RRC - Earnings call transcript Q1 2019 | Range Resources Corporation

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Operator

Welcome to the Range Resources First Quarter 2019 Earnings Conference Call. [Operator Instructions]. Statements made during this conference call that are not historical facts are forward-looking statements. Such statements are subject to risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements. [Operator Instructions]. 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

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

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

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

information, the cash other margins in tables website on For posted that, over and turn call supplemental to EBITDAX, our let the of additional to we've me calculation With non-GAAP measures. assist Jeff.

Jeffrey Ventura

to the to program capital result XXXX our XXXX to us $XX financial first objectives We Range's to discipline $XXX free the for form start generated our Laith, on budget. will E&Ps industry of peers Range unwavering, to builds driving to improves and this pricing free our our prudent achieved reiterate million will and of for completed and majority through cash focus the also flow This capital increased a is $XX so us last cash second strong start half sooner in their XXXX. upon XXXX. operational reiterate, to the everyone buybacks capital Range's over million of great transition flow additional commitment This million Thanks, our discipline growth original outlook. on cost Range's flow is a not capital and generating reduce cash to will In commitment the outspend generating drilling of and I compares favorably look which X-year debt for in higher year results original management. margins want in budgets reduce of free but we Range XXXX than commitment free outspent the dividends. a less as position through flow XXXX $XX cash could instead generate morning's thanks we course shareholders outlook, on to call. to increase by is X-year to return to joining quarter, in and/or to if and delivering faster, off Range debt the strip this drive not cash million. budget

build intend balance further free XX% asset of intrinsic believe high-quality of proved Speaking XXXX financial we quarters, our our of our being debt by momentum of reserves. value proved this that and price large X this will years inventory translating while on remain and development share in disconnect high-quality included That represents strip a Accelerating over our our targets financial that beyond, a will reserve beyond assets. between narrow top through flow of not commitment generation, through the in of is by allowed year-end our position Marcellus for $XXX full to We the and part asset the $XX sales. value core the into pricing the share cash demonstrated priority. total our which per flow in see the and disconnect free account net is targets of remains We does debt remainder wells debt. financial organic accelerating sheet, XXXX base and strengthened past asset us the to considerably our reduction sales approximately over have X reduce to million cash

XXXX quarters, balance our the commitment leverage improvement to for the Board's can of and on for few filed reference Marcellus, evidence Range the commissioning reduction that earlier debt management this reflect completed what proxy has returns the For focus sheet targets and Like The we've in and us improve forward. both month. sheet you XXXX about which phase deliver called compensation our of incentives balance we derisking going we cash in the term. talked last the to the now near positions flow free improvement,

peer-leading the long our block are for infrastructure and ability utilize low vast that position existing of laterals, and and water. highly costs production. These pads in assets source allows up to efficiencies the capital by maintenance acreage effectively This evidenced have our efficient held drill is F&D development largely and We with recycle requirements.

last transportation gas infrastructure is Our growing Utica massive processing out the to XX various NGLs. expense additional providing Appalachia production our by supplying opportunities Southwest and build basin, forward for thereby occurred both demand the products. while given limiting And natural improve going margins We market in for and for see the incremental rightsized production, years. and and capacity diversified marketing Marcellus transportation over access in that's

takeaway basis We advantage years. expect commitments optimize ample of in without take be it several will incremental narrow sales other the to us markets allowing or to Southwest PA

on to D&C unit and Range free not we're capital decline order help a fundamentals. drive it's many is position, decline base Appalachia Range's cost sustainable capital develop do a some natural that in which going maintenance the the reflect improvement. the percentage first indicators low quarters of an I low believe of base call at Range couple see companies we our Southwest one discipline beyond. we XXXX, assets, differentiates and control. flow. trend cash quality continue growth does the capital there's in add not time with companies increase the The program of outlook peers. team's positive but cash maintenance the macro. this as going Not performance sign forward, true time base was and spend as will or balances strip average requirements. as flow export. an affiliate. discussing in it peer is decline, flow expect American in detail, a supports headed prices this flow of to the expectations. cost satisfy analysis in strip Range's ability the or grow Range's only million cost our see below thrilled we that decline This generate versus cash low asset this course unit and or Range only for a for time, When that was look transportation over controls the to demonstrate Southwest we're in of in we to Mark and base in by and below optimally corporate free for Mcf in generate for X more down came of to we entering this midstream capital on trend for commodity we and XXXX is interests $XXX generation to discussed and cost high-quality nearly significant production, cash for cadence, strip outstanding high-quality to and relatively free the grow Range's generating ability can't demand to This low underpinned significant maintenance like If flat takes development this capable the current pressured the of perspective, driven XX%. dollars in coming quarter first to category domestic Appalachia prices the of underlying with with meet the our Importantly, end North some capital every within asset replace current flexibility most supply X-year producer environment use From both pricing, gas, as efficient be see only competing Southwest current for flow modest efficiency, the a up agreements analysis that provides cash Appalachia at price to by cash in exit flow free chews

addition, In this and make to plan of and and release doing the want next Range's responsible stakeholders. sustainability detail everyone what Range's I natural couple We for weeks will commitment right in report development aware gas to report. is corporate of to all efforts

in growing year-over-year. XXXX, a highlights Some in total XX% while emissions approximately in report include X% this reduction production

to ratio the I of produced a from everyone stakeholders. all to and a Range the emphasize our operators water Range's read thing and debt utilizes and water generation. flow flow meantime, return generates drive XXX% Additionally, shareholder recycle shareholders. enhanced company not to to over this as will will cash believe surrounding commitment over organic area. with cash to in to all as developing time. summary, Range sustainable reduce the business practices begin report responsible, is used but when published. do it focus in we it's sustainable relationships win-win a right And encourage on cash only long-lasting represents development We will cost-efficient achieved This to and Range positive, In also to That recycles to be returns dozen effectively recycled free water position capital continue the commitment free

returns act. to And Marcellus great to organic inventories it other see to investor exhausting of Dennis market program sales sheet I'll beyond looking high-quality next producers asset we're this turn peer-leading improvement the our to into balance position far for now and operations. core outlook will their strive that will X-year deliver near their accelerate and over the a a discuss with the extend given We in believe term. in locations, inventory we

Dennis Degner

Thank you, Jeff.

Our XXXX at/or start operating production below teams capital are track a spending strong quarter on and for the plan. projected first with to off year our

came X.XXX a Bcf our results strong at First XXXX [indiscernible] capital million in of approximately well came spend for and day at quarter or equivalent in quarter. XX% Production result budget. of per the incremental $XXX as

the As year. our front-end the spending we program is call, capital on loaded prior discussed for

As and year. we capital this third approximately budget our quarter expect similar the second to past look XX% to be each and years, spending of forward annual we

lateral guidance. well to XX XX per as performance, cubic two played this generated First, let's XX role key One level some per exceptional wells Both at to With and Appalachia dry QX an on average results. acreage IP's XX,XXX sales have pads this feet we different from the average at/or of about XXX continue million over produce morning. exceeding feet produced our million which exceeding days of feet. prior is cubic turned well talk for length gas above to a day day in in quarters, where example pads. Similar

initial the other per lateral the week in feet. three wells side On acreage. X,XXX equivalent under The from the lateral average the of lengths day position our shorter the Flow clean per million results that in to Despite wells feet pad. quality up turned pointing exceeded X,XXX an in continue team's wells average we cubic was acreage produced just of site the back of work. the from production on super-rich of will these this condensate the technical heart to remaining peak the XX X this operations as we solidly second pad, last the the the four acreage quarter, length from sales over on of barrels production first into wells our day, and quarter

this in increase other and a We level near-term XX,XXX back of the production expect quarter. pad the per activity to during area condensate day liquids-rich to barrels performance the second above

time. Now let's look at field run

and translates trace years, focus winter. improved protocol, ability the a such Similar in volumes team between especially downtime in with to run on to This year operations our freeze past our both run into has their remaining operating a on played winter realtime our the heat time team's our the thorough flow and performance sites production on key look low. several extensive hone approach solutions the QX. production team teams the support, For team in planned focus the vapor prevention lease monitor a back as this coupled for as effort our an with allowed and season technical conducted has the production on improving process, with requiring to production X time ensuring role ahead,

turned wells super-rich closed quarter X in first total out Louisiana. in our wells X XX with North acreage, line, consisting wells wells in The and dry of XX

of X.X to As we to quarter we X.XX flow free deliver production which plan guidance second production ahead, million. day, setting our X% equivalent XXXX meaningful budget production aligns per while cash Bcf delivering our with capital growth, look are at within $XXX approximately our

Appalachia trend several turn operational longest, wells. The Range's successfully of The Marcellus let's exceeding results and fastest first capital-efficient team the showcased they to some most our laterals drilling by past XX,XXX drilled X laterals has of they Now Top as longest with feet. the this team's quarter continued team's all drilled year X accomplishments highlights. X as

operations reduce during to year an drilling been and extended on prior as well deliver by to able deliver lateral quarters. Range on in cost look us underspend factor As long peer-leading these discussed allowing financial a important sharing per contributing calls, much foot we forward the XX%, results has objectives our last the as laterals We in normalized to from this year's production to component upcoming cost. as

completion during front, X team, quarter, increase stages efficiency winter point the the quality same especially team in compared this frac accomplishments stages service a just our of time year to the to X,XXX of ago. per relationships, On XX% the the conditions. pumped while over the operational our day considering in was accomplished Both seeing strength partner coupled with frac

on possible. earlier, mentioned significant a continues we recycling Jeff water as sustainability as XXXX role efficiently play As efforts our as execute to in our program

management through water with team's to water LOE when contributed water produced spend, compared first But below how Mcfe, us corporate talk time partnered it waters as same XXX% of contributed usage. XX% recycle an LOE over other comprised In about $X.XX efficient their the the our quarter program per to recycle we Pennsylvania. first heard Range's operators quarter, well. of which is You've only water Southwest efforts, to year. creative third-party last quarter XX% our have Range's to not approximately we capital the but of also first Range's in

to over a of and and is working overall find thoughtful the and example with of stewards to marketing collaboratively it's team the tirelessly standards be of cost this a and environment efforts. working program next other great results, Shifting pushing to for think step great incremental I team efficiency operators improved industry. the the the example gains, our liquids reduction the

pursuing in As pipeline we've that service marketing Mariner the pipeline a following diligently shared has production East team the out along January, was our secure on appearance a prior call, to route. the late worked X of subsidence time, temporarily taken options flows. Since

both the have and to pipeline, selling production domestic the Marcus various capacity of disruption on the successfully options Energy region. in In otherwise procedures to next transportation Overall, normal extraction I utilized Transfer, the we and terminal to outlets Based on to keep Mariner its quarter, East markets the international ethane engaged with on our Mariner Range pipeline the we natural and marketing X for market including Mariner upon liquids are gas. East has available the returning propane, despite latest ethane, For rail Hook other flowing East and utilized have underway markets. and gas the to update both the as infrastructure transported of over case our through alternatives from of service MEX utilization natural barrels temporary start-up to the and balance the move few days. other other I

Marcus X began first enabled newly at Hook. the last quarter, was its infrastructure During Mariner program butane This resumed that year. waterborne via Range export the East in operational associated pipeline

earnings and international shipping Coast market I average in price hedges, costs. strip X U.S. XX% and another $XX.XX capacity $X.XX butane some an by based at XXXX increase are of terminal guidance outlet NGL orders for want when which quarter the around recent cargoes realizations year-over-year. on Range the demand. additional the terminal than expectations forward is original call. prices pricing pricing, supported Range now spot continue our East slightly premium propane Currently, NGL NGL while to been we export a Including for strongest year-end an seeing forward, of represent is heavier Range's our for slightly oil are well now has had its value WTI. export strip export recently, barrel's Going tight of XX% net products, was XX% temporarily Propane U.S. the realization to so absolute gallon export prices giving first with markets. There barrel be basis, an On volumes also to expects pricing accessing relationship prompt has per Based market pre-hedge expected better over over barrel, weakened, years butane portion XX% the February. and positioned NGL loading of per than using of past international of XXXX on confusion our NGL that, per repeat our to higher to products

possible over this to max Coast NGL Hook course ultimately future. expect the in Range's and of of support cause decision access export East to We to Marcus products other XXXX export capabilities gain or the

Creek saw times full liquids-rich of processing plant Mark commissioned processing This quarter On the West gas run utilization the plant. following strong Harmon Houston I the outages gas first the focused for processing saw wells restart acreage. facility, for first in and supported with quarter first recently marketing fourth along gas quarter quarter the side, of the the our

the capacity of available a call, on the plan online of discussed significant utilization prior of Appalachia that maximize local couple newly over new come years, allows the long-haul pricing us infrastructure. amount to With has last the As improved. takeaway downstream has

work well believe slowdown Further, with industry, local with associated actively of from ahead. brokered we operation cost section job close in capital performance, gas The natural in demand liquidity. trend growth this. downstream with our to Pennsylvania and growth, has a and it liquidity Mark development. net our the done marketing gas in points incremental of now the additional capacity the this targets infrastructure remains local and activities provide market engaged for I Evidence in-basin discipline Additionally, year This production. exceptional turn in-basin and takeaway quarter will existing found capital continue. of stage with team with great in helps over to Southwest gain be in markets results, for production portfolio in-basin in I'll production on the we additional combination to delivering our long growth budget out million set and $X the opportunities can lateral financials. generation quarter. this operational optimizing Range less discuss with highlighting developing optimizing pricing first the transportation really expect the the the the will team's the efficiencies from will the

Mark Scucchi

Thank you, Dennis.

first the on capital revenues the generating continues cost deployment operations, or through met Range and production, During business execute efficient expenses, flow early quarter plan. progress Range made plan stringent management. on diligent cash From to XXXX, capital to a has free XXXX and to guidance beat of

million On to the dividends operations million back reduction of in before of of of solid of debt $XXX $XX from spending cash $XXX million capital resulting million. operational generated compared flow Range cash performance, free and flow $XX corresponding

discussed continued on year We've As to full meaningful the free to flow earnings cash we XXXX. last that made expect free flow call, transition trend for and XXXX. mid-year the the generate cash

Focusing Range's specific like of a structure I'd our trends components minute, cost on and to discuss costs. for the unit

and hurdles production consists focus Our to per for first consistently component both cost the realize manage plant processing of costs contracted pricing and processing fixed-rate long-haul transport elements. includes liquids. time. margins system on our of will decline gathering strategically largely is in expenses as maximize with gathering, the expense fully quarter. Mcfe Infield cost that gas such transport to transport the is full of This returns was fixed over cycle item, cost largest has expanding our competitive margins with over $X.XX efforts our all are line Much Starting online. in-field gathering, natural gas capacity for time. cost fixed and Long-haul and natural met, recovery utilized gas and the variable gathering and a

NGL will On as NGL of realizations. a the predominately this pre-hedge percent and vary side, our structured with proceeds is sales from processing

processing $X.XX, and $X.XX. gathering context, For around Mcfe, per roughly roughly $X.XX represents transport

with we with our anticipated business unit due to by has cost continue last also of operating from more in next focus quarter GP&T level, competitive activity facility adapt capital we in-basin will quarter on company first unit of an production declines Range's gas and G&A environment XX% the as years, reuse unit expense sales, in the dry and Over driven levels. incremental costs a per best-in-class granular since G&A to liquids XX% particular rolloff producing decline is year. existing gathering per year. and peers last producers. of of our areas current recovery. dry the gas few anticipate Are improved to per has competitive declined the cost only the are Cash item first lease

XXXX executive XX% to approximately in is estimated XXXX. to decline disclosed compensation senior As statement, the proxy compared expected

have savings subscriptions, consultants, such been data among identified as Additional and software in insurance others. areas brokers

noted performance of On the were specifically shares potential equity that though matter the be stock did issued. compensation that are should not expense, it shares mean grants, expensed, even

which evident in In change the the have in X/X outstanding experienced, forfeitures fact, over of significant X% year. diluted is been last shares

to we have been and spending, taken resiliency. all expenditures on While to continue to steps focus optimize profitability enhance

quarter cash $XX resulted Turning to Free the a in borrowings. in the balance sheet. from flow million revolver first reduction

is the seasonal, expect flow material the of business to generate cash balance free While over year. we the

on continue processes divestiture multiple addition, fronts. In

at focused our debt repayable redemption look debt, remain strengthening we and balances We over As our sheet under readily profile, a costs. early without comfortable layer we maturity revolver time. maintaining balance on the have reducing

we As diligence. sales, monetize conscientiously and opportunities. currently inventory. to in stages data negotiations opportunities to are several to asset various to These prudently rooms marketing it evaluate will from relates processes active continue working We're to are

the performance the proxy. incentive absolute goal, reduction detailed added as this was in of metric debt evidence As

back top-tier to efficient forward coupled through reduction, converting capital application look daily remains we framework, reduction for acreage unit XX% and are The free focus. to prior million developed relative allocation we this leverage returns target. allocate budget In we on we efforts. debt and rate. consistently Jeff, we cash weighing which base the capital a focus objectives into plan. creating of ratios, the focused beyond, program, to maximize remain within year, and summary, optimizing track value This from disciplined reinvestment the on a returns framework you. balancing XXXX As economic the tangible through remain we $XXX the capital margins balance flow, on capital on continued each XXXX evaluate In absolute from a of value, decision, a shareholder decline cost, capital to management with operations total efficiency, cost and is

Jeffrey Ventura

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

Operator

[Operator Instructions].

Advisors. The first with Marshall question Carver Energy comes from Heikkinen the line of

Marshall Carver

the year-end that Was or Do discussed any you have approximately color that XQ, in in on budget but your call, XX% came in due On full forecast? well costs to you trending why the came below year spending that. XQ of well timing spending lower? CapEx spend below

Dennis Degner

this have I'll the saying is operational job by continues a advancing to what into laterals, and our a drilling and ball really cost start our key to of this themes the on is a we basically The our couple quarter spend results helped to clearly Marshall, Dennis. it we see drill in do capital foot. efficiencies. of us significant of that highlight tried on long per morning of that translate portion great drilling in big team first reduction the we a did ability

more top between to year it XXX% that cooperation translate savings into savings, the look and on effort some an continue pretty harvest the what move The year today. us see then into is we XX% quarter last operating other savings through part is capital our waterside. helped a to fracturing team, as we strong it's our the we're as of the I significant thirdly, that efficiency seeing as balance across some area and translates recycling much versus we operators could quarters the saw good other mean, And have operations, gains on that you well. this of

at turned we dollars the encouraged we line superrich referenced the X that end So pad in by first There that already quarter that in spent. QX, are majority but had the of pretty some moved that wells. X the into those are wells of The we the that. weeks of the

the volumes will also advantage show those in which up in but up going to QX. we're we're capital show there seeing see, to few encouraged that dollars QX, a get So of be

Operator

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

Ronald Mills

as are given telling your know the move but referenced the rest strip, Any up actually on you strip looking pretty quarter prices you range, brought the the of seasonality year, of markets it the higher like starts when higher. NGL whether looks NGL that fourth absolute more? Dennis, through and low even the is even the relative, benefit about or than -- when additional are for trend to it your in look thoughts color, WTI, the are prices comments end NGLs I we particularly using down

Alan Engberg

Engberg, team. the the our Marketing I'm Liquids Vice Ron, of President thank Alan for is question. This

if Absolute I'll around about prices for some the liquids. guided So are I what roughly can up actually back February, barrel. actually, give similar $X there you see to color per are in quarter we

as you about is up bit a on Typically, up know NGLs quite on down. as pointed is you out, a always crude Crude lag the Now and up way way more. crude for $XX will barrel and the quarter. the

a of are there quarter this caused However, than events one-off couple that it lag more usual.

further They an this were Ship Houston with Exports, of Channel. So the year if that, along I impacted butane. by caused there the a was impacted traffic our at unusual contamination a of water day XX,XXX farm fire in per that tank Ship fog to And estimates, start and one drivers. ITC's barrels over were period. negatively that the Houston on with slowed of that big down LPG and by was were all there or propane big approximately starting with Added particular, Channel. XX-day way amount

million ship. So that X barrels didn't

resulted that right expecting. -- in was the on we're Europe those LPG delays in what big the both spike really a overseas know, prices, is have to seeing X exports, Asia, caused and change and in that arms market wasn't U.S. in years. note has come market world highest actually And the that in roughly that kind a to depend rest the just the of So of

a was expect on. cleared. capacity ship The pretty much This of we've one-off that, improve. coming got channel things with. we it's on is forward, new export Going event, top But over

year, X So into have export. backup time, ME they're going day X you XXX,XXX as were to this at Last that's This roughly the transporting also year those and running, we but is Hook Northeast, the in barrels local ME for per to mentioned Marcus going overseas. call, storage. in up XXX,XXX barrels

a the will big supply/demand U.S. So year balance day some of their will roughly barrels adds to capacity, capacity, quarter. XXX,XXX Gulf, Shifting third but most down butane debottlenecking XX-a-day in they're the capacity. of actually pipeline Enterprise the that They've added already debottlenecking is it's capacity. be up starting is Targa up with export that in has a next happened. that of That their impact And of per new Northeast. be adding new then

markets hungry we've are actually that's that roughly per you add production day, if propane XXX,XXX most just citing million for per produces going the that data capacity, butane day XXX,XXX and got month gas for 'XX. up So is barrels And barrels just I'm to that which for product. into EIA export reference, going international January just new the of U.S. per for day. is published, X.X was plant of barrels recent be

offshore. of that's supply So of be XX% additional to XXX,XXX going out X.X a million increment day going to that's be is going

reasons, So for as things we the year. we expect those improve on to continue through

there's that bit delayed. are second this part the that big off during We ethane were it things is half we familiar already big the come a first with, ethane, prices quarter. of little crackers have different story been coming online there. of For had new A a

leaned delays of from were they the delays. then year, first in learned we quarter, and last So further

fog we ethane X year. on prices. -- that quarter, have sorry, The later are coming So later in they're in impacted on ethylene this coming also new crackers but

new Permian Chinook's as pipeline finally, ethane came trading on from And in the at producers fractionator. the watch. the had added of take. Lone got pipeline for Star ethane Actually, little more quite $X.XX that that per capacity. feedstock Belvieu. of It on pressure Mont prices. new bit at then ethylene. every and Permian, has Ethylene locations also weather pound, values. allowed top making much natural February, allowed various We've to new a infrastructure, on values, gas when on fractionation incentive a recover index supply-side, Permian cooler can have painful is the flow negative pipelines the bit down WAHA negative as trading dropped ethane it's some pipeline put And been to prices main more So down we've to from On to

seen does there ethane, as we've as well. So But the happening story improve well. forward, that going on

will starting new moving ethane friends be per roughly MEX now. capacity the barrels then It demand. or be crackers, demand, roughly that XXX,XXX freed will on are on VLEC. with will bringing that quarter, It's online sorry, And day. them able that's per there MEX that's starting yes starting to add add that due XX,XXX per some So other to and more barrels out and to as up speak, hold well XX,XXX more as will and those -- that, thing to moving will the per channel X ethane And the starting day steam on later China MEX up, load, X year. be going of of barrels we've in Added product new of actually day that's this pipeline. ship third there'll then are cracker a actually of as then be Houston INEOS barrels XXX,XXX will we our world's towards X that the ethane of That are during up exports got at XX,XXX backup be carrier. new largest the

So for in prices. on butane and mentioned overall, next X with roughly day in we during propane earlier reasons of to X some the XXX,XXX expect to demand see ethane improvements prices, months, coming the new ethane barrels a I and

Ronald Mills

one. then one And Great. quick

first is timing, just over the given In in in quarter? completions acreage weighted through Or terms of the the dry superrich any seasonality of is of being it gas many position of the driving shift in year? remainder just terms of your a gas in the the moving completion function there to so area

Dennis Degner

based but infrastructure the team months at years. not and available of The couple be XX next in looking we internal gathering production system. be our that. next will only The utilization the curves of Ron. they'll at capacity and at And looks looking maximize planning upon we'll be have goal Yes, forecast, our where our type to

of of some most part mix, to to time, the Creek that to would X. to be Washington northern be So of brought going drivers. And year, when of I'd well example last point we compression it's as change the County see an the support tied in those directly we on Harmon I think a toward end in

gas takeaway that long saw then several ties going QX You haul of utilize wells was wet infrastructure us bringing to that at on Rover. then our to course through then that

time, we So tied best the utilize you'll to how but it at be see it can some fluctuations low. at to tends costs infrastructure keep and

Operator

next comes B. question FBR. Riley Your Rehan from the line with of Rashid

Rehan Rashid

earlier, does of well? maybe terms drive kind divestiture changed in efficiency what one? of I of divesting? per on around CapEx kind in could that's particular bit color XX% quick that's get how was Two area that, If more and the any two, the some think focus that I questions. frac a One, kind improvement and little timeline mentioned that color And of

Dennis Degner

call this frac to I'll for us start the morning. with the Mark. Thanks efficiencies hand and over on joining

this of I'll quantified we the operations, supporting winter the as per the cost see into translates cost you and over what equipment, all they're just balance On as goes had translated how operations we of time, look be morning, at When wells, of frac of efficiencies, between substantial savings drilling that because mainly per cetera. exactly will some hardware that us. during foot our but know that it's of we our non-winter supporting and et and completing our you savings it whether into that is winter, foot reduced the with along for look cost say,

seeing improved kind balance really crews of at of the a year, look some stabilize that continuous knowledge seeing also we're it to base operations on through starting into translate performance location, This year we're performance were our our efficiencies of in with So location. when point. ago, on that and increase you

should continue really this the we and that of year. So balance throughout what the like see expect

differences, a have see performed Now, service crews with but some seasonal bit the might our fluctuation, pointing little of you to back partner relationships. well, extremely

Mark Scucchi

Mark. is This

front, good not I facts striving We're can and underway. to there to the what in before, efforts various have to achieve. with some pin hopefully is a that variety some processes about negotiations, a we're from underway. we down the there's stages gives are of what comfort diligence to the rooms but of we've a talked again, And guidance number divestiture data us few as On timing, into point

year successful October So last last in royalty the year. closing on sale closing were of obviously, we and

PA, northeast all We will those we've noncore acreage consider potential we royalties mentioned ongoing. candidates, as dialogues again, are mentioned

of the in target incentive the can as Another measurements the importance proxy. urgency, management as read and on just absolute the the program not is kind sense interest of see timing as you debt-reduction but the factor an performance addition of in our the of alignment of well

debt are for strive that end high million there in targets specific to there be So at would maximize us to $XXX metric, reduction the for XXXX. that achieve to a

we're going broad not to transactions, how on specific we're or guidance while specific amounts dollar in to we're about striving those what and it timing So strokes of are give achieve. thinking

Rehan Rashid

Okay.

the Just divestiture thought the maybe a different way question same process. on to ask

of cost you that closer associated makes about Your get divest have to how and and equity, lower if to you much think else of assets cost what Or cash directly, as your kind sure it. so implied pricing, from of or go acceptable more the flow of not anything much away would deeper asked I'm cost cost by on but multiples these debt thinking your when you're kind more your would properly. Does kind your I closer is of be -- question to flows of limits? expect of than to of would kind debt cost cash you what of sense? you with debt you

Dennis Degner

Sure.

understand I think headed. where I you're

depend would type on talking answer the about. of you're what asset So

some acreage no is there For so the example, nonproducing of cash is flow.

our not about clearly So no value talking our asset inventory and a does portion in equity. it of base reflect we're or

metric applicable. be that So might the type of most valuation not

just value, and asset multiples at cash flow will look we you cash flow of can others, in to relates it valuation well. course, As kind of look at full-blown as that

So I very based and to in packages, these capital. of markets deleveraging relative transactions expect these the to investors or we all these each cost are on that each and acquirers of type corporate in say of be our interested the fully would reasonable

Operator

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

Brian Singer

then cost per you base some us you remind foot, evolving? ability to You how sufficient year push you risk per how push operational see and you lateral or you XX,XXX can mentioned those long feet until to continue would of that can with for acreage do either test, out lateral out see EURs expectations laterals And your well limitations? think the lengths foot

Dennis Degner

to this at point, drill. that in we're XX,XXX-foot really confident the length Brian, able lateral been we've

and referenced across sheet in that laterals historical our acreage drilling this where prior XX,XXX position, paper in as it also we to the been number think that certainly we've able wells, excess County you where both in a Washington we've we look feet. had of -- about of the do we we been were call, to at fewer When a we're of areas able of on in had maybe core around. do think I we but have wells cleaner substantial that

system operating blocky We've opportunity. length acreage continuous, type with and it been maximize team. coupled opportunity, the way lateral typically it an the gathering really us a to position, having affords that by being incrementing do really we So a -- to

any manage XX,XXX us -- feet say being you that because will understand resource rarely And of unconventional us we we the risk. successful want being in see go X,XXX kind us to So is being feet of in part to from part operation play an repeatable. of

feet we've XX,XXX the we results the gotten really today, to seeing. point like getting that So we're

for just that As we the was I'll the second. wells, we one few toward looked there those at/or XX,XXX, rich the over drilled. super type back of We One, last it are at of those of on look XX,XXX, these wells the above and quick last end at we both days. wells performance as reported year curve, The shift a at that still results type curve the other today.

push of normalized wells. a cost The So down as seen, basis mentioned we increase. see to as We've we as the much XX% foot. a per out really on what earlier, team continues drilling like we've

we've to XX,XXX like our point again reported the Average for to really feel lot year, to I going you we good the feet, always will when we on was out believe look space. we like to But we most X,XXX length the the we uncommon not a pointed feet see direction feet, it's but well, few be headed. spot that super-rich because capital-efficient have IP'ed this at our that's for a a is drilling filling references, those us we that of be cases So at so program. have maximize about the some goal XX,XXX we're length as of approach. But wells will lateral will like

Brian Singer

question. Great. And up then to divestiture the on follow

environment XX the has of directly either can to market Appalachia this an that via relative discuss how marketing upstream today broadly some been months compares XX ago? you for royalty to Given or in just and focus assets area time, interest

Dennis Degner

Sure.

say, has I'd area, investor spread of bid-ask the and evolved. evolution on interest depending the So

in So Atlantic gives in Sunrise North the online, spot curve, actual coming forward confidence physical transactions, for just greater basis forecasting. sales with East curves Pennsylvania not that and but example, seeing the potential actual market in economics in tightening, buyers the that the they're

strong, there types discussions and would remains parties room. is multiple evolve. of an variety that those to improvement. I would Pennsylvania, in Southwest parties continue investors I diverse that say So of each potential The interested data say and In pretty are

the successful inbound we that general, phone alive received known several example, saying, I A&D we "Hey, functioning. and something that sale, Royalty actually as had calls Just that, say So we you wish after consider." I fall announced party would market that of an is would last in

Operator

of Trotsenko question Jane with line comes next from Your the Stifel.

Yevgeniya Trotsenko

use in-basin you Range press a release, engaged mentioned on you bit developing in is natural actually little expand to demand local the in In the please support Could of that gas markets. that?

Dennis Degner

more that a to right in industry for seeing to that easy the in say, example that things like allow and Southwest to on place power have very kind very, to as of, that can a now be starting easy industry as just least Shell certainty you cracker other we example let's acreage our industries of imagine, inquiries We're One proximity be region. in-basin the now to with or see, Whether in liquidity with we would the footprint PA, to could move be to An at forward. you're us would you generation An strong utilized example. a point that the development discussions moving around that's of some more have come point resource that again demand. there an more or have and more would close in interest for as top see development.

with We are cost of can to make have a they going and continue reducing they that sure our at look opportunities thorough forward. going potentially be and to fit a good scrubbing those and portfolio how our part

Yevgeniya Trotsenko

point pricing on second And is I'm gas which that Northeast one my curious, is at? Pennsylvania, priced

Jeffrey Ventura

Much of like our gas priced Pennsylvania of Leidy. sold Northeast out is

Yevgeniya Trotsenko

Leidy.

thoughts is as levels And going Maybe thoughts, thinking be maybe current on Okay. Terryville. question this asset last the forward, marketing update should you on us well? your on update how it. Got Terryville, can your about and you activity we current if are

Dennis Degner

of activity kind going going around and the the a laid try to see. Appalachia. XX% of we've of with I'll a we're area groundwork year, the beginning the step standpoint, the forward, On-the-go XX% capital year to in Terryville a where spend this From back that to take Yes. it's

few to past that and the in months rig it We our we've We've technical the to has results where got up repeatability for been to pending have mid-year, we we thoughts likely on a the explore there. months place there really the we'll see and ahead. operating at the see competes a wrap most The over to drilling be continuing asset risk-adjusted year some find to and continuing that's got throughout that we're start test. sometime basis, results

standpoint. things you still we from and what excited months with imagine, look has we're it that XXXX are would trying like the are about and to balance compete here to and there over the asset Marcellus, 'XX, work of the that's we still ahead. in really As But through as the

Yevgeniya Trotsenko

now, assets right? to those marketing just are clarify, right you But not as of

Mark Scucchi

the out see This and budget it but and strengthening think property capital is XX% of that's from Mark, right the can assuming around the it year, no. and purpose evaluate capital allocation, client that there the about almost the marketed asset. managing being flow the of just It is about this the approach, think now -- we was actively done profit inventory science point, managing to cash and allocated that not that Dennis' as you the being to

in terms we everything the and value. just manage do overall, continue So the to to we'll optimize maximize of how we can portfolio

Operator

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

Sameer Panjwani

loss. leverage you cash target of organic reduction, and top-level for math flow I debt-reduction $XXX looks reconcile $X proxy, hoping which like proceeds the for X.Xx side for that of asset your believe with would to $XXX imply as sale year. of the kind top-level But I the hit million your your free million XXXX on implies was mentioned and targets assuming given of was billion you have my target any about debt EBITDA the you think assets I proceeds could without earlier the target it over that of expectations leverage

So those can provide you of reconcile that the two or some metrics? just the difference think between context should how we about X

Mark Scucchi

are linked, leverage commodity the beyond the producing on but change two they're in mathematically ratio So frankly can debt based outside course, prices other not because conceptually absolute of factors control. our hardwired and

and side debt well, example credit evaluate and so from ratio We will this why holistically. one But is of the important we balance leverage certainty debt-to-EBITDA over as at The it's you having cash there helps no the that of by debt on the to debt-to-EBITDA idea the growing the as add reduction. year, perspective could certainly ratio strengthening it look to sheet. trajectory. certainly at absolute just But an an improve absolute improving was XX% measure hedge faster

demonstrate concept of about we credit talking are metrics as an those behind debt-to-EBITDA. improving the host So well pairing fact the in that absolute X the entire is as reduction them, to among debt

considered. So the the evaluation sheet as balance holistic they're intended of function to together is

Sameer Panjwani

Yes. implied debt implying what's it? in that think into was the that absolute I sales additional asset about beyond of not guess, kind that it right reduction target the Okay. way the is was leverage my read the expect to target,

Mark Scucchi

processes We associated haven't we dollar or with given aggregate, any individually have underway. hard asset the any sales amount either

assets assets like you'd to that to crystallizing evaluations deployed the capital to the whatever but where suffice it in better say, value of packages, defer or it's can be non-core assign again, you I'll elsewhere to Range. about So that

Operator

We conference. the of are today's end nearing

Kashy go Energy for Simmons Harrison will to final We our question. of

Kashy Harrison

So a follow-up for quick I had Alan.

just your be opinion, properly do you to I incoming experience you pricing that on market efficient? is demand. the be gave and fairly some in ethane color global sales really more, wondering, And just the do great XX% market in there Or of demand? are field, the forward that, do you forward find that trend in think your could You the maybe a was on to Or expectation the you in market? ethane TI just improving based kind of forward more demand? be for whatever And is in assumption or perhaps tagging your bake then onto bit seeing volatile? does find

Alan Engberg

question. This is Alan. a It's good

market, is curve driven oil. or natural producer the The liquids natural for on chemical let's -- gas to similar liquids natural as, liquid quite aren't largely as curves gas the speculating Forward natural down gas say, the NGL activity. are active spread those are gas crude players activity though And say, aren't would naturally in to need because that even of markets have products than and liquid, the are a hedge short maybe the they less buyers hedgers the polymer physical let's that they markets. and that

but So to the of activity hedging dictated that extent often large by a of by the people's activity curve the shape also market for is view in of trading reason, producers. the

value what your of prices are question, can going that for strip. be. forward I no, answer to guide a forward to you actually market good It shifts So is believe the it's that today's always don't what get

that strip that I we've guide mentioned our propane So reasons in upside would question? -- on all I the in that Does ethane, the numbers with we is to and say butane. for based my to question that guide answer answering and previous believe published, the reference that that there's around your

Kashy Harrison

you. thank does. That

Operator

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

Jeffrey Ventura

any for thank you up and Thank with have team. you. to the this want questions that IR morning our just for call participating on free might feel everybody follow to I

Operator

Thank today's conference. in you your participation for

You at this may disconnect time.

Range Resources (RRC) 23 Apr 192019 Q1 Earnings call transcript