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 $4.9 billion, representing a 106% increase for the year. The valuation was based on prices of $10.08 per Mmbtu and $61.04 a barrel, compared to $6.18 per Mmbtu and $43.33 a barrel one year earlier. At year-end, 80% of the proved reserves by volume were natural gas and 66% was attributable to proved developed reserves. Proved undeveloped reserves decreased from 37% to 34% of total reserves volumes. At year-end, the Company's reserve life index stood at 15.4 years based on fourth quarter production levels. Approximately 84% of the Company's reserves were audited by independent petroleum consultants.
In total, the Company replaced 365% of production in 2005, including 249% from drilling. Total anticipated finding costs in 2005, including all exploration, development, acquisition, leasehold and seismic costs averaged $1.45 per mcfe. The Company's three-year average (2003-2005) finding cost equates to $1.27 per mcfe.
Commenting, John H. Pinkerton, Range's President, said, "We are extremely pleased to have increased our proved reserves by 20% at an all-in cost of $1.45 per mcfe. Importantly, our drilling effort alone replaced 249% of production. This performance is a direct reflection of our superb technical team. For 2006, we began the year with the largest, most diversified drilling inventory in our history. Our 2006 drilling program is off to a solid start as we have 26 rigs currently running. For the year we have budgeted the drilling of over 1,000 wells. We anticipate 2006 will result in another year of double digit production growth."
Ranges Resources is an independent oil and gas company operating in the Southwest, Appalachian and Gulf Coast regions of the United States.
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