Range Resources reports hefty first-quarter loss
Despite reporting a hefty first-quarter loss, Range Resources is predicting smoother sailing ahead after becoming the first North American company to export ethane and establishing a $3 billion credit line to help it weather the energy industry’s tough times.
During the first quarter, the Fort Worth-based company lost $91.7 million, compared to a $27.7 million profit in the first quarter of last year. Overall revenues dropped 28 percent, with the company reporting $331.4 million compared to $462.8 million a year ago.
Still, Range CEO Jeff Ventura said the company continues to achieve excellent operational results, having cut costs 10 percent year-over-year, a factor that helped convince its 29-member bank group to unanimously reaffirm its $3 billion borrowing base. The balance drawn on that credit was $31 million.
Another “monumental” event for the company was the start of Mariner East pipeline, making it the first domestic company to export ethane to Europe, he said. Ventura said that ability will be “increasingly valuable” during periods of local oversupply.
“Since the beginning of the year, we have seen improved pricing for condensate and NGLs, and sentiment seems to be more optimistic regarding potential improvements in natural gas fundamentals and pricing,” Ventura said in a statement.
Like other energy companies, Range has been scaling back its drilling operations and workforce. Earlier this year, the company trimmed jobs in Fort Worth and Pittsburgh, the hub for its Marcellus Shale operation. The company laid off 55 people, including 20 in Fort Worth.
Range also slashed its capital budget by 45 percent, saying it would spend $495 million. Despite those cuts, the company said production was up 17 percent in the Marcellus versus last year.
It closed the sale of its Bradford County nonoperating Marcellus assets in March, bringing in $110 million, the company reported. This month, Range also signed a sale agreement for $77 million on assets in central Oklahoma.
Max B. Baker: 817-390-7714, @MaxbakerBB
This story was originally published April 28, 2016 at 6:11 PM with the headline "Range Resources reports hefty first-quarter loss."