With the benefit of wells that went on production during the fourth quarter, those expected to go online shortly and the Pine Mountain acquisition that was completed in late December, production is projected to continue to increase sharply in 2005. The Company currently expects first quarter 2005 production to reach 224 to 226 Mmcfe per day, a 27% increase over first quarter 2004 and a 5% increase over the most recent quarter.
The Company also announced that its fourth quarter 2004 oil and gas price realizations (including the impact of hedging) averaged over $4.85 per mcfe. This represents a 20% increase over the prior-year period and a 9% increase over third quarter 2004. Based on current futures prices and the rolling off of lower price hedges, realized prices are anticipated to increase further in 2005. First quarter 2005 price realizations (including the impact of hedging) are currently expected to average $5.00 to $5.10 per mcfe, approximately 25% higher than the prior-year period.
Commenting on the announcement, John H. Pinkerton, Range's President, said, "Production increased as a result of our successful drilling program and our complementary acquisitions. The recent Pine Mountain acquisition provides a steady stream of low-cost production that will continue for many years. Importantly, production is expected to increase throughout 2005 due to the ongoing exploitation of our large, multi-year drilling inventory. Finally, with increasing production coupled with higher realized prices, we should report record results in 2005 for many of the key aspects of our business."
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