Range Announces 2013 Capital Spending and Divestiture Plans

  Range Announces 2013 Capital Spending and Divestiture Plans

Business Wire

FORT WORTH, TEXAS -- December 12, 2012

RANGE RESOURCES CORPORATION (NYSE: RRC) today announced that it has set its
2013 capital spending budget at $1.3 billion. The capital budget includes
approximately $1.1 billion for drilling and recompletions, $100 million for
leasehold and renewals, $75 million for pipelines and facilities and $25
million for seismic. Approximately 85% of the budget will be targeted toward
liquids-rich and oil projects predominately in the Marcellus Shale and
Horizontal Mississippian plays. The 2013 capital budget is approximately $300
million less than the expected 2012 capital expenditures, reflecting a $200
million decrease in dry gas drilling and a $100 million reduction in expected
leasehold expenditures. Range projects that the 2013 capital budget will
generate 20% – 25% year-over-year production growth in 2013.

In 2013, Range will be focusing on its Marcellus liquids-rich area and its
Horizontal Mississippian play. These projects have the highest estimated rates
of return in the Company’s portfolio. Range has a combined acreage position in
these two areas of approximately 500,000 acres providing a multi-year growth
platform. The reduction in dry gas drilling will take place primarily in
northeastern Pennsylvania where the Company will reduce its activity from four
to five rigs in 2012 to one rig in 2013.

In addition to generating strong rates of return, Range anticipates that its
2013 capital program will continue to drive solid double digit per share
growth, debt adjusted, in both production and reserves. Range expects to post
its third consecutive year of double digit per share production growth and its
eighth consecutive year of double digit per share reserves growth in 2013. The
projected growth for 2013 is expected to be accomplished at an average all-in
finding and development cost of $1.00 per mcfe or less, similar to previous
years.

Range currently plans to fund the 2013 capital budget from operating cash
flow, proceeds from asset sales and its available liquidity under the
Company’s bank credit facility. Range has engaged Bank of America Merrill
Lynch to market certain of its Permian Basin properties in southeast New
Mexico and West Texas. The data room is scheduled to open in early January.
The properties to be marketed are currently producing approximately 18 Mmcfe
per day with 30% being oil and NGLs. Assuming completion of the asset sales
and based on current strip prices, the Company’s total debt to EBITDAX
leverage ratio is expected to strengthen from the anticipated 3.3x ratio at
year-end 2012 to 2.9x or below during 2013.

Commenting on its 2013 capital budget, Jeff Ventura, the Company’s President
and CEO, said, “Our 2013 capital program is designed to deliver outstanding
results. The 2013 program is expected to deliver 20% – 25% production growth
while strengthening our balance sheet. We have the flexibility to shift
capital from dry gas drilling to our liquids-rich plays which generate
exceptional returns for our shareholders. In addition, we expect to achieve
double digit per share growth in production and reserves while continuing to
focus on reducing expenses in our already low cost structure. As we finish up
2012 and look forward to 2013, Range is very well positioned as our high
quality portfolio of low cost drilling projects covering over two million
acres of leasehold should generate attractive returns for our shareholders for
many years to come.”

Non-GAAP Financial Measures

Range has referred to a “total debt to EBITDAX ratio” in this release to
measure relative leverage of the Company. This ratio is calculated by dividing
last twelve months EBITDAX into the sum of the Company’s bank debt and
subordinated notes shown on the consolidated balance sheets. The ratio is
expressed in the number of annual EBITDAX amounts required to equal the
outstanding debt amount, where the “X” refers to coverage “times.” EBITDAX is
defined as earnings before interest, income taxes, depletion, depreciation and
amortization and exploration expense. EBITDAX used by the Company for this
calculation is found in “Supplemental Tables” posted for each respective
quarter on its website under the tab “Investor Relations.” We believe that the
presentation of the total debt to EBITDAX ratio is relevant to our investors
because it presents a relative leverage metric which is commonly used by
investors and the debt rating agencies to evaluate a company’s ability to
service its current debt and/or take on more debt.

Range has used in this release a commonly used metric in the investment
community to measure our ability to establish a long-term trend of adding
reserves at a reasonable cost – finding and development cost per mcfe. It is
important to economically find and develop new reserves that will offset
produced volumes and provide for future production given the inherent decline
of hydrocarbon reserves as they are produced. We believe the ability to
develop a competitive advantage over other natural gas and oil companies is
dependent on adding reserves in our core areas at lower costs than our
competition.

Finding and development cost per unit is a non-GAAP metric used in the
exploration and production industry by companies, investors and analysts. The
calculations presented by the Company are based on costs incurred excluding
asset retirement obligations and divided by proved reserve additions
(extensions, discoveries and additions shown in the summary of changes in
proved reserves table) adjusted for the changes in proved reserves for
performance revisions and/or price revisions as stated in each instance in the
release. This calculation does not include the future development costs
required for the development of proved undeveloped reserves. The SEC method of
computing finding costs contains additional cost components and, therefore,
based on that methodology, results in a higher number. A reconciliation of the
two methods for prior years is shown on our website at www.rangeresources.com.

RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading independent oil and
natural gas producer with operations focused in Appalachia and the southwest
region of the United States. The Company pursues an organic growth strategy
targeting high return, low-cost projects within its large inventory of low
risk, development drilling opportunities. The Company is headquartered in Fort
Worth, Texas. More information about Range can be found at
www.rangeresources.com and www.myrangeresources.com.

Except for historical information, statements made in this release such as
expected rates of return, estimated ultimate recovery volumes, expected high
returns, expected low-costs, expected per share growth, expected geological
results, expected de-risking of the play, expected future spacing units,
expected future decline rates, expected infrastructure availability, expected
improvement in well performance, expected greater capital efficiency, expected
addition of future value for shareholders, expected amount of future capital
spending, expected timing, methods utilized and number of rigs related to
drilling operations and expected timing of infrastructure improvements 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 Range’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,
including, but not limited to, the volatility of oil and gas prices, the
results of hedging transactions, the costs and results of drilling and
operations, the timing of production, mechanical and other inherent risks
associated with oil and gas production, weather, the availability of drilling
equipment, changes in interest rates, litigation, uncertainties about reserve
estimates and environmental risks. Range undertakes no obligation to publicly
update or revise any forward-looking statements.

Estimated ultimate recovery, or “EUR,” refers to our management’s internal
estimates of per well hydrocarbon quantities that may be potentially recovered
from a hypothetical future well completed as a producer in the area. These
quantities do not necessarily constitute or represent reserves within the
meaning of the Society of Petroleum Engineer’s Petroleum Resource Management
System or the SEC’s oil and natural gas disclosure rules. Our management
estimated these ultimate recoveries based on our previous operating experience
in the given area and publicly available information relating to the
operations of producers who are conducting operating in these areas. Actual
quantities that may be ultimately recovered from Range's interests may differ
substantially. Factors affecting ultimate recovery include the scope of
Range's drilling program, which will be directly affected by the availability
of capital, drilling and production costs, commodity prices, availability of
drilling services and equipment, drilling results, lease expirations,
transportation constraints, regulatory approvals, field spacing rules,
recoveries of gas in place, length of horizontal laterals, actual drilling
results, including geological and mechanical factors affecting recovery rates
and other factors. Estimates of ultimate recoveries may change significantly
as development of our resource plays provides additional data. In addition,
our production forecasts and expectations for future periods are dependent
upon many assumptions, including estimates of production decline rates from
existing wells and the undertaking and outcome of future drilling activity,
which may be affected by significant commodity price declines or drilling cost
increases.

Further information on risks and uncertainties is available in Range’s filings
with the Securities and Exchange Commission (“SEC”), which are incorporated by
reference. Investors are urged to consider closely the disclosure in our most
recent Annual Report on Form 10-K, available from our website at
www.rangeresources.com or by written request to 100 Throckmorton Street, Suite
1200, Fort Worth, Texas 76102. You can also obtain this Form 10-K by calling
the SEC at 1-800-SEC-0330.

Contact:

Range Resources Corporation
Investor Contacts:
Rodney Waller, 817-869-4258
Senior Vice President
or
David Amend, 817-869-4266
Investor Relations Manager
or
Laith Sando, 817-869-4267
Senior Financial Analyst
or
Michael Freeman, 817-869-4264
Financial Analyst
or
Media Contact:
Matt Pitzarella, 724-873-3224
Director of Corporate Communications
www.rangeresources.com
 
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