The share price of
Range Resources Corporation
) fell 0.5% following the news of the company's agreement with
). The deal entails exchange of both the companies' producing
properties and other assets.
BOARDWALK PIPLN (BWP): Free Stock Analysis
EQT CORP (EQT): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis
UNIT CORP (UNT): Free Stock Analysis Report
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Per the agreement, Range Resources will transfer ownership of
about 73,000 net acres and related assets in Glasscock and
Sterling Counties, TX to EQT. The assets consist of all of Range
Resources' Conger properties, which are currently yielding about
28 million cubic feet equivalent per day (Mmcfe/d), with 62%
being liquids mainly from the Cisco/Canyon. These Permian Basin
properties are believed to hold several horizontal and vertical
stacked pay drilling prospects in the Wolfcamp, Cline and
On the other hand, EQT will transfer its operated ownership
interests spread across 138,000 net acres and its 50% interests
in 1,200 miles of gathering pipelines and compression in the Nora
Field of Virginia to Range Resources. This will give Range
Resources complete ownership of these assets, along with cash
proceeds of $145 million.
Currently, the Nora properties are yielding about 41 Mmcf/d.
These properties have several vertical and horizontal stacked pay
drilling prospects in the coalbed methane, conventional tight gas
intervals and Devonian shale horizons. The transaction has kept
Range Resources' 2014 capital expenditure budget unchanged at
The deal, which will expectedly be complete in the second quarter
of 2014, is subject to customary closing conditions, final due
diligence and post closing adjustments.
Once the transaction is complete, Range Resources' net Virginia
production will increase to 111 Mmcf/d from 70 Mmcf/d, thanks to
the new combined 385,000 gross and net acres owned by the company
in the region.
Range Resources believes that the exchanged property has a net
unproved resource potential of 2 trillion cubic feet equivalent
(Tcfe). This has boosted the company's net unproved resource
potential in properties held in Virginia to 5 Tcfe.
At present, Range Resources carries a Zacks Rank #4 (Sell).
However, better-ranked stocks in the same sector include
Boardwalk Pipeline Partners, LP
), both of which have a Zacks Rank #1 (Strong Buy).