FORT WORTH, Texas--(Business Wire)--
RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its 2007
results. Production, total revenues, oil and gas sales revenues, cash
flow and earnings all reached record high levels for the year.
Reported total revenues were $862 million up 16%, oil and gas sales
revenues were $863 million up 44%, cash flow was $632 million up 43%
and earnings were $231 million up 45% or $1.54 diluted earnings per
share. The following measures are the most comparable to analysts'
estimates for the same amounts for the year which constitute non-GAAP
measures. Please see the accompanying tables for the calculation of
these non-GAAP measures. Oil and gas sales revenues including all
cash-settled derivatives totaled $944 million, a 38% increase over the
prior year. Cash flow from operations before changes in working
capital increased 44% to $674 million. Net income comparable to
analyst estimates was $253 million, increasing 63% from the prior
comparable year. Diluted earnings per share were $1.69, a 51%
increase. A 17% increase in production coupled with an 18% rise in
realized prices drove the results. Range replaced 537% of production
during the year at an all-in cost of $1.82 per mcfe. Proved reserves
increased 27% to 2.2 Tcfe.
Commenting, John H. Pinkerton, the Company's President and CEO,
said, "2007 was an outstanding year for Range and its stockholders.
Financially, record highs were achieved for all the key metrics both
on an absolute and per share basis. Operationally, production rose 17%
and proved reserves increased 27% at an attractive all-in cost of
$1.82 per mcfe. Looking ahead, we are in an excellent position to set
record results again in 2008. Our drilling inventory now exceeds
11,000 locations, and we are off to a fast start with our 2008
drilling program. Importantly, we continue to make solid progress with
regard to delineating and expanding our emerging plays. The unrisked
reserve potential of the drilling inventory and emerging plays far
exceeds our current proven reserves and will be the catalyst for our
future growth for many years to come."
Production for the year totaled 117.6 Bcfe, comprised of 90.5 Bcf
of gas and 4.5 million barrels of oil and liquids. Production rose in
each quarter of the year and averaged 322 Mmcfe per day. Range has
achieved consecutive production increases in each of the past 20
quarters. Wellhead prices, after adjustment for all cash-settled
hedges and derivatives, rose 18% to $8.03 per mcfe. The average gas
price rose 16% to $7.66 per mcf, as the average oil price rose 27% to
$60.13 a barrel. The cash margin per mcfe for 2007 rose to a record
$5.67 per mcfe, 22% higher than 2006.
Reported total revenues for the fourth quarter were $223 million
up 27%, oil and gas sales revenues were $241 million up 54%, cash flow
was $187 million up 53% and earnings were $34 million up significantly
over the $0.4 million of the prior year. Diluted earnings per share
for the fourth quarter were $0.22 as compared to a breakeven amount in
the prior year due to a loss on discontinued operations. The amounts
corresponding to analysts' estimates for the same measures which are
non-GAAP measures for the fourth quarter of 2007 are as follows (see
the accompanying tables for the calculation of these non-GAAP
measures). Oil and gas revenues, including all cash-settled
derivatives, rose 48% to $262 million, while realized prices increased
26% to $8.29 per mcf. Production in the quarter increased 17%,
averaging 343 Mmcfe per day. Cash flow from operations before changes
in working capital increased 64% to a record $190 million. During the
quarter, the Company provided a $6.4 million allowance for unproved
acreage, which reduced diluted earnings per share by three cents. Net
income comparable to analysts' estimates would have been $61 million
or $0.40 per diluted share, 90% greater than the comparable prior
year.
As previously reported, the Company replaced 537% of production in
2007. Drilling alone replaced 424% of production. Proved reserves at
December 31, 2007 totaled 2.2 Tcfe, including 1.8 Tcf of natural gas
and 67 million barrels of crude oil and liquids. Reserves increased
475 Bcfe or 27% during the year. At year-end, reserves were 82%
natural gas by volume, and the reserve life index stood at 17.7 years
based on fourth quarter production rates. The percentage of proved
developed reserves increased to 64% versus 63% in 2006. Independent
petroleum consultants reviewed 86% of the reserves by volume. At
year-end, the pretax present value of proved reserves, based on
constant prices and costs, discounted at 10% totaled $5.2 billion and
the after tax standardized measure was $3.7 billion. The reserve value
was based on year-end benchmark prices of $6.80 per Mmbtu and $95.98
per barrel NYMEX. The Company's all-in finding and development cost
averaged $1.82 per mcfe. Drilling expenditures, including $78 million
of acreage costs in 2007, totaled $894 million equating to a drill bit
finding and development cost of $1.79 per mcfe. The Company has set a
2008 capital budget, excluding acquisitions, of $1.065 billion to fund
the drilling of 968 (715 net) wells and 82 (66 net) recompletions.
Based on current futures prices and hedges in place, the 2008 capital
budget is anticipated to be funded with internal cash flow and asset
sales.
Range's drilling program continues to achieve excellent results.
At our Nora field in Virginia two separate pilot programs to test
downspacing of coal bed methane and tight gas sand wells are achieving
early positive results. Our first horizontal well was completed to the
Huron shale in the fourth quarter and achieved commercial rates. Ten
additional horizontal shale wells are planned here in 2008. Currently
the field is producing about 50 Mmcfe per day, net to Range's
interest. With continued positive results in our downspacing programs,
there could be as many as 6,000 remaining drilling locations. In our
North Texas Barnett Shale play, we currently own in excess of 100,000
net acres and production is now averaging 98 Mmcfe per day, a
three-fold increase versus the same time last year. Two new wells
drilled in Tarrant County were recently placed on production at
initial rates of 8.9 (6.2 net) and 8.3 (5.8 net) Mmcfe per day.
Finally, in the Marcellus Shale play in the Appalachian Basin our
leasehold position now totals 1.1 million net acres, of which 650,000
net acres are currently considered prospective for shale gas
development. Our latest horizontal shale completion just came online
at 3.3 Mmcfe per day. This is in addition to the two horizontal shale
completions announced last week which came on line at 4.7 and 4.0 mcfe
per day. In the last seven months, Range has drilled seven successive
horizontal shale wells in the play with initial production rates
ranging between 3.2 to 4.7 Mmcfe per day. Given our substantial
acreage position, this play represents as much as 10 to 15 Tcfe in
unproven unrisked reserve potential for the Company. In 2008, we plan
to drill a total of 60 Marcellus shale wells, 40 of which are planned
as horizontal wells.
The Company will host a conference call on Wednesday, February 27
at 1:00 p.m. ET to review these results. To participate in the call,
please dial 877-407-8035 and ask for the Range Resources 2007
financial results conference call. A replay of the call will be
available through March 5 at 877-660-6853. The conference ID for the
replay is 274505 and the Account number is 286.
A simultaneous webcast of the call may be accessed over the
Internet at www.rangeresources.com or www.vcall.com. To listen, please
go to either website in time to register and install any necessary
software. The webcast will be archived for replay on the Company's
website for 15 days.
Non-GAAP Financial Measures:
Earnings for 2007 included a $78.8 million mark-to-market loss on
certain derivative transactions, derivative ineffective hedging losses
of $820,000, a non-cash stock compensation expense of $52.3 million
and a gain on discontinued operations of $60.2 million net of tax.
Excluding such items, income before income taxes would have been $401
million, a 57% increase over the prior year. Adjusting for the
after-tax effect of these items, the Company's earnings would have
been $252.6 million in 2007 or $1.76 per share ($1.69 per diluted
share). If similar items were excluded, 2006 earnings would have been
$155.4 million or $1.16 per share ($1.12 per diluted share). Earnings
for 2006 included mark-to-market derivative gains of $86.5 million,
ineffective hedging gains of $6 million and $26 million of non-cash
stock compensation. (See reconciliation of non-GAAP earnings in the
accompanying table.) The Company believes results excluding these
items are more comparable to estimates provided by security analysts
and, therefore, are useful in evaluating operational trends of the
Company and its performance relative to other oil and gas producing
companies.
Cash flow from operations before changes in working capital as
defined in this release represents net cash provided by operations
before changes in working capital and exploration expense adjusted for
certain non-cash compensation items. Cash flow from operations before
changes in working capital is widely accepted by the investment
community as a financial indicator of an oil and gas company's ability
to generate cash to internally fund exploration and development
activities and to service debt. Cash flow from operations before
changes in working capital is also useful because it is widely used by
professional research analysts in valuing, comparing, rating and
providing investment recommendations of companies in the oil and gas
exploration and production industry. In turn, many investors use this
published research in making investment decisions. Cash flow from
operations before changes in working capital is not a measure of
financial performance under GAAP and should not be considered as an
alternative to cash flows from operations, investing, or financing
activities as an indicator of cash flows, or as a measure of
liquidity. A table is included which reconciles net cash provided by
operations to Cash flow from operations before changes in working
capital as used in this release.
The cash prices realized for oil and natural gas production
including the amounts realized on cash settled derivatives is a
critical component in the Company's performance tracked by investors
and professional research analysts in valuing, comparing, rating and
providing investment recommendations and forecasts of companies in the
oil and gas exploration and production industry. In turn, many
investors use this published research in making investment decisions.
Due to the GAAP disclosures of various hedging and derivative
transactions, such information is now reported in various lines of the
income statement. The Company believes that it is important to furnish
a table reflecting the details of the various components of each
income statement line to better inform the reader the details of each
amount and provide a summary of the realized cash-settled amounts
which historically were reported as oil and gas sales revenues. This
information will serve to bridge the gap between various readers'
understanding and fully disclose the information needed. On its
website, the Company provides additional comparative information on
prior periods.
RANGE RESOURCES CORPORATION (NYSE: RRC) is an independent oil and
gas company operating in the Southwestern, Appalachian and Gulf Coast
regions of the United States.
Except for historical information, statements made in this
release, including those relating to expected reserves quantities,
capital expenditures, drilling inventory, unrisked reserve potential
and emerging plays are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements are based on
assumptions and estimates that management believes are reasonable
based on currently available information; however, management's
assumptions and the Company's future performance are subject to a wide
range of business risks and uncertainties and there is no assurance
that these goals and projections can or will be met. Any number of
factors could cause actual results to differ materially from those in
the forward-looking statements. The Company undertakes no obligation
to publicly update or revise any forward-looking statements. Further
information on risks and uncertainties is available in the Company's
filings with the Securities and Exchange Commission, which are
incorporated by reference.
Finding costs from all sources is calculated by taking all cash
expenditures for drilling, development, acreage and acquisitions
divided by the sum of extensions, discoveries, additions, purchases
and revisions to reserve volumes. Drill bit finding costs is
calculated by taking all cash expenditures for drilling, development
and acreage costs divided by the sum of extensions, discoveries,
additions and revisions to reserves volumes.
The Securities and Exchange Commission has generally permitted oil
and gas companies, in filings made with the Securities and Exchange
Commission, to disclose only proved reserves that a company has
demonstrated by actual production or conclusive formation tests to be
economically and legally producible under existing economic and
operating conditions. We use the terms "potential," "probable,"
"possible" or "unproven" to describe volumes of reserves potentially
recoverable through additional drilling or recovery techniques that
the SEC's guidelines may prohibit us from including in filings with
the SEC. These estimates are by their nature more speculative than
estimates of proved reserves and accordingly are subject to
substantially greater risk of being actually realized by the Company.
While we believe our calculations of unproven drill sites and
estimation of unproven reserves and are reasonable, such calculations
and estimates have not been reviewed by third-party engineers or
appraisers and do not take into account any capital or commercial
constraints. Such disclosures as to "unproven reserve potential" has
not been risked for possible failure to find commercial quantities of
oil and gas reserves when drilled.
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*T
RANGE RESOURCES CORPORATION
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STATEMENTS OF INCOME
Based on GAAP reported
earnings with
additional details of
items included in each Three Months Ended Twelve Months Ended
line in Form 10-K December 31, December 31,
---------------------- -----------------------
(Unaudited, in
thousands, except
per share data) 2007 2006 2007 2006
--------- --------- --------- ---------
Revenues
Oil and gas sales (a) $240,901 $155,996 $862,537 $599,139
Transportation and
gathering 1,184 572 2,684 2,742
Transportation and
gathering - non-cash
stock compensation
(b) (97) (83) (394) (320)
Cash-settled
derivative gain
(a)(c) 21,033 13,759 71,822 49,939
Change in mark-to-
market on unrealized
derivatives (c) (38,598) 2,757 (78,769) 86,491
Ineffective hedging
gain (loss) (d) (1,322) 2,475 (820) 5,965
Gain (loss) on sale of
properties (d) (2) 176 20 21
Other (d) 284 915 5,011 835
--------- --------- --------- ---------
$223,383 $176,567 27% $862,091 $744,812 16%
--------- --------- --------- ---------
Expenses
Direct operating 30,021 23,485 106,901 79,858
Direct operating -
non-cash stock
compensation (b) 487 374 1,840 1,403
Production and ad
valorem taxes 9,485 8,445 42,443 36,415
Exploration 12,793 10,012 39,872 41,009
Exploration - non-cash
stock compensation
(b) 884 883 3,473 3,079
General and
administrative 13,319 9,924 50,180 35,591
General and
administrative - non-
cash stock
compensation (b) 4,535 3,948 18,248 14,295
Deferred compensation
plan (e) (10) 7,220 28,332 6,873
Interest 21,381 17,583 77,737 55,849
Depletion,
depreciation and
amortization 71,530 48,487 227,328 154,739
--------- --------- --------- ---------
164,425 130,361 26% 596,354 429,111 39%
--------- --------- --------- ---------
Income from continuing
operations before
income taxes 58,958 46,206 28% 265,737 315,701 -16%
Income taxes
Current (96) 97 320 1,912
Deferred 24,743 20,307 98,441 119,840
--------- --------- --------- ---------
24,647 20,404 98,761 121,752
--------- --------- --------- ---------
Income from continuing
operations 34,311 25,802 33% 166,976 193,949 -14%
Discontinued
operations, net of
taxes - (25,375) 63,593 (35,247)
--------- --------- --------- ---------
Net income $ 34,311 $ 427 NM $230,569 $158,702 45%
========= ========= ========= =========
Basic
Income from continuing
operations $ 0.23 $ 0.19 $ 1.16 $ 1.45
Discontinued
operations - (0.19) 0.44 (0.26)
--------- --------- --------- ---------
Net income $ 0.23 $ 0.00 NM $ 1.60 $ 1.19 35%
========= ========= ========= =========
Diluted
Income from continuing
operations $ 0.22 $ 0.18 $ 1.11 $ 1.39
Discontinued
operations - (0.18) 0.43 (0.25)
--------- --------- --------- ---------
Net income $ 0.22 $ 0.00 NM $ 1.54 $ 1.14 35%
========= ========= ========= =========
Weighted average shares
outstanding, as
reported
Basic 146,982 137,521 7% 143,791 133,751 8%
Diluted 153,032 142,544 7% 149,911 138,711 8%
(a) See separate oil and gas sales information table.
(b) Costs associated with FASB 123R which have been reflected in the
categories associated with the direct personnel costs.
(c) Included in Derivative fair value income in 10-K.
(d) Included in Other revenues in the 10-K.
(e) Reflects the change in the market value of the vested Company
stock and other investments during the period held in the deferred
compensation plan.
NM = not meaningful
*T
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RANGE RESOURCES CORPORATION
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STATEMENTS OF INCOME
Restated for Gulf of Mexico
Discontinued Three Months Ended December 31,
------------------------------------
Operations, a non-GAAP GOM 2007
Presentation 2007 Discontinued Including
(Unaudited, in thousands) As reported Operations GOM
----------- ------------- ----------
Revenues
Oil and gas sales (a) $ 240,901 $ - $ 240,901
Transportation and gathering 1,184 - 1,184
Transportation and gathering -
stock based compensation (97) - (97)
Cash-settled derivative gain
(a) 21,033 - 21,033
Change in mark-to-market on
unrealized derivatives (38,598) - (38,598)
Ineffective hedging gain (loss) (1,322) - (1,322)
Equity method investment (306) - (306)
Gain (loss) on sale of
properties (2) - (2)
Interest and other 590 - 590
----------- ------------- ----------
223,383 - 223,383
----------- ------------- ----------
Expenses
Direct operating 30,021 - 30,021
Direct operating - stock based
compensation 487 487
Production and ad valorem taxes 9,485 - 9,485
Exploration 12,793 - 12,793
Exploration - stock based
compensation 884 - 884
General and administrative 13,319 - 13,319
General and administrative -
stock based compensation 4,535 - 4,535
Non-cash compensation deferred
compensation plan (10) - (10)
Interest expense 21,381 - 21,381
Depletion, depreciation and
amortization 71,530 - 71,530
----------- ------------- ----------
164,425 - 164,425
----------- ------------- ----------
Income from continuing operations
before income taxes 58,958 - 58,958
Income taxes provision
Current (96) - (96)
Deferred 24,743 - 24,743
----------- ------------- ----------
24,647 - 24,647
----------- ------------- ----------
Income from continuing operations 34,311 - 34,311
Discontinued operations -
Austin Chalk, net of tax - - -
Discontinued operations - Gulf
of Mexico, net of tax - - -
----------- ------------- ----------
Net income $ 34,311 $ - $ 34,311
=========== ============= ==========
GOM 2007
OPERATING HIGHLIGHTS Discontinued Including
(Unaudited) 2007 Operations GOM
----------- ------------- ----------
Average Daily Production
Oil (bbl) 8,692 - 8,692
Natural gas liquids (bbl) 3,012 - 3,012
Gas (mcf) 273,097 - 273,097
Equivalents (mcfe) (b) 343,322 - 343,322
Average Prices Realized (c)
Oil (bbl) $ 60.25 $ - $ 60.25
Natural gas liquids (bbl) $ 51.83 $ - $ 51.83
Gas (mcf) $ 7.94 $ - $ 7.94
Equivalents (mcfe) (b) $ 8.29 $ - $ 8.29
Direct Operating Costs per mcfe
(d)
Field expenses $ 0.89 $ - $ 0.89
Workovers $ 0.06 $ - $ 0.06
----------- ------------- ----------
Total operating costs $ 0.95 $ - $ 0.95
=========== ============= ==========
STATEMENTS OF INCOME
Restated for Gulf of Mexico
Discontinued Three Months Ended December 31,
------------------------------------
Operations, a non-GAAP GOM 2006
Presentation 2006 Discontinued Including
(Unaudited, in thousands) As reported Operations GOM
----------- ------------- ----------
Revenues
Oil and gas sales (a) $ 155,996 $ 7,568 $ 163,564
Transportation and gathering 572 9 581
Transportation and gathering -
stock based compensation (83) - (83)
Cash-settled derivative gain
(a) 13,759 - 13,759
Change in mark-to-market on
unrealized derivatives 2,757 - 2,757
Ineffective hedging gain (loss) 2,475 - 2,475
Equity method investment 609 - 609
Gain (loss) on sale of
properties 176 - 176
Interest and other 306 (17) 289
----------- ------------- ----------
176,567 7,560 184,127
----------- ------------- ----------
Expenses
Direct operating 23,485 3,378 26,863
Direct operating - stock based
compensation 374 - 374
Production and ad valorem taxes 8,445 89 8,534
Exploration 10,012 (10) 10,002
Exploration - stock based
compensation 883 - 883
General and administrative 9,924 - 9,924
General and administrative -
stock based compensation 3,948 - 3,948
Non-cash compensation deferred
compensation plan 7,220 - 7,220
Interest expense 17,583 544 18,127
Depletion, depreciation and
amortization 48,487 3,531 52,018
----------- ------------- ----------
130,361 7,532 137,893
----------- ------------- ----------
Income from continuing operations
before income taxes 46,206 28 46,234
Income taxes provision
Current 97 - 97
Deferred 20,307 10 20,317
----------- ------------- ----------
20,404 10 20,414
----------- ------------- ----------
Income from continuing operations 25,802 18 25,820
Discontinued operations -
Austin Chalk, net of tax (25,393) - (25,393)
Discontinued operations - Gulf
of Mexico, net of tax 18 (18) -
----------- ------------- ----------
Net income $ 427 $ - $ 427
=========== ============= ==========
GOM 2006
OPERATING HIGHLIGHTS Discontinued Including
(Unaudited) 2006 Operations GOM
----------- ------------- ----------
Average Daily Production
Oil (bbl) 8,417 325 8,742
Natural gas liquids (bbl) 2,826 - 2,826
Gas (mcf) 212,559 11,533 224,092
Equivalents (mcfe) (b) 280,013 13,487 293,500
Average Prices Realized (c)
Oil (bbl) $ 49.43 $ 40.07 $ 49.09
Natural gas liquids (bbl) $ 29.59 $ - $ 29.59
Gas (mcf) $ 6.33 $ 6.00 $ 6.31
Equivalents (mcfe) (b) $ 6.59 $ 6.10 $ 6.57
Direct Operating Costs per mcfe
(d)
Field expenses $ 0.86 $ 1.77 $ 0.91
Workovers $ 0.05 $ 0.95 $ 0.08
----------- ------------- ----------
Total operating costs $ 0.91 $ 2.72 $ 0.99
=========== ============= ==========
(a) See separate oil and gas sales information table.
(b) Oil and natural gas liquids are converted to gas equivalents on a
basis of six mcf per barrel.
(c) Average prices, including all cash-settled derivatives.
(d) Excludes non-cash stock compensation.
*T
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RANGE RESOURCES CORPORATION
----------------------------------------------------------------------
STATEMENTS OF INCOME
Restated for Gulf of Mexico
Discontinued Twelve Months Ended December 31,
------------------------------------
Operations, a non-GAAP GOM 2007
Presentation 2007 Discontinued Including
(Unaudited, in thousands) As reported Operations GOM
----------- ------------- ----------
Revenues
Oil and gas sales (a) $ 862,537 $ 9,938 $ 872,475
Transportation and gathering 2,684 10 2,694
Transportation and gathering -
stock based compensation (394) - (394)
Cash-settled derivative gain
(a) 71,822 - 71,822
Change in mark-to-market on
unrealized derivatives (78,769) - (78,769)
Ineffective hedging gain (loss) (820) - (820)
Equity method investment 974 - 974
Gain (loss) on sale of
properties 20 - 20
Interest and other 4,037 (1) 4,036
----------- ------------- ----------
862,091 9,947 872,038
----------- ------------- ----------
Expenses
Direct operating 106,901 2,477 109,378
Direct operating - stock based
compensation 1,840 - 1,840
Production and ad valorem taxes 42,443 105 42,548
Exploration 39,872 - 39,872
Exploration - stock based
compensation 3,473 - 3,473
General and administrative 50,180 47 50,227
General and administrative -
stock based compensation 18,248 - 18,248
Non-cash compensation deferred
compensation plan 28,332 - 28,332
Interest expense 77,737 594 78,331
Depletion, depreciation and
amortization 227,328 3,325 230,653
----------- ------------- ----------
596,354 6,548 602,902
----------- ------------- ----------
Income from continuing operations
before income taxes 265,737 3,399 269,136
Income taxes provision
Current 320 - 320
Deferred 98,441 1,190 99,631
----------- ------------- ----------
98,761 1,190 99,951
Income from continuing operations 166,976 2,209 169,185
Discontinued operations -
Austin Chalk, net of tax (411) - (411)
Discontinued operations - Gulf
of Mexico, net of tax 64,004 2,209 61,795
----------- ------------- ----------
Net income $ 230,569 $ - $ 230,569
=========== ============= ==========
GOM 2007
OPERATING HIGHLIGHTS Discontinued Including
(Unaudited) 2007 Operations GOM
----------- ------------- ----------
Average Daily Production
Oil (bbl) 9,205 106 9,311
Natural gas liquids (bbl) 3,054 - 3,054
Gas (mcf) 245,465 2,612 248,077
Equivalents (mcfe) (b) 319,016 3,251 322,267
Average Prices Realized (c)
Oil (bbl) $ 60.16 $ 58.17 $ 60.13
Natural gas liquids (bbl) $ 41.40 $ - $ 41.40
Gas (mcf) $ 7.66 $ 8.06 $ 7.66
Equivalents (mcfe) (b) $ 8.02 $ 8.38 $ 8.03
Direct Operating Costs per mcfe
(d)
Field expenses $ 0.86 $ 1.78 $ 0.87
Workovers $ 0.06 $ 0.31 $ 0.06
----------- ------------- ----------
Total operating costs $ 0.92 $ 2.09 $ 0.93
=========== ============= ==========
STATEMENTS OF INCOME
Restated for Gulf of Mexico
Discontinued Twelve Months Ended December 31,
------------------------------------
Operations, a non-GAAP GOM 2006
Presentation 2006 Discontinued Including
(Unaudited, in thousands) As reported Operations GOM
----------- ------------- ----------
Revenues
Oil and gas sales (a) $ 599,139 $ 34,850 $ 633,989
Transportation and gathering 2,742 85 2,827
Transportation and gathering -
stock based compensation (320) - (320)
Cash-settled derivative gain
(a) 49,939 - 49,939
Change in mark-to-market on
unrealized derivatives 86,491 - 86,491
Ineffective hedging gain (loss) 5,965 - 5,965
Equity method investment 548 - 548
Gain (loss) on sale of
properties 21 - 21
Interest and other 287 (19) 268
----------- ------------- ----------
744,812 34,916 779,728
----------- ------------- ----------
Expenses
Direct operating 79,858 10,963 90,821
Direct operating - stock based
compensation 1,403 - 1,403
Production and ad valorem taxes 36,415 500 36,915
Exploration 41,009 1,164 42,173
Exploration - stock based
compensation 3,079 - 3,079
General and administrative 35,591 - 35,591
General and administrative -
stock based compensation 14,295 - 14,295
Non-cash compensation deferred
compensation plan 6,873 - 6,873
Interest expense 55,849 1,728 57,577
Depletion, depreciation and
amortization 154,739 14,922 169,661
----------- ------------- ----------
429,111 29,277 458,388
----------- ------------- ----------
Income from continuing operations
before income taxes 315,701 5,639 321,340
Income taxes provision
Current 1,912 - 1,912
Deferred 119,840 1,974 121,814
----------- ------------- ----------
121,752 1,974 123,726
Income from continuing operations 193,949 3,665 197,614
Discontinued operations -
Austin Chalk, net of tax (38,912) - (38,912)
Discontinued operations - Gulf
of Mexico, net of tax 3,665 (3,665) -
----------- ------------- ----------
Net income $ 158,702 $ - $ 158,702
=========== ============= ==========
GOM 2006
OPERATING HIGHLIGHTS Discontinued Including
(Unaudited) 2006 Operations GOM
----------- ------------- ----------
Average Daily Production
Oil (bbl) 8,326 331 8,657
Natural gas liquids (bbl) 2,991 - 2,991
Gas (mcf) 193,734 12,477 206,211
Equivalents (mcfe) (b) 261,639 14,458 276,097
Average Prices Realized (c)
Oil (bbl) $ 47.46 $ 42.48 $ 47.27
Natural gas liquids (bbl) $ 33.62 $ - $ 33.62
Gas (mcf) $ 6.62 $ 6.53 $ 6.61
Equivalents (mcfe) (b) $ 6.80 $ 6.60 $ 6.79
Direct Operating Costs per mcfe
(d)
Field expenses $ 0.80 $ 1.48 $ 0.84
Workovers $ 0.04 $ 0.60 $ 0.06
----------- ------------- ----------
Total operating costs $ 0.84 $ 2.08 $ 0.90
=========== ============= ==========
(a) See separate oil and gas sales information table.
(b) Oil and natural gas liquids are converted to gas equivalents on a
basis of six mcf per barrel.
(c) Average prices, including all cash-settled derivatives.
(d) Excludes non-cash stock compensation.
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RANGE RESOURCES CORPORATION
----------------------------------------------------------------------
BALANCE SHEETS
(Audited, in thousands)
December 31, December 31,
2007 2006
------------ ------------
Assets
Current unrealized derivative gain $ 53,018 $ 93,588
Other current assets 208,796 137,872
Assets held for sale - 79,304
Assets of discontinued operation - 78,161
Oil and gas properties 3,503,808 2,608,088
Transportation and field assets 61,126 47,143
Unrealized derivative gain 1,082 61,068
Other 188,678 82,450
------------ ------------
$ 4,016,508 $ 3,187,674
============ ============
Liabilities and Stockholders' Equity
Liabilities of discontinued operation $ - $ 28,333
Current asset retirement obligation 1,903 3,853
Current unrealized derivative loss 30,457 4,621
Other current liabilities 273,073 214,878
Bank debt 303,500 452,000
Subordinated notes 847,158 596,782
------------ ------------
Total long-term debt 1,150,658 1,048,782
------------ ------------
Deferred taxes 590,786 468,643
Unrealized derivative loss 45,819 266
Deferred compensation liability 120,223 90,094
Long-term asset retirement obligation 75,567 72,043
Common stock and retained earnings 1,760,181 1,219,640
Treasury stock (5,334) -
Other comprehensive income (26,825) 36,521
------------ ------------
Total stockholders' equity 1,728,022 1,256,161
------------ ------------
$ 4,016,508 $ 3,187,674
============ ============
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RANGE RESOURCES CORPORATION
----------------------------------------------------------------------
CASH FLOWS FROM OPERATIONS
(Unaudited, in thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Net income $ 34,311 $ 427 $230,569 $158,702
Adjustments to reconcile net
income to net cash provided
by operations:
Gain from discontinued
operations - 25,375 (63,593) 35,247
Gain from equity investment 306 (609) (974) (548)
Deferred income tax
(benefit) 24,743 20,307 98,441 119,840
Depletion, depreciation and
amortization 71,530 48,486 227,328 154,738
Exploration dry hole costs 6,077 5,798 15,149 15,089
Change in mark-to-market on
unrealized derivatives 38,598 (2,757) 78,769 (86,491)
Ineffective hedging (gain)
loss 1,322 (2,476) 820 (5,654)
Allowance for bad debts - 80 - 80
Amortization of deferred
issuance costs 610 606 2,277 1,827
Deferred and stock-based
compensation 7,382 13,616 54,152 27,455
(Gain) loss on sale of
assets and other (35) (69) 2,212 940
Changes in working capital:
Accounts receivable (20,975) 862 (50,570) 30,185
Inventory and other 632 754 (1,040) (1,157)
Accounts payable 17,043 12,752 28,640 (5,049)
Accrued liabilities 5,028 (1,308) 9,922 (3,695)
--------- --------- --------- ---------
Net changes in working
capital 1,728 13,060 (13,048) 20,284
--------- --------- --------- ---------
Net cash provided from
continuing operations $186,572 $121,844 $632,102 $441,509
========= ========= ========= =========
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RECONCILIATION OF CASH FLOWS,
a non-GAAP measure
(Unaudited, in thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Net cash provided from
continuing operations, as
reported $186,572 $121,844 $632,102 $441,509
Net change in working
capital (1,728) (13,060) 13,048 (20,284)
Exploration expense 6,716 4,214 24,723 25,920
Cash flow from Gulf of
Mexico properties - 3,549 6,829 21,725
Other (1,658) (684) (3,123) (1,977)
--------- --------- --------- ---------
Cash flow from operations
before changes in working
capital, non-GAAP measure $189,902 $115,863 $673,579 $466,893
========= ========= ========= =========
ADJUSTED WEIGHTED AVERAGE
SHARES OUTSTANDING
(Unaudited, in thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2007 2006 2007 2006
-------- ---------- --------- ---------
Basic:
Weighted average shares
outstanding 149,323 138,724 145,869 135,016
Stock held by deferred
compensation plan (2,341) (1,203) (2,078) (1,265)
-------- ---------- --------- ---------
146,982 137,521 143,791 133,751
======== ========== ========= =========
Dilutive:
Weighted average shares
outstanding 149,323 138,724 145,869 135,016
Dilutive stock options under
treasury method 3,709 3,820 4,042 3,695
-------- ---------- --------- ---------
153,032 142,544 149,911 138,711
======== ========== ========= =========
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RANGE RESOURCES CORPORATION
----------------------------------------------------------------------
OIL AND GAS
SALES
INFORMATION
A Non-GAAP
Measure
Including Gulf Based upon Statements of Income Including
of Mexico Gulf of Mexico Discontinued Operations
------------------------------------------------------
Discontinued
Operations
(Unaudited, in
thousands,
except per unit Three Months Ended Twelve Months Ended
data) December 31, December 31,
------------------------------------------------------
2007 2006 2007 2006
---------- ----------- ------------ ------------
Oil and gas
sales
components:
Oil sales $ 65,667 $ 47,994 $ 228,947 $ 197,813
NGL sales 14,361 7,693 46,152 36,705
Gas sales 170,780 121,558 593,215 495,920
Cash-settled
hedges
(effective):
Crude oil (16,687) (8,516) (23,755) (48,444)
Natural gas 6,780 (5,165) 27,916 (48,005)
---------- ----------- ------------ ------------
Total oil and
gas sales, as
reported $ 240,901 $ 163,564 47% $ 872475 $ 633,989 38%
========== =========== ============ ============
Derivative fair
value income
(loss)
components:
Cash-settled
derivatives
(ineffective):
Crude oil $ (799) $ - $ (828) $ -
Natural gas 21,832 13,759 72,650 49,939
Change in mark-
to-market on
unrealized
derivatives (39,920) 5,232 (79,589) 92,456
---------- ----------- ------------ ------------
Total derivative
fair value
income, as
reported $ 18,887 $ 18,991 $ (7,767) $ 142,395
========== =========== ============ ============
Oil and gas
sales,
including cash-
settled
derivatives:
Oil sales $ 48,181 $ 39,478 $ 204,364 $ 149,369
Natural gas
liquid sales 14,361 7,693 46,152 36,705
Gas sales 199,392 130,152 693,781 497,854
---------- ----------- ------------ ------------
Total $ 261,934 $ 177,323 48% $ 944,297 $ 683,928 38%
========== =========== ============ ============
Production
during the
period:
Oil (bbl) 799,676 804,275 -1% 3,398,534 3,159,623 8%
Natural gas
liquid (bbl) 277,105 259,971 7% 1,114,730 1,091,785 2%
Gas (mcf) 25,124,892 20,616,478 22% 90,547,993 75,266,847 20%
Equivalent
(mcfe) (a) 31,585,578 27,001,954 17% 117,627,577 100,775,295 17%
Average prices
realized,
including cash-
settled hedges
and
derivatives:
Crude oil (per
bbl) $ 60.25 $ 49.09 23% $ 60.13 $ 47.27 27%
Natural gas
liquid (per
bbl) $ 51.83 $ 29.59 75% $ 41.40 $ 33.62 23%
Gas (per mcf) $ 7.94 $ 6.31 26% $ 7.66 $ 6.61 16%
Equivalent (per
mcfe) (a) $ 8.29 $ 6.57 26% $ 8.03 $ 6.79 18%
(a) Oil and natural gas liquids are converted to gas equivalents on a
basis of six mcf per barrel.
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RANGE RESOURCES CORPORATION
----------------------------------------------------------------------
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES AS REPORTED TO INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES EXCLUDING CERTAIN NON-CASH ITEMS, a non-GAAP measure
(Unaudited, in
thousands, except per Three Months Ended Twelve Months Ended
share data) December 31, December 31,
---------------------- -----------------------
2007 2006 2007 2006
--------- -------- --------- ---------
As reported $ 58,958 $46,206 28% $265,737 $315,701 -16%
Adjustment for certain
non-cash items
(Gain) loss on sale
of properties 2 (176) (20) (21)
Gulf of Mexico -
discontinued
operations - 28 3,399 5,639
Change in mark-to-
market on unrealized
derivatives 38,598 (2,757) 78,769 (86,491)
Ineffective hedging
(gain) loss 1,322 (2,475) 820 (5,965)
Amortization of
ineffective interest
hedges - - - 311
Transportation and
gathering - non-cash
stock compensation 97 83 394 320
Direct operating -
non-cash stock
compensation 487 374 1,840 1,403
Exploration expenses
- non-cash stock
compensation 884 883 3,473 3,079
General &
administrative -
non-cash stock
compensation 4,535 3,948 18,248 14,295
Deferred compensation
plan - non-cash
stock compensation (10) 7,220 28,332 6,873
--------- -------- --------- ---------
As adjusted 104,873 53,334 97% 400,992 255,144 57%
Income taxes, adjusted
Current (96) 97 320 1,912
Deferred 44,014 23,437 148,063 97,806
--------- -------- --------- ---------
Net income excluding
certain items, a non-
GAAP measure $ 60,955 $29,800 105% $252,609 $155,426 63%
========= ======== ========= =========
Non-GAAP earnings per
share
Basic $ 0.41 $ 0.22 86% $ 1.76 $ 1.16 52%
========= ======== ========= =========
Diluted $ 0.40 $ 0.21 90% $ 1.69 $ 1.12 51%
========= ======== ========= =========
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HEDGING POSITION
As of February 26,
2008 Gas Oil
------------------------ -----------------------
(Unaudited) Volume Average Volume Average
Hedged Hedge Hedged Hedge
(Mmbtu/d) Prices (Bbl/d) Prices
--------- -------------- ------- ---------------
Calendar 2008 Swaps 155,000 $8.97 - -
Calendar 2008 Collars 70,000 $8.01 - $10.83 9,000 $59.34 - $75.48
Calendar 2009 Swaps 70,000 $8.38 - -
Calendar 2009 Collars 140,000 $8.24 - $9.19 8,000 $64.01 - $76.00
Note: Details as to the Company's hedges are posted on its website and
are updated periodically.
*T
Range Resources Corporation
Rodney Waller, Senior Vice President, 817-870-2601
or
David Amend, Investor Relations Manager, 817-870-2601
or
Karen Giles, Corporate Communications Manager,
817-870-2601
www.rangeresources.com
Copyright Business Wire 2008
