Range Sets $429 Million Capital Budget for 2006
Range Resources Corporation (NYSE: RRC) reports that a $429 million capital budget has been set for 2006. The budget, which excludes acquisitions, represents a 32% increase over expected 2005 expenditures. Expenditures for 2005 are estimated to total $324 million, excluding acquisitions. The 2006 budget includes $358 million for drilling and recompletions, $38 million for land, $18 million for seismic and $15 million for the expansion and enhancement of gathering systems and facilities. Of the drilling and recompletion capital, 85% is attributable to lower risk development and exploitation activities and 15% is attributable to higher risk exploration projects. Acquisitions, particularly those in proximity to existing properties, will continue to be pursued but are considered too unpredictable to be specifically budgeted. Based on the current futures prices and existing hedges, 2006 capital spending is projected to be funded with approximately 75% of internal cash flow. Excess cash flow may be used to fund acquisitions, increase capital expenditures, reduce debt or repurchase stock.
In 2006, the Company expects to drill 1,096 gross (802 net) wells and to undertake 63 gross (44 net) recompletions. Approximately 46% of the budget is attributable to each of the Appalachian region and the Southwest region, which includes the Permian Basin, the Midcontinent and East Texas. The remaining 8% is attributable to the Gulf Coast region.
Commenting, John H. Pinkerton, Range's President, said, "2005 has
proved extremely rewarding for Range and its shareholders. While
year-end engineering is not yet complete, the 2005 drilling program is
clearly successful. The increase in the 2006 capital budget reflects
our large, multi-year drilling inventory including opportunities
generated from the success we have had so far this year. We have
invested in a larger organization over the past several years to
prudently manage the expanding capital programs being generated from
our Company's larger asset base and growing drilling inventory. We
expect the 2006 drilling program will generate exceptional rates of
return, further increasing our reserves and production. For 2006, we
are targeting another year of double digit production growth."
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