Range Resources slashes drilling budget for 2015

Range Resources is falling in line with other energy producers by slashing its drilling budget by 46 percent in response to low commodity prices.

The Fort Worth-based energy company has set its capital spending budget for 2015 at $870 million, the company said in a statement Tuesday. Last year, its drilling expenditures were $1.3 billion, used to drill 255 wells.

About 95 percent of the money will be spent in the Marcellus Shale formation in the Northeast. The company said it had a 99 percent success rate in the wells it drilled last year and expects a 20 percent year-over-year production increase despite the reduced spending budget.

“While we begin 2015 with lower commodity prices, we are well positioned,” Jeff Ventura, the company’s president and CEO, said in a statement. “My confidence is driven by our high-quality asset base and our outstanding team here at Range.”

On Wall Street, Range shares (ticker: RRC) moved up $3.36, or more than 6 percent, to $54.60 in early trading today.

Last week, Range announced it was shutting down its Oklahoma City office and laying off at least 60 employees because of lower prices for oil and natural gas. In the announcement, Range said it was offering to move 30 employees to its Cowtown headquarters.

Other companies had already announced drilling cutbacks. This month, Irving-based Pioneer Natural Resources said it was cutting capital expenditures by 45 percent to $1.85 billion, with plans to operate only 16 drilling rigs in the Permian Basin and Eagle Ford Shale oil fields through the first part of the year.

Ventura said he is optimistic because the company has lowered its debt and has no bond maturities coming due until 2020.

Range closed out a profitable year. The company earned $284 million in the fourth quarter, or $1.68 a share, compared with $28.1 million, or 17 cents a share, a year ago. For 2014, the company reported a profit of $634.3 million, or $3.79 a share.

Revenue was $872.2 million in the fourth quarter, a 104 percent increase.

This story was originally published February 24, 2015 at 6:02 PM with the headline "Range Resources slashes drilling budget for 2015."