Range Resources cuts back on drilling and payroll

Fort Worth-based Range Resources joined other energy companies in scaling back its drilling operations and workforce as it adjusts to low commodity prices.

Range Chief Executive Officer Jeff Ventura on Friday said the company recently trimmed jobs in Fort Worth and Pittsburgh, the hub for its Marcellus Shale operation. He made his comments during a conference call after the company reported a fourth-quarter loss of $321.8 million, impacted by a big charge on the sale of assets.

Across the company, 55 people were laid off, 20 of them in Fort Worth.

Range set its 2016 capital budget at $495 million, a 45 percent reduction from last year. On the conference call, Ventura said the company will reduce its drilling activity this year to three rigs in southwest Pennsylvania, compared to 15 rigs at the start of 2015. Essentially, all of the capital is being directed towards the Marcellus.

He said Range has signed an agreement to sell assets in Bradford County, Pannsylvania, for $112 million, including about 11,000 net acres. In addition, Ventura said the company is currently marketing its Central Oklahoma assets.

“Given the sale of our Virginia assets last year coupled with the closing of our Oklahoma City office, staff reductions in our field offices last year and a recent workforce reduction in our Pittsburgh area offices and Fort Worth office, our head count today is 31 percent lower than it was this time last year,” he said.

The market acted favorable to the company’s moves. Range shares (ticker: RRC) closed at $23.89, up 54 cents, or 2.31 percent.

Range is the latest large energy company to announce cutbacks in the wake of oil prices plunging by 70 percent since mid-2014 and natural gas prices sinking to the lowest since 1999. Devon Energy slashed its drilling budget by 75 percent and laid off about 1,000 employees. Irving-based Pioneer Natural Resources, which continued to search for oil long after others shut down, is cutting its drilling program in half.

The recent layoffs at Range accounted for about seven percent of its workforce, the company said, bringing job cuts to 314 positions in the last year. In February, it closed its Oklahoma City office, losing 60 jobs. In May, another 41 jobs in northwestern Pennsylvania were dropped. Range cut 158 jobs when it sold its Virginia assets, but only 55 people lost their jobs as the new owner hired 103 of Range’s old employees.

Range Chief Operating Officer Ray Walker praised the employees who were let go and said the company is providing them with a severance package.

“This is not a decision that we take lightly,” Walker said. “We are taking these and other steps to position Range to weather the current commodity price environment until demand is projected to come more closely in line with supply and commodity prices return to more economically rational levels.”

This story was originally published February 26, 2016 at 5:26 PM with the headline "Range Resources cuts back on drilling and payroll."