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Range Proved Reserves Increase 29% To 6.5 Tcfe

At year-end 2012, the Company recognized 307 Bcfe of incremental ethane reserves as NGL proved reserves in the Marcellus Shale associated with initial ethane deliveries under contracts commencing in 2013. The remaining Marcellus ethane reserves continue to be included as natural gas reserves until additional ethane contracts commence in 2014 and 2015. As a result, the majority of its ethane volumes are currently left in the natural gas stream and sold on an energy equivalent basis. If ethane recovery were occurring at year-end 2012 for all the ethane deliveries under currently executed contracts, the Company’s estimated proved reserves by volume would have been 7.0 Tcfe, composed of 66% natural gas, 30% NGLs and 4% crude oil. In all geographical areas other than the Marcellus, ethane is normally included in the NGL reserves under customary reporting practices.

As noted above, Range replaced 773% of production from drilling in 2012 including performance revisions. The Company's estimate of drilling and development costs incurred during 2012 including acreage, exploration and seismic expenses is approximately $1.65 billion which is subject to year-end audit. Included in the $1.65 billion capital spending amount is approximately $190 million for acreage. Finding and development cost from all sources averaged $0.87 per mcfe including price and performance revisions. Drill bit development cost (which excludes price revisions and acreage cost) averaged $0.68 per mcfe.

The Securities and Exchange Commission ("SEC") rules require that proved reserve calculations be based on the prompt month average prices over the preceding twelve months. For the year-end 2012 reserve evaluation, the benchmark prices were $2.76 per Mmbtu for natural gas and $95.05 per barrel for crude oil (Cushing), representing the simple average of the prices for the first day for each month of 2012. Comparative prices for year-end 2011 were $4.12 per Mmbtu for natural gas and $95.61 per barrel for crude oil (Cushing). Based on these prices adjusted for energy content, quality and basis differentials ($2.75 per Mmbtu, $32.23 per barrel of natural gas liquids and $86.91 per barrel of crude oil, respectively), the pre-tax discounted (10%) present value (“PV10”) of the Company's proved reserves was $4.0 billion for year-end 2012 compared to $6.1 billion at year-end 2011. The Company’s PV10 value of its proved reserves includes estimated future development costs to develop the proved undeveloped reserves of $3.5 billion. Using the 10-year future strip benchmark prices as of December 31, 2012, the Company’s PV10 value would have been $8.2 billion. The 10-year future strip benchmark prices were $4.84 per Mmbtu and $87.90 per barrel. The comparative prior year PV10 value using 10-year future strip benchmark prices as of December 31, 2011 of $4.90 per Mmbtu and $92.66 per barrel, was $7.4 billion.

(in Bcfe)
Balance at December 31, 2011   5,054
Extensions, discoveries and additions 1,767
Purchases -
Performance revisions 366
Price revisions (257 )
Sales (149 )
Production (276 )
Balance at December 31, 2012 6,505  

Commenting, Jeff Ventura, Range's President and CEO, said, "Our 29% increase in proved reserves, 773% drill bit replacement and $0.87 all-in finding cost are outstanding results. Importantly, we achieved double-digit per share, debt-adjusted production and reserve growth for the seventh consecutive year. These results are a reflection of our large inventory of low cost, high return projects. Given the commodity price environment in 2012, and to a greater extent in 2013, we are focusing our capital on our liquids-rich plays. The 64% increase in crude oil and NGL reserves versus the 20% rise in natural gas reserves is a reflection of the solid execution of our capital program. Again for 2013, we expect our growth in liquid reserves will materially outpace the growth in our natural gas reserves. The fact that only 10% of our Marcellus acreage is classified as proved reserves along with our growing oil production from the Horizontal Mississippian play, demonstrates that Range is very well positioned to continue to achieve double-digit production and reserve growth per share at low cost for many years to come."

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