Despite selling virtually all its Barnett Shale properties in North Texas in April, Range Resources expects to "have fully replaced all of the Barnett production" by the end of this year's third quarter, CEO John Pinkerton said in an operations update issued prior to its upcoming release of second-quarter financial results after the stock market closes on Monday.
Pinkerton said the Fort Worth-based natural gas and oil producer will be able to boost its production numbers because of "excellent drilling results in the Marcellus Shale and Mid-Continent regions." The company has been among the leading producers in the Marcellus play in Pennsylvania and has benefited from robust production in the Mid-Continent region that includes Texas and Oklahoma.
Range lost production equivalent to more than 100 million cubic feet of natural gas per day as a result of its sale of Barnett Shale properties effective April 29. Despite that, Range said its second-quarter production volume averaged the equivalent of 508 million cubic feet of natural gas per day, an 8 percent increase over the second quarter of 2010.
Production for the second quarter of this year was 76 percent natural gas, 17 percent natural gas liquids (NGLs) and 7 percent crude oil, Range said in the operations update issued Monday.
Range said it received an average price equivalent to $5.63 per 1,000 cubic feet of natural gas in the second quarter, an 11 percent increase over a year earlier. Average prices it received were $4.63 per 1,000 cubic feet for natural gas, $50.07 per barrel for natural gas liquids and $80.42 per barrel for oil.
Pinkerton said Range is "well on track" to achieve its goal of achieving net production equivalent to 400 million cubic feet of natural gas per day in the Marcellus Shale by the end of this year.
Based on the performance of 103 Marcellus Shale horizontal wells that began producing in 2009 and 2010, Range is projecting that the estimated ultimate recovery, or lifetime production, from these wells will average the equivalent of 5.7 billion cubic feet of natural gas per wel, including about 4 billion cubic feet of gas and 281,000 barrels of liquids (NGLs and crude oil).
The estimated recovery per Marcellus horizontal well is two to three times the estimated lifetime production of many typical wells in the Barnett Shale.
Range stock (ticker: RRC) closed today at $63.52 per share, up $2.52, or 4.1 percent
--Jack Z. Smith
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