HOUSTON (Dow Jones Newswires), July 26, 2011
Range Resources Chief Executive John Pinkerton said Tuesday that the natural gas explorer's balance sheet, fattened by the recent sale of its Barnett Shale assets, is in the best shape it has ever been in.
Range in May sold some 52,000 acres in the Barnett Shale formation near its headquarters in Fort Worth, Texas, to a private buyer for $900 million. Proceeds went toward paying off debt and accelerating drilling in Pennsylvania's prolific Marcellus Shale formation, which accounts for most of Range's production and spending.
"The Barnett sale was hugely important for our company," Pinkerton told investors during a conference call to discuss Range's second-quarter results. "The proceeds generated by the sale are the catalyst for Range becoming internally funded by the end of 2013," so long as natural gas prices don't collapse.
Range ended the second quarter with $290 million cash on hand, no bank debt and no bond maturities until 2017, Pinkerton said.
Range Resources posted second-quarter net profit of $51.3 million, or 32 cents a share, up from $9.1 million, or 6 cents a share, a year earlier. Excluding items, earnings were 27 cents, up from 9 cents. Revenue jumped 60% to $306.6 million on higher oil and gas sales.
Analysts polled by Thomson Reuters expected a profit of 19 cents on revenue of $262 million.
Shares recently traded 2.1% higher at $65.14.
The Barnett Shale accounted for about 20% of Range's output, but accelerated drilling, primarily in the Marcellus, replaced half of the lost Texas production in the second quarter, Pinkerton said. The remaining half should be replaced this quarter, he said.
Range anticipates third-quarter production rising about 3% year-over-year to the equivalent of 515 million to 520 million cubic feet per day, Pinkerton said. Fourth-quarter growth is expected to rise about 13% to between 606/MMcfe and 611/MMcfe per day.
In 2012, Range expects production to grow 25% to 30%, Pinkerton said.
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