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.