Range Resources reports $75.6 million loss for quarter

Posted Thursday, Apr. 25, 2013  comments  Print Reprints

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Fort Worth-based Range Resources said Thursday that it lost $75.6 million in the first quarter despite a 27 percent jump in revenue.

A noncash charge of $97 million on unrealized derivatives was partly to blame, but the oil and gas producer also reported $38.4 million in lawsuit settlements.

According to a filing with the Securities and Exchange Commission, a class-action lawsuit in Oklahoma that seeks $160 million in alleged underpayments on royalties led Range to book $35 million in potential expenses.

Deductions for post-production expenses "by third parties who transport and process natural gas production" form the basis of the suit, the company said in the filing

"While we believe we have strong defenses to the claims made in this lawsuit," Range said in its filing, it concluded that it was appropriate to book the expense "given our evaluation of the law in Oklahoma, the outcomes in similar litigation and our assessment of the current status of the litigation."

Range said that while it believes that Oklahoma law "allows operators to deduct value-enhancing costs for treating, compression and other post-production expenses incurred to increase the value of a marketable product," the extent of the deductions could be something a judge or jury must determine. It said its subsidiary involved "has substantially complied with its royalty payment obligations under its leases and we therefore intend to vigorously defend this litigation."

Range also said it has appealed a Feb. 19 court ruling certifying a class in the case.

Regarding its earnings, Range said that after adjustments for unusual items, it earned $52.9 million, or 33 cents a share, better than the consensus estimate of 28 cents. The company's shares, which rose 3 percent before the earnings were released after the close of trading, were largely unchanged in after-hours trading.

Range said quarterly production rose 32 percent, with oil and condensate showing the biggest gain. Product prices after accounting for hedges slipped 3 percent to the equivalent of $5.06 per 1,000 cubic feet (mcf) of gas before transportation costs paid to third parties. Those transportation, gathering and compression expenses came to 79 cents per mcf.

The company will hold a conference call with analysts this morning.

Jim Fuquay, 817-390-7552

Twitter: @jimfuquay

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