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Range Resources 1Q Profit Soars, Beats Estimates

The Associated Press

FORT WORTH, Texas (AP) — Independent oil and gas company Range Resources Corp. said its first-quarter net income soared and its adjusted earnings beat Wall Street expectations, driven by hedging gains, rising production and costs savings, which offset the impact of falling commodity prices.

After the market closed on Tuesday, the company reported earnings of $32.6 million, or 21 cents per share, compared with $1.7 million, or 1 cent per share, during the same period last year. Production climbed 12 percent over the prior-year quarter to an average of 415.8 million cubic feet equivalent (mmcfe).

Excluding certain non-cash items, income would have been $38.4 million, or 24 cents per share, compared with $96.4 million, or 63 cents per share, in the first quarter of 2008. Range Resources said the latest quarter includes a $31.1 million mark-to-market gain on unrealized derivatives, a $12.4 million expense recorded for the mark-to-market in the deferred compensation plan and $8.3 million of stock compensation expense.

Profit estimates by analysts came to an average of 21 cents per share, according to a survey by Thomson Reuters. Analysts typically exclude nonrecurring items.

Revenue jumped 35 percent to $276.4 million, up from $205.3 million in the prior-year period. Analysts forecast revenue of $251.8 million, on average.

Range reported that is Marcellus shale division continued to make solid progress in the first quarter. The company ordered six custom-designed drilling rigs for the area, located primarily in West Virginia, Pennsylvania and New York, and said they plan to drill more than 60 horizontal wells in 2009.

"Given the progress we have made so far in 2009, we not only anticipate exiting 2009 at a net Marcellus production rate of 80 mmcfe to 100 mmcfe per day, but also now anticipate doubling that in 2010," said John Pinkerton, Range's chief executive.

Shares of the company rose $1.72, or 4.2 percent, to $42.85 in morning trading.