Range Q3 Yield Grows yet Shares Fall - Analyst Blog

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Range Resources Corp. ( RRC ) surprised with a 3.2% and 0.9% drop in the trailing two trading sessions following the latest announcement of its third quarter 2013 production. Though the production volumes witnessed a 21% year over year increase, investor sentiment was bearish.

Range Resources' yield touched a record level of 960 million cubic feet equivalent (Mmcfe), which comprised 77% natural gas, 16% natural gas liquids (NGLs) and 7% crude oil and condensates. Oil and condensate production rose 43%, NGL production grew 28%, while natural gas production increased 19% from the prior-year quarter.

The third quarter production would have risen 24% year over year, while oil and condensates, NGL and natural gas would have increased 58%, 29% and 21%, respectively, after adjusting the sale of the New Mexico properties which closed at the beginning of the second quarter of 2013.

Third quarter production, which exceeded the company's guidance, was mainly boosted by the continued success of the company's drilling program in the Marcellus Shale.

Range Resources also announced its third quarter oil, natural gas and NGLs price realizations (including the impact of cash-settled hedges and derivative settlements) that averaged $4.80 per mcfe, down 2% from the prior-year quarter.

During the third quarter, production for natural gas, NGL and crude oil and condensates was 739 Mmcf per day, 25,678 barrels per day and 11,065 barrels per day, respectively. While preliminary realized prices for natural gas, NGL crude oil and condensates was $3.88 per mcf, $31.08 per barrel and $85.46 per barrel, respectively.

Range Resources incurred a net expense of about $3.7 million related to purchasing and blending third party dry gas into its rich residue gas from the southwest portion of the Marcellus, in the reported quarter. This expense will be reported separately under "Brokered natural gas and marketing revenues and expenses" for the quarter. The company's Mariner West project, scheduled for commissioning in November, will remove Range Resources' need for gas blending in the future.

Range Resources carries a Zacks Rank #2 (Buy). However, Zacks Ranked #1 (Strong Buy) stocks - Enerplus Corp. ( ERF ), Stone Energy Corp. ( SGY ) and Linn Energy LLC ( LINE ) - are good buying options for the short term.

ENERPLUS CORP (ERF): Free Stock Analysis Report

LINN ENERGY LLC (LINE): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

STONE ENERGY CP (SGY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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