Oct 30, 2013 3 min read

Range Resources Corp. on Tuesday reported third-quarter earnings of $19 million, or 12 cents per share on revenue of $442 million, a 47 percent increase over the comparable quarter in 2012.

The Fort Worth, Texas, oil and gas exploration and production company, which reported earnings after the close of Tuesday’s stock market, also reported record natural gas production of 960 million cubic feet per day, a 21 percent increase over the prior-year quarter.

According to a news release, the company said its results were driven by liquids-rich wells drilled in Pennsylvania.

The company said year-over-year oil and condensate production increased 43 percent, while natural gas liquids production was up 28 percent, with natural gas production rising 19 percent.

“Range continued to make significant progress during the third quarter, with record production results, lower unit costs and materially higher cash flow,” said Chief Executive Officer Jeff Ventura.

Ventura noted that the first delivery of ethane into the Mariner West pipeline to Sarnia, Canada, commenced in July with intermittent deliveries. The project is expected to be fully operational in November.

“Once fully operational, Mariner West will allow us to continue our planned growth without concern for pipeline quality requirements for our residue gas,” Ventura added.

Ventura also discussed the company’s future earnings potential coming from the Southwestern Pennsylvania portion of its million-acre leasehold in the state.

The company noted that more than half of the leasehold, about 540,000 acres,essentially doubles “when stacked pay reservoirs across most of our acreage in the (Appalachian) Basin are considered.

“This acreage position is anchored by the Marcellus, the most prolific gas reservoir in North America,” Ventura said.

The company released “estimated gas in place maps indicating that its southwest Pennsylvania acreage is strategically located at the nexus where the largest estimated gas in place exists when considering all three shale horizons – the Marcellus, Utica and Upper Devonian.

“Range believes that this area also encompasses the core of the super-rich and wet areas of both the Marcellus and Upper Devonian shales,” Ventura said.

Range said it currently has contracts in place for approximately 1 billion cubic feet per day of capacity, increasing to 1.5 Bcf per day by 2015 at an average cost of 23 cents per Mmbtu.

“Importantly, the majority of Range’s Marcellus activity is located in southwest Pennsylvania where six of the largest pipelines in Appalachia are located and pass through. This significant amount of existing infrastructure has allowed Range to secure firm transportation at rates of approximately 20 cents to 25 cents per Mmbtu.”

During the third quarter, Range’s Southern Marcellus Shale Division, headquartered in Southpointe, brought online 26 Marcellus wells, with 24 wells in the super-rich area, and two wells in the dry gas area.

At quarter’s end the division’s backlog of wells waiting on pipeline connection decreased to 11 wells. Range said it expects to turn to sales a total of 125 wells in the southern Marcellus during 2013. It said it continues to minimize the number of wells drilled but are waiting on pipeline connection, which allows for better use of capital spent.