The pretax present value of the Company's proved reserves at year-end, based on constant prices and costs and discounted at 10% rose to $2.3 billion, representing a 64% increase for the year. The valuation was based on spot prices of $6.18 per Mmbtu and $43.33 a barrel, compared to $6.19 per Mmbtu and $32.52 a barrel one year earlier. At year-end, 80% of the proved reserves by volume were natural gas and 63% was attributable to proved developed reserves. Over 80% of the Company's proved undeveloped reserves are located in Appalachia. At year-end, the Company's reserve life index stood at 14.9 years based on fourth quarter production levels. Approximately 88% of the Company's reserves were audited by independent petroleum consultants.
In total, the Company replaced 826% of production in 2004, including 216% from drilling. Total anticipated finding costs in 2004, including all exploration, development, acquisition, leasehold and seismic cash costs averaged $1.21 per mcfe. The Company's three-year average (2002-2004) finding cost equates to $1.17 per mcfe.
Commenting, John H. Pinkerton, Range's President, said, "We are extremely pleased to have increased our proved reserves by 72% at an all-in cost of $1.21 per mcfe. Importantly, our drilling effort alone replaced more than 200% of production. This performance is a direct reflection of our superb technical team and our strategy of steady drill bit growth coupled with complementary acquisitions. For 2005, we began the year with the largest, most diversified drilling inventory in our history. Our 2005 drilling program is off to a solid start as we have 13 rigs running. For the year we anticipate drilling 787 gross wells."
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