Struggling with lower prices for oil and natural gas, Range Resources lost $301 million in the third quarter despite aggressively cutting its operational costs and the number of drilling rigs in the field.
The Fort Worth-based energy company reported late Wednesday that it lost $1.81 per diluted share compared to a $146 million profit, or 86 cents a diluted share, during the third quarter of last year. Revenue for the period was $479 million, a 22 percent decline.
The third-quarter results included a $502 million writedown on the value of oil and gas properties in northern Oklahoma and northwest Pennsylvania. Other companies, including Chesapeake Energy, also have been writing down asset values.
Any sales proceeds will be used to reduce debt and strengthen our balance sheet.
President and CEO Jeff Ventura
Excluding charges, Range said its adjusted net income for the period was $5.5 million, or 3 cents per diluted shares, compared to $62 million, or 37 cents, in the prior-year quarter.
Range (ticker: RRC) released its earnings after the close of trading Wednesday. It closed up 6 cents, or 21 percent, at $28.83.
Like other energy companies, Range said it plans to complete the sale of some “non-core assets” by the end of the year to help raise cash and improve its bottom line.
5 The number of drilling rigs Range will end the year with. It started out with 15.
“Any sales proceeds will be used to reduce debt and strengthen our balance sheet,” President and CEO Jeff Ventura said in a statement. “Importantly, we are continuing to drive down costs and implement innovative marketing solutions that are expected to deliver improved margins.”
Range started the year running 15 rigs and now says it plans to end 2015 with 5, the company reported. At the beginning of 2015, it also had slashed its drilling budget to $870 million, down from $1.5 billion in 2014.
On the positive side, Range said it has lowered well costs per lateral foot by about 60 percent in the Marcellus Shale over the past four years. It also expects to deliver on a 20 percent production growth target, Ventura said.
He also saw signs of improved pricing ahead, especially in the Appalachia oil and gas region. The company said as the Mariner East 1 pipeline project becomes fully operational, it can send products from southwest Pennsylvania to the Marcus Hook export facility near Philadelphia. Their commodities could then be sold on the international or local market, whichever provides the best price.