff, be don't candidate point? sale to Terryville press but want trying this, too obviously, some off table? is a for

Jeffrey L. Ventura

either year, in in make Northeast decision. run short that or what on Well, right year short returns and later early now Southwest our the is run saying is Pennsylvania. Pennsylvania are focus look and next this we're the Terryville, we'll at how those

you then $X look at, When sell competitive, basically our history aren't at over roughly the we to to billion plenty of really projects there's look in and If last sales history, tend them. decade. asset

things an have portfolio? basis have So the with to can we on we projects in our it comes that down economic compete

Doug Leggate

navigate going note, want Thank this issues challenges I worst our it ahead the you of may expectations you you to at get point? leave pipeline your there, to if it's on it, ask other guys, you. to issues finish Do forward. that. we're think seems but wanted I'll I real you? just these one know or managed because looking to to thanks. so that I'm just any just past for more congratulations perspective I how fairly see it do quick, relative don't you heck really I the Or pipeline on obviously sure, well a did and positive you pretty much

Jeffrey L. Ventura

barrels day (XX:XX), on a not our It East I able team of And great the the XX,XXX big operational really Mariner and was Yeah. price per our all two and team your was of job move for again, you'll thank to board per great have a big and is that's beat, positive products. and beat gas across job advantage respect a overcoming much Well, very the those, tough XXX as quarter. on pipeline, we miss I really then for how And a well you, lot Doug, you able production credit, issues, to million a lot international did of that. and almost you products as teasing, that and comments. then give I a we and day to do appreciate being really up marketing thank keep remember, and very move work being

So, and teams, the so appreciate great accomplishment by comment. the marketing your operations

you If I quarter. position, in and one the third sometime us, pipeline Rover in should Rover, think a only look on more that's and on we're great really major come to there's be at

when great able we we getting pricing, look be And get really position those at quality near what and so expecting as fact, they behind are, optionality to infrastructure enhanced pipeline to be infrastructure been more acreage and for us. levels or projects behind at rich projects, into those all increase we a than really We're be gas be we end then pipeline NYMEX Range, our concerns are of expectation have should with now in it's coupled you being be and since differentials better flexibility looking won't predominantly barrel high said, lot you infrastructure significantly we it's behind into great constraints we'll positioned in part seen so our like held, should that with in much the look of to that XXXX, XXXX, the we our if pricing, our realizations, will a we've able coming XXXX having us. So are quality the in, on get to NGL its will for in that have we're for been be a projects where of drill acreage. as top a NGL gas almost high prices condensate the haven't NYMEX us liquids I inventory Range, waiting

Doug Leggate

true again. very Jeff, thanks you. congrats Guys, for the answers. Thank

Jeffrey L. Ventura

Doug. you, Thank

Operator

Goldman Your with next Singer the Sachs. line Brian from of comes question

Brian Singer

good Thank morning. you,

Jeffrey L. Ventura

Brian. Hello,

Brian Singer

the to relative the to where lateral about talk deploy upside growth forecast B, A, give to on your of more to the I your XXXX? potentially wanted you're length on or decide length length forecast and sense and thinking average drilling regards that of to exceed same And fewer can that's direction a start you seems longer guidance, about number wells with philosophically, based it like you're capital? XXXX five-year less you us heading, When to if the, here. lateral the meet in you would drilling lateral spending look five-year laterals, wells you

Jeffrey L. Ventura

lengths. of more think question and insight back to Yeah, flip we let answer upside. lateral me I the what second says Dennis a have it first, into But for it lot is, detailed

drill efficient. more that. number capital again, to goal, one more growth will so that, efficient us leverage And be our get So our drive terms in laterals the is full our lot plan, a have my of To into five-year goal do and and going capital we will, we forward down the growth should longer extent optionality. of we'll to delever is that enable expectation and

faster. capital obviously So our granular better delever if me some we good spend plans or let over for us cash turn are flow dollars to But for we growth get it can have to less help Dennis efficiency within comments.

Dennis L. Degner

our good think our ago, we announcing laterals, made were XX turned team that drilled really And has the operating that had we months to hope we that to it first had we results lengths those last at in next completed Yeah, the other to in-line. right that about excited those completed, and longest, announcement our advancement those process on have we wells see and the in XX,XXX being feet XX,XXX advance, and of one Both had the if of are two feet. quarter, announce continue foot at call. We're Brian. the now of the and the XX,XXX made about next successful one at we lateral our morning, just you drilled

long we're of a extract basically the to it mineral makes ball from know to laterals, laterals, we as we because So as a lateral for is approach continue longer here. we organization. continue the basis lot to foot five-year it exciting our but more we and should advance drill XX,XXX that be and type further forward, as outlook look really drill sense vision, conservative been But a going that us see develop to dollars-per-foot

and for longer efficient So you'll an we're as along operation see movement as put laterals try can, to efficient, it's us. way, much more just going the in we

Brian Singer

And here. gets structures back free that of And Great. on beyond Thank sales you How down any from be to you you or considering on would growth post versus future corporate details deleveraging and be goes the flow? accomplished? earlier the on you the sheet points X provide how you. a my the sale, may to may balance operating to would be the that follow-up then would EBITDA you if much leverage expect depend deleveraging times, straight Can much how that asset you asset sale? cash depend structures of

Mark S. Scucchi

Thank structures a all, we're on you, questions. going answer yet. I we Mark. is of of great would I'll deal This consider, in of detail try not guess, into the those Brian. first to that terms just

perhaps do, that is anything efficiencies to the position. think of would Pennsylvania nature say Southwest and cost-efficient that won't the is what's important impair and I most our what blocked we do up

we acre of monetize million we other long-term believe footprint can that inventory, to X.X and that deleveraging pull piece a very a ways value So and opportunities profile. accelerate perhaps presents drilling that it presents forward, certainly

cash we've your pricing. shareholder plan on a driven believe flow. returns. deleveraging, targets before outlook, our Ultimately As we at through capital, pace, five-year will will the be what effectively of for what what For what's pace second best can it scenario, is invested to our by returns that relates the maximize free strip does the look? leverage quarter We as talked about achieve the are decisions our is a how

below our that so driven our pace will a cash times, function near-term drilling of achieve becomes and we five-year price, And is objective as of over So deleveraging flow. growth getting of forth. by three be outlook, of course,

have drilling transportation we further given firm have will, of the we in that infrastructure or beginning So commitment. what XXXX, flexibility looks like, tremendous no on really pace

line good of a below that's So sight of two to leverage. objective achieving times our long-term

Brian Singer

say on that will free cash driven be objective cash cash when is by spending or And you a growth based flow flow? within the flow,

Mark S. Scucchi

Yes. cash Generating flow. free

Brian Singer

you. thank Great,

Mark S. Scucchi

Thank you.

Operator

line of with Mills the from Johnson Ron is question Rice. next Your

Ronald E. Mills

having thoughts full pads addition in uplift off about morning, you million of a It's talk existing guys. the of highlighted, any go from Good any, pads. stage to think rest Can the about about $X into you the those? pre-existing potential you savings year by development moving I drilling efficiencies Dennis, and question on over by a cost referenced, you productivity back as to

Dennis L. Degner

question, Yeah. Good Ron.

just over we the past great XX results back that are as looked we back think I look the for examples. those months,

Now prior clearly, them of existing those prior But pads production. right one definitely all site. back not those development, type moved XX% scenarios above we think And of two. in was by have a of to or and the of XX% on heart to and we're in adjacent the onto moved was with where it been XX% one normalized curve back one was pad other I the scenarios,

year-over-year. that strong see So the the well results ongoing team or to data technical build just tools big upon has to, really demonstrated we whether to ability a continue it's evaluation,

the That back back savings transportation include all It harvest that's just savings. significant to savings associated by really and full value along gathering $X the just our translates with doesn't that us. You down. million and going and keeping with to move in, able system the in of being capital into

Ronald E. Mills

you, just on laterals effective more just what time? you – that Or mentioned that – is is on do it XX% different? think on that, pads driving XX% on that? at one complete initial to to you the uplift a improved more the that lateral you those And something follow-up pad drilled the productivity development targeting versus wells or do as Is the you kind call, that when of

Dennis L. Degner

goes the in their the in folks it the work Yeah, technical on to the I there to do ability of work back think Southpoint, background. a lot of

yes, at the the in today X,XXX So, target. ongoing to refine we're wells the landing basis. Even an continuing Marcellus, on producing we're on though approach

continue We harvest to data.

We one results. And that is the can continue just we design. Landing to look targets those. improve well ways other is completion at of

benefit continue as you Again, have the of greater lot tweak results areas reiterate this, move approach going I'm So the your we have improve we upon learnings. wells, that you data back year-over-year. of we to and to ability when a and X,XXX into have to

Ronald E. Mills

Great. at divestitures. one last And Mark then on least maybe you yet anything this that Have process? the year for deleveraging sold one start to

Mark S. Scucchi

Ron. Yeah,

production. around mcfe quarter $XX did we at on was Proceeds close So just XX after million, the it the sale. MidCon equivalent about day asset million a

the asset that's sale, first step. but a So modest

get said divestitures, the we've underway a have good by larger, potential year. completed We of as and end active good good we processes have we'll confidence be meaningful, this to that announcements, able on more deal

Ronald E. Mills

it, An announcement standpoint? versus or achieving of in your was closing, it from does doesn't Or that December matter it by if a really XX, selling terms process?

Mark S. Scucchi

when and progressing. a made would these a arrangement, disclose And said, and ongoing Well, deal. the in confidence announcement is just be obligation contractual there an high closing to discussions I are as

announce eager soon it, as announce to it as able. So and are we will we're we

Ronald E. Mills

Okay. Great.

we. are you. Thank So

Mark S. Scucchi

Thanks.

Operator

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

Robert Alan Brackett

the vertical target. of and say, well longer? down on the rough of surface longer give lateral then on, there's foot length. the question well, a fixed and go had of out. I to further location, you those and variable to horizontal component as gains there's If back we capital And And way get the a you into I Can think further a go that of cost that buckets? component could the split XX,XXX a as you two that you

Dennis L. Degner

or pad area, site, by to be not this on drill varied that's we're It Well, cost goes it there's that in also Marcellus wells try that well, vary lot a a same. that super I wet, efficiencies clearly of can think drills the just can rich, I'll and the of field way. by sequence, – granularity, in than it rather say dry, where it, all the going see that look its specific we we down and number to into maybe you on if whether just – the see break it well continue the at

the improve months our seen to, So efficiencies in probably basis. the, the we've that's section into continue let's over horizontal this pointing easy on even addition as less to percentage to we vertical again, But say to that six breakdown the you're section. of year, look just

sections of the basis of the clearly see to we're continue we is just whole section per whole. both equation, foot the cost So but on on cheaper top decreasing the yeah, our

Robert Alan Brackett

flow? completion If dry of I of of foot one in cost handle is Or per your that incremental to that against super-rich, that a that's jewelry I if the intensity? contrast number to sort and at I multiphase the wells Should mostly XXX,XXX. try get is take different say versus X,XXX way, the XXX,XXX

Dennis L. Degner

and an lot of a across hardware from standpoint, we field. really equipment down, Well, move there surface isn't variability as the from the really

with some it's side area doubt the whether yeah, maybe facility in equipment configuration, you're You'll dehydration in where, the gas more now wet dealing something or surface processable see But no differences is gas. look third as you is completion at drilling cost. a about as the you – the compared across to the two-thirds of which of portion more around field, move the cost,

Robert Alan Brackett

Appreciate Okay. insights. the

Operator

Weil. is the line Stewart of question Howard next from Your with Holly Scotia

Holly Barrett Stewart

that your expectations some Can XXXX? position production reiterated for first XXXX would an then, us either your as for Jeff And you've for XXXX? or rate XX%. maybe the thoughts around you of target Maybe gentlemen. remind morning, exit Good Dennis, about production you talked if how

Dennis L. Degner

Well, haven't talked Holly, rate exit year. an for the we at about this point,

earlier at new exciting both quarter We as to look on comes QX line to XX% processing We've the is Harmon the a got target. at sight remain also plant, that. come real QX it we we in there's service, referenced we that on to and be the for continue supports us focused into play an that's compression clear going with as QX. of infrastructure going that look some some call into that Creek

entering what growth Louisiana know we well. then fourth XX%. ability early that some in results about profile field fill the excited growth there evaluating quarter of plan looks to and phase are kind that game North as the what what to we're do we're our it's volumes in and as produce referenced, factoring going XXXX, flow our is talk feed So about for that within I XXXX, to and Mark but laterals cash think from also long that profile, and of us the like

Holly Barrett Stewart

cost you've of Okay. That's the one seeing on – another on in the service helpful. you're looks you it just for consistent. And then your for right deck side? pretty now kind anything list there Is you, maybe, Dennis well like

Dennis L. Degner

Yeah, good question.

one-off you have to more We pads something cases keep very D&C been still because but But in back small increase cost. like but be we like pressures when changes, in very reductions tend maybe across-the-board some service seen would production, is moving we at the one-off off, the to existing stave with in board with what to some we continue us across only we're efficiencies able seeing price, in have to that it our been of look small the and small moves have increases they able our cost on call seen fuel any versus in or to see a not may some I past. we've nature niche initiatives help reference cost really the flat along and

Holly Barrett Stewart

sales Is helpful. Okay. you throw ex-asset out maybe XXXX? one the any magnitude that hedged heavily nat generation just flow Mark, of I last And kind you're my there cash free both gas for That's crude can for there pretty on and side. guess Great. of

Mark S. Scucchi

for said, that a flow, capital point, on XXXX, basis. No, we program a think well I your follow as cash hedged and within I we'll to we are are targeting go-forward continue to

times of expectations long-term to the prices, of at X accelerating below based revolver trend asset of under to getting that is our borrowings I following in X so current the the closer reduction good see target will in near-term sales You get on targets times. the objective think with and our

number, cash the there number. where just pricing annual hesitant out an can achieving I'm in provided trend like a basis, to throw leverage haven't what think But guidance on specific extrapolate a cash near-term so I We our our is, flow some you flow looks targets. free on

Holly Barrett Stewart

guys. Understood. Thanks,

Dennis L. Degner

you. Thank

Mark S. Scucchi

you. Thank

Operator

line Pickering, is the Panjwani question Holt. Sameer next with Tudor, Your of from

Sameer Panjwani

morning. guys. Hey Good

Jeffrey L. Ventura

Good morning.

Dennis L. Degner

morning. Good

Sameer Panjwani

lower faster operating you cycle try highlighted that you the increase down-hole On some guys as seeing the changing to remarks, asset? in costs, are you anything Terryville, some guys and you times of were prepared competitiveness

Dennis L. Degner

just what really really the across drilling to over through question. think months, of learned we've over majority has the I XX past the been the efforts Good yeah. core team's refinement of Terryville. Well, would a XX

a we one or and initiative whether it's critical would So targeting. bit basically being to there's prior improvement placement our We've not operational its results as talked efficiencies that well into well. design well continual translating other but not well (XX:XX) in also just plan calls, to point about than only

to also do in continues in Houston good job So, the Arcadia. a team there and

Sameer Panjwani

I It CapEx? that how other be we in capturing to I conservative. plan should this the think capital via Okay. tough or upside, may know longer about your Great. Based And downside like the guess fairly numbers the on efficiencies you're but laterals sounded were opportunities? quantify, to then and maintenance

Jeffrey L. Ventura

you for you've lengths, several XX,XXX able said, that's at to feet, been really clearly that we've not longer. is but migrate cited, like quantified put yet to could – it outlook we or we out the our put really But – And Dennis we that. laterals. seen and I meet Yeah, made know lengths think lateral mean, market. in continue stepped achieve don't What five-year tried the we reasonable to some put the are last assumptions to conservative beat haven't that that what to out clearly, years actually lateral do we to across expectation, we've long something it together board. that so we with that

maintenance with expectation in a efficiency time, way. time, – our that capital positive is better So capital get will increase therefore which with should lengths lateral affect will

Sameer Panjwani

terms And me. to earlier debt on free your highlighted pay-down of using sheet. or and flexibility in terms responses balance to get In XXXX beyond trying last of cash both you in an flow leverage to for growth question, the accelerate Okay. of faster then, having EBITDA rightsize to one your one in either

of about decision into faster? faster think we of debt growing factors that kind the down paying should go either how that So or

Mark S. Scucchi

factors below are so achieving to leverage something the the getting two targets, three So to I times as achieving measured think nearer term debt-to-EBITDAX, longer and closer term driving by times. then

it's resulting be five-year driving going the factors really, over reinvestment make the appropriate to growth rates decision behind are outlook, that rates returns. shareholder on and we As what

time. prices look So look we'll wells, We'll transport at, optimization quite what that the frankly, what are are. on point And capital being What returns cash to at current flow? driven. may share shareholders long we of prices? then returning in of of point? rates are most at are. sense forms rates and growth what look is will existing gathering at what What are that the system haul free dividends What at make And

variables put program all overall together, as will size you the of those So that production. drive the of and capital

various So it over factors will, equation, a will of be balancing if kind time. of those you continuous

Sameer Panjwani

So you'd balance your earlier? than better putting five-year to willing what for it terms you go on would in imply, free had it on then cash if invest flow uses be plan of depending to that the sheet slower potentially

Mark S. Scucchi

Yes.

we or that. per cash cash better For example, certainly consider in if deploying slowing can by you flow flow other and drive share that down some form fashion, would

Sameer Panjwani

you. Thank Okay.

Operator

Markets. Capital with Your next BMO line question is from Dan the McSpirit of

Daniel Eugene McSpirit

in capital expected for are for in time? here. Thanks how is release night's number What folks. squeezing me spoke those morning, a is In last And tailwind for based improve today on How calc? to internal gains lasting over Good you efficiency the your efficiency? capital about capital that efficiencies.

Dennis L. Degner

I'll Yeah. Dan. answer that,

an even the sometimes the at basis. think to translates I history does to the team complete advancement ourselves that be very foot like. XX,XXX drill capital five-year look look on some achieve to we've per we've in the forward? What with we with a capital see you continue into, to to know as taken But reason every when like harvest again, that approach and look number foot think believe that. we'll the able you advancements drill program, successful project outlook, to laterals, look that that see $X And been that surprise level. Again, at there's repeatable. foot, an efficiency can been got the When the our continue through a example, you every level cost have we efficient. a than the year-over-year – more we look And would to that's as of that efficiencies divisional I at at as that And reason of we've XXXX. we also example, believe longer conservative be – we to operating really able and when to all XX,XXX we we've what

Jeffrey L. Ventura

rate. of think think considering really, low decline couple top other a is, have when I really Range that's mind we about things to not a

a so producer. Appalachian So when which gas recycle when – gas an rate regardless then to of at for for I projecting have decline strong you a corporate I at let you of the ratios recycle or is the on best even oil corporate basin of XX% look be XX%, producer And below an business, one we look all-in or decline that really alone think ratio, we're or being our number regardless oil XXXX, think into producer. an – in

Daniel Eugene McSpirit

it. appreciate I it. Got

in Or shot you better to to need sheet. market to what buyers As and for likely Who that's can previous asset Southwest in say peeled it likelihood assets? handicap proceeds (XX:XX) a appreciating and the give same. that PA assets gas PA? do you package? that's That is, to effort balance can the Just much, the anything from say buy I'll sell off just an go asking do, on to only where the today and Northeast a you so is follow-up who question a but are the sales the

Mark S. Scucchi

is pools this Subash, Hi different with There's capital... Mark.

Daniel Eugene McSpirit

Dan.

Mark S. Scucchi

that at Sorry, assets. Dan. There are out there pools looking different are capital of different

You've international buyers. got

producers, adjacent strategics. your have You

assets. also You few their start-up deploy both commitments quite a companies, with looking acquire and to new initial have existing and PE-backed teams

over last quite thorough dialogs divestiture processes the have the assets. in various having we of had those pools So on with that the various are XX different capital months and been have

So you're not market. particular one on dependent

parties. varied and options with have You discussions

Jeffrey L. Ventura

the forward for the of just all back I people the do then is at like But think think reasons to that's a said, so. look I understand, high-level we different the able say quality I'll sharing key can point. all we're And when And And hinted have Mark to we thing. to asset you at thing. this circle more

Daniel Eugene McSpirit

down lastly Valley Cotton been Got going fully the changes that is, it. even here, the the and of written being point? just risk That at quickly. Appreciate asset asset net that. remains And then XXX,XXX this scrubbed Has prices? acres what's further, just lower,

Jeffrey L. Ventura

that We've pretty looked hard. at

be the XXX,XXX So that acres number that I at will the Mark year-end plus minus think we're confident said. or

Daniel Eugene McSpirit

questions, the appreciate Great, or day. the a and rather day a answers, have great

Jeffrey L. Ventura

Thank you, Dan.

Mark S. Scucchi

you. Thank

Operator

the today's end conference. of nearing are We

our final with Guggenheim go to question. Subash We for will Chandra

Subash Chandra

Thanks.

will at window? shifting rigs a mix ability more an product rich with is, First condensate liquids XXXX is any your there magnitude or to to or question all, in change the the by window

Dennis L. Degner

cash to start forward looking plan, back XXXX at plan comments Yeah, just the across always be clearly a say how little again, going we the with can our have back this balanced some we see demonstrated areas as a into have pretty we going able tied moving absolutely provide ability drill be well, like At the mix, react would you flow, we quickly, good of at that look a our so question. years with but always move prior to start three optionality to Mark's at sequence. around to pad for rich a, do clearly, you're and some size vision But us provide when in level maybe point grassroots allows optionality, us bit degree some the reasonableness in more liquids in to We well of flexibility, increase Southwest planning to to really area. Pennsylvania. have to than the we our level to

Jeffrey L. Ventura

Appalachia differentiated basin in NGL access Marcellus. the U.S. go a liquids, of to gas And play. bit of think to that to a people international I of initial and part control like when purity think the prepared comments I'd it a it's the to And is has fractionation, Appalachia further, then the my remarks play, answering doesn't in dominant consider take a step a that back my other in just on Marcellus But the in products, some has that you of liquid plays. is markets, the just pile important gas any Range a lot exist position position little in

an the top country. or that's producers one therefore optionality the largest again, and wet three have advantage dry, the of We in we're of NGL

Subash Chandra

Does operations, we et diffs Right, got this gas and NGL and East, is fully GP&T that revision? later or revised in as costs. for XQ diffs, sort – another the it. step this cetera The expect place next Rover question an intermediate is normal things Leach, guidance reflect Mariner operations, and of normal then fall into should

Mark S. Scucchi

Hi, probably this would this transitional. is I is Mark. say

hopefully late next see Rover come quarter QX quarter, perhaps will expected online timing. based first but would be on full the You in that

once think firm long-haul I on of further have potential improvement. you So expect entire you might our portfolio transport

Subash Chandra

realization commodity on some side the on improvement once the and guess Rover on? I offset But GP&T comes

Mark S. Scucchi

Yes, exactly.

talked the after will bit So online. peak little quarter, it quarter a in comes full as the we've the GP&T on side, Rover first before, about

expense. with in comes impacted So for prices, it better little expenses it's our quarter percent of trend increased better by tick to some Rover might proceeds associated that guidance NGLs likewise is that so. receiving up you'll that the keep it of mind which also in third by so the and some keeping peak online, and in fees see processing or range that realizations, offsetting It mind are that's bit, the offset is quarter after a $X.XX call $X.XX $X.XX mid

like $X.XX and sold least incurring existing the it longer in be call in utilizing improvement the believe anticipated gathering, laid out transport, to we've that, no Over in system and further we the additional five-year transport haul, growth basin processing, is outlook, fully at achievable.

Subash Chandra

Right, got it.

think And one Okay. sales? maintenance will very cap asset pro you much forma final me, for do for change

Jeffrey L. Ventura

all our think mean, any, best-in-class And think recycle we the of at to can't. is Yeah, asset I I that guidance given decline specific out there again, rate, you thing, when going given amongst type maintenance capital we I But sales. haven't low look to haven't ratio, strong any we be

Subash Chandra

of Okay. Great. Top the hour. Thanks, guys.

Jeffrey L. Ventura

you. Thank

Mark S. Scucchi

you. Thank

Operator

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

Jeffrey L. Ventura

participating for to Thank want everybody call this just on you. thank the I morning.

Operator

conference. today's in participation your for you Thank

You may disconnect at this time.

Range Resources (RRC) 31 Jul 182018 Q2 Earnings call transcript