Range Resources reported that a $1.065 billion capital budget has been set for 2008. This represents an 18% increase over 2007 expenditures. The 2008 budget includes $783 million for drilling and recompletions, $109 million for land, $51 million for seismic and $122 million for the expansion and enhancement of gathering systems and facilities. Of the drilling and recompletion capital, 95% is attributable to lower risk development and exploitation activities, and 5% is attributable to 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, 2008 capital spending is expected to be funded by operating cash flow and asset sales.
In 2008, Range expects to drill 968 gross (715 net) wells and undertake 82 (66 net) recompletions. Approximately 56% of the capital budget is attributable to the Southwestern region, 40% to the Appalachian region and 4% to the Gulf Coast region. Included in the budget are 187 net CBM, tight gas and shale wells at the Nora/Haysi field in Virginia, 92 net Barnett Shale wells in the Fort Worth Basin and 60 net Marcellus Shale wells in Appalachia. The remaining 376 net wells are primarily tight gas and oil wells in the Company's other core areas.
Commenting, John H. Pinkerton, Range's President, said, "The 2008 capital budget reflects our large, multi-year drilling inventory, which consists of more than 11,000 drilling projects. The strategy for our 2008 capital expenditures is consistent with prior years, in that our goal is to consistently grow production and reserves at top quartile finding costs. Based on the drilling projects planned for 2008, we anticipate generating excellent returns on invested capital and another year of double-digit production growth. Including the impact of planned asset sales, we have established a production growth target of 15% for 2008. Given rising production combined with our low cost structure and attractive hedge position, we foresee posting another year of record financial results in 2008."
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