Commenting on the announcement, Jeff Ventura, Range’s President and CEO, said, “The 47% year-over-year increase and the 10% increase over the second quarter in production reflects excellent team performance by all our employees and industry partners. As a result, we are well on track to achieve our 2012 production growth target of 35%. Our focus on reducing total unit costs continues to bear fruit and capital expenditures remain within our original budget. Given the positive operating results during the first three quarters of the year, coupled with our outstanding hedge position, we are well-positioned to have a strong finish for 2012. These outstanding results also provide substantial momentum as we look toward 2013.”
Range hedges portions of its expected future production volumes to increase the predictability of its cash flow and to help maintain a strong financial position. At September 30, 2012, Range had approximately 84% of its expected fourth quarter 2012 natural gas production hedged at a weighted average floor of $4.27 per mcf. Similarly, Range has hedged or committed for the fourth quarter 2012 approximately 80% of its projected crude oil production at a floor of $91.19 and approximately 60% of its composite NGL production at above current market prices. During the third quarter, Range realized approximately $80 million in hedging gains. As of September 30, 2012, Range had future hedging gains of approximately $145 million with roughly 40% expected to be recognized in the fourth quarter 2012, roughly 56% in 2013 and 4% in 2014.
Range has hedged additional volumes over the last few months. Currently, Range’s hedge position is:
|HEDGING POSITION AS OF OCTOBER 11, 2012|
|Daily Volume||Hedge Price||Premium (Paid) / Received|
|4Q 2012 Swaps||270,000||$||3.77||($0.01||)|
|4Q 2012 Collars||279,641||$||4.76 - $5.22||($0.19||)|
|2013 Collars||280,000||$||4.59 - $5.05||--|
|2014 Collars||355,000||$||3.77 - $4.47||--|
|4Q 2012 Calls||2,200||$||85.00||$||13.71|
|4Q 2012 Collars||4,500||$||75.56 - $82.78||$||8.57|
|2013 Collars||3,000||$||90.60 - $100.00||--|
|2014 Collars||2,000||$||85.55 - $100.00||--|
|C5 Natural Gasoline (bbls)|
|4Q 2012 Swaps||6,500||$||2.2923||--|
|C3 Propane (bbls)|
|4Q 2012 Swaps||6,000||$||1.2241||--|
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