Independent oil and gas company,
Range Resources Corp.
) has priced a public offering of 4.56 million common shares. Per
company estimates, total estimated gross proceeds before deducting
underwriters' compensation and estimated expenses will come around
$400 million. The offering will close on Jun 17, 2014.
The company intends to use the net proceeds from the offering to
redeem all outstanding Senior Subordinated Notes due 2019, at a
coupon rate of 8.0%. The aggregate principal amount of the notes is
$300.0 million. The rest of the proceeds would be used for general
The redemption price of the notes would be equal to 104% of the
aggregate principal amount of the notes along with accrued but
unpaid interest prior to the redemption date. At the end of the
first quarter, long-term debt of the company was $3.2 billion,
representing a debt-to-capitalization ratio of 56.9%.
Range Resources' diversified asset portfolio is spread between
low-risk/long reserve-life Appalachian assets and
large-volume/rapid-payout Gulf Coast properties. The company has an
impressive inventory in the Marcellus Shale, one of the prominent
emerging shale plays in the U.S. lower 48 states.
The company's first-quarter production averaged nearly 1,056.2
million cubic feet equivalent per day (MMcfe/d), comprising 65%
natural gas, while natural gas liquids (NGLs) and oil were 35%.
Total production volume experienced a 20.6% improvement from the
year-earlier quarter, mainly on the back of sustained
accomplishment from the company's drilling program.
For the second quarter, the company expects production between
1,065 Mmcfe and 1,075 Mmcfe per day, of which liquids will be 30%
to 35%. The company expects production between 1,160 Mmcfe and
1,210 Mmcfe per day and 1,280 Mmcfe and 1,340 Mmcfe per day, for
the third and fourth quarters, respectively. Liquids would comprise
30% to 35% for both the quarters.
For 2014, the company has maintained its production growth guidance
of 20% to 25% and capital budget at $1.3 billion with stress on
liquids-rich and oil projects mainly in the Marcellus Shale and
horizontal Mississippian plays.
Range Resources currently retains a Zacks Rank #3 (Hold). However,
there are other stocks in the oil and gas industry like
Athlon Energy Inc.
Ultra Petroleum Corp.
), which appear more promising with a Zacks Rank #1 (Strong
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