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Range Resources (RRC) Posts Lower-than-Expected Q1 Loss

Range Resources Corp. 's RRC first-quarter 2016 adjusted loss came in at 22 cents a share, narrower than the Zacks Consensus Estimate of loss of 26 cents. The company reported earnings of 12 cents a share in the year-earlier quarter.

First-quarter total revenue of $331.4 million lagged the Zacks Consensus Estimate of $338 million and declined 28.4% year over year from $462.8 million. The year-over-year decrease is attributable to 38.6% decline in total price realizations.

Operational Performance

The company's first-quarter production averaged almost 1,382.2 million cubic feet equivalent per day (MMcfe/d). Natural gas made up for 67% of the total production, while natural gas liquids (NGLs) and oil accounted for the remaining 33%. Total production volume improved 4.1% from the year-earlier quarter on the back of the company's highly successful drilling program.

Oil production decreased 36.7%, whereas NGL rose 10.2% and natural-gas production increased 4.3%, all on a year-over-year basis.

The company's total price realization (including the effects of hedges and derivative settlements) averaged $1.67 per Mcfe, down 38.6% year over year. The overall price comprised NGL prices declined 24.7% to $8.40 per barrel, crude oil prices decreased 38.3% to $20.00 per barrel and natural gas prices plunged 40.8% to $1.68 per Mcf, all on a year-over-year basis.

Financials

At the end of the quarter, long-term debt was $2,589.0 million, which represents a debt-to-capitalization ratio of 49.2%.

Guidance

For the second quarter, the company estimates production of 1.410 billion cubic feet equivalent (Bcfe) per day, of which liquids are expected in the 32-35% range. The company anticipates direct operating expenses in the range of $0.22-$0.23 per Mcfe. Transportation, gathering and compression expenses are expected in the range of $1.03-$1.05 per Mcfe, while exploration expenses are projected to be in the $5-$7 million range.

For 2016, the company has increased its production guidance to the upper end of its earlier projection. Production is now expected in the range of 1,410-1,420 MMcfe/d after completion of all pending asset sales. Capital budget for the year is $495 million.

Ranks

Range Resources currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the oil and gas industry are ReneSola Ltd. SOL , FutureFuel Corp. FF and Braskem S.A. BAK . Al these stocks sport a Zacks Rank #1 (Strong Buy).

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BRASKEM SA (BAK): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

FUTUREFUEL CORP (FF): 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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