Our speakers on today's call are Jeff Ventura, President and Chief Executive Officer; Ray Walker, Senior Vice President and Chief Operating Officer; and Roger Manny, Executive Vice President and Chief Financial Officer.Range has filed our 10-Q with the SEC yesterday. It's now available on the homepage of our website or you can access it using the EDGAR system. In addition, we posted on our website supplemental tables, which will guide you in the calculation of non-GAAP measures of cash flow, EBITDAX, cash margins and the reconciliation of our adjusted non-GAAP earnings to reported earnings that are discussed on the call today. We've also added tables which will guide you in modeling our future realized prices for natural gas, crude oil and natural gas liquids. Detailed information of our current hedge position by quarter is also included on the website. Now let me turn the call over to Jeff. Jeffrey L. Ventura Thank you, Rodney. I'll begin with an overview of the company. Ray will follow with an operations update and Roger will be next with a discussion of our financial position, then we'll open it up for Q&A. Range is on track to achieve the targets that we've set for 2012. We're on track to grow production 30% to 35% year-over-year, exit the Marcellus at our goal of 600 million cubic feet per day net and to grow liquids production 40% year-over-year. We're also making good progress in all 5 of our enhancement areas, which are the super-rich Marcellus, super-rich Upper Devonian, wet Utica, horizontal Mississippian oil play and Cline Shale oil play. Ray will give more details on all 5 projects in his talk. Financially, we're also in good shape and making good progress as well. During the quarter, Range continued to lower its cost structure. On the units of production basis, our company's 5 largest cost categories fell by 6% in aggregate compared to the prior-year period. Our natural gas hedge position is excellent for 2012. We're 75% hedged to the floor price of $4.45 per Mmbtu. We recently completed our bank redetermination and reaffirmed our borrowing base under the bank credit facility at $2 billion and increased our commitment amount to $1.75 billion. We have no debt maturities until 2016 under our bank facility and 2017 for our notes.
I want to highlight the great job that Roger and his team did on the recent $600 million bond offering, which resulted in the lowest interest rate ever by BB-rated company in any industry. We issued the notes at a fixed rate of 5% for 10.5 years.Most importantly, in today's environment of low natural gas pricing and high oil price, all of Range's key projects generate attractive rates of return. 75% of our 2012 capital is going into liquids-rich projects, almost all of which is wet or super-rich Marcellus or the horizontal Mississippian oil play. The rates of return on these projects range from about 70% to 100% at strip pricing. Almost all of the remaining drilling capital is going into the Northeast Marcellus, with a rate of return is in the mid-20% to low 30%. We'll be decreasing our rig count in the Northeast to roughly 1 rig by the end of this year and refocus more of our capital into the higher-return areas. Historically, it was important to be in the core part of a particular play. Given the disparity in oil and natural gas prices, it's now not only important to be in the core part, but you've got to be in the wet core. Also, not all the plays are created equal. Some plays don't have wet cores or wet areas at all. Other plays do, but are higher cost and lower return. Fortunately, Range has a huge acreage position in the wet part of the core at one of the best rate of return place in the U.S., which is the southwest part of the Marcellus. We also have a large position in what we believe is the core of the horizontal Mississippian oil play in Oklahoma and Southern Kansas. This is one of the highest rate of return plays in the U.S. Plus, we have tremendous upside in the super-rich and wet Upper Devonian, wet Utica and the Cline Shale oil play.
Including only our 5 enhancement areas, we have about 800,000 net acres in the liquids-rich portfolio -- in our liquids-rich portfolio that are prospective for wet gas, super-rich gas or oil.Differentiation between companies at this point in our industry is key. The key question is which companies can make good returns in today's price environment? At Range, we expect to drive up production and reserves per share on a debt-adjusted basis for years to come, with strong returns and low cost even in today's commodity price environment. We'll do so while staying focused on safety and being good stewards of the environment. At the IPAA Conference in New York last week, there was a lot of interest in Range from fund managers and analysts. Some of the feedback that I heard from the meetings was that in this environment, investors are seeking E&P stocks that offer both significant downside protection and significant upside per share, and Range is one of them. That's great feedback to hear in any environment, and we're proud to have earned that trust. I'll turn the call over to Ray to discuss operations. Ray N. Walker Thanks, Jeff. My comments today will cover several topics. I'll talk about cost, efficiencies, well performance, production guidance and give some operations updates from our divisions. Like Jeff said, we're off to an excellent start to meet our production growth targets in 2012. Our plan to shift more of our resources and capital investment to liquids-rich and oil projects is on schedule, and we can see this already beginning to pay off. As we stated in our earnings release, the first quarter production came in at 655-point (sic) [655.5] million cubic feet equivalent per day, which was comprised of 512.5 million gas, 17,152 barrels of NGLs and 6,682 barrels of oil and condensates.
I think it's also important to characterize the types of production specifically. While we do produce a lot of gas, I don't think most folks realize that 71% of our total production is coming from our liquids-rich and oil plays. All of that rich gas has significant Btu and liquids upgrades and, therefore, has significantly more value than the dry gas.Read the rest of this transcript for free on seekingalpha.com