Monday November 6, 2000
FORT WORTH, Texas--(BUSINESS WIRE)--Nov.
6, 2000--RANGE RESOURCES CORPORATION (NYSE:RRC - news) today announced its results
for the third quarter.
The Company reported net income of $7.8 million or $.19 per share on revenues
of $44.8 million. Cash flow increased 38% to reach $20.5 million or $.45 a
share. The results were significantly impacted by nonrecurring items. Revenues,
net income and cash flow were each reduced by $17.7 million due to hedging. A
$4.3 million gain on security exchanges was also recorded. Excluding the impact
of hedging and security exchanges, net income in the third quarter would have
exceeded $19 million versus $676,000 excluding nonrecurring items and hedging in
the prior-year period. In 1999, a $39.8 million gain on the Great Lakes'
transaction and a $21 million property impairment were recorded.
Production during the quarter reached 152 Mmcfe a day. Gas production
averaged 114 Mmcf per day and oil and liquids averaged 6,300 barrels per day.
This represented a 15% decline from the prior-year period primarily due to
dispositions. A less than 2% decrease would have been reported if the impact of
dispositions was eliminated. Production in the period rose slightly from second
quarter levels and is expected to increase further in the coming quarter.
Starting in the fourth quarter, production should begin to exceed prior-year
levels.
Hedging significantly reduced income in the quarter. The realized price per
Mcfe after hedging rose 27% to $2.91. The realized gas price rose 18% to $2.57
per Mcf as the oil price jumped 52% to $24.62 per barrel. Realized prices would
have been $1.42 per Mcf and $5.78 per barrel higher in the absence of hedging.
In the fourth quarter, approximately 70% of anticipated production is hedged at
an average price of $3.97 per Mcfe. Based on current futures prices, the Company
estimates that its realized price in the fourth quarter will rise by over $1.00
per Mcfe, adding more than $14 million to net income and cash flow.
Results in the third quarter benefited from a $4.8 million decline in
expenses relative to the prior year. This excludes the impact of a property
impairment recognized in the 1999 period. Direct operating expenses were reduced
14%, interest expense fell 21% and depletion, depreciation and amortization
dropped 7%. These reductions were partially offset by increases in exploration
costs and administrative expenses. The Company expects no material changes in
its cash costs in the fourth quarter except for reductions in interest expense
due to the continuing reduction in debt and fixed income securities.
The Company's results were also enhanced by the performance of Independent
Producer Finance. IPF's revenues in the period increased 48% to $3.1 million as
earnings almost tripled to $2 million. The improved results were primarily due
to the impact of higher commodity prices on IPF's portfolio, a 23% reduction in
expenses, and reflect the reversal of $1 million of previously provided bad debt
reserves.
Capital expenditures during the quarter increased to $13.3 million, requiring
only two-thirds of the Company's internal cash flow. These expenditures funded
the drilling of 78 wells and 13 recompletions, all but two of which proved
successful. In the first nine months of 2000, a total of $33.6 million in
capital was spent to drill 130 wells and recomplete 47 others. These
expenditures resulted in more than 40 Bcfe of reserves being placed on
production at an average development cost of $.70 per Mcfe. Based on current
futures prices, the Company estimates that its capital program is achieving an
internal rate of return of better than 50%. Capital expenditures in the fourth
quarter are expected to approximate $19 million, bringing the total for the year
to $53 million. This would represent a 38% increase from the 1999 capital
program.
While capital expenditures increased, debt continued to be reduced. Debt and
fixed income securities fell by $33 million during the quarter as bank debt
dropped $16 million, and $17 million of fixed income securities were retired in
exchange for 2.8 million common shares. A $4.3 million gain was recognized on
the exchanges as the fixed income securities were reacquired at a discount. In
the first nine months of the year, the Company reduced debt and fixed income
securities by $104 million, as stockholders' equity rose $35 million. At
September 30th, the Company had 45.9 million shares of common stock outstanding.
Announcing the results, John H. Pinkerton, the Company's President, said,
``Much has been accomplished since the beginning of the year. Production, cash
flow and net income have all steadily increased. More than $100 million of debt
and fixed income securities have been eliminated. Our capital expenditure budget
is once again growing and our drilling is yielding increasingly attractive
returns. In the fourth quarter, we expect to see a far clearer picture of what
has been achieved. With production increasing, a lower cost structure, and a
sharp jump in realized prices, we expect earnings and cash flow to reach record
levels.''
Thomas J. Edelman, the Company's Chairman, said, ``After an extremely
difficult two years, the unstinting efforts of our employees are beginning to
show significant results. Our cost structure and debt levels have been reduced
substantially and improvements have been made in every aspect of the business.
With rising production and a majority of our production through year-end 2001
hedged at prices above $4.00 per Mcfe, we should be assured excellent results
for the foreseeable future. We plan to utilize what is expected to be the
highest net income and cash flow in our history to further reduce debt while
increasing our development budget. The critical focus for 2001 will be to grow
our reserve base. If we can succeed in overcoming that challenge, the Company
will have finally returned to its historical posture of growth and
profitability.''
The Company will host a conference call on Monday, November 6, 2000 at 2:00
p.m. Eastern Time to discuss the results. A live web cast of the call may be
accessed over the Internet at http://www.rangeresources.com/ or http://www.vcall.com/. To listen please go to
either website at least 15 minutes prior to the call to register and install any
necessary software. The web cast will be archived for replay on the Company's
website through the end of the fourth quarter. A telephone replay of the
conference call will also be available from 6:00 p.m. Eastern Time on November 6
until 12:00 midnight. Eastern Time on November 23. To listen to the replay, call
719/457-0820 and reference the following confirmation code: 727719.
RANGE RESOURCES CORPORATION is an independent oil and gas company operating
in the Permian, Midcontinent, Appalachian and Gulf Coast regions of the United
States.
This release contains certain forward-looking statements that are based on
assumptions the Company believes are reasonable, but which are subject to a wide
range of uncertainties and business risks. Factors that could cause actual
results to differ from those anticipated include commodity prices, levels of
capital expenditures, hydrocarbon production rates, results of exploration and
development drilling, completion of production and gathering facilities in a
timely manner, the market for oil and gas properties and the Company's ability
to complete asset sales on acceptable terms. Additional factors are discussed in
the Company's periodic filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the year ended December 31, 1999.
RANGE RESOURCES CORPORATION
STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited) Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues
Oil and gas sales $ 40,581 $ 37,530 $117,426 $108,611
IPF income 3,077 2,078 8,137 5,559
Transportation and processing 813 2,100 4,326 5,798
Interest and other 348 (423) (895) 1,466
Gain on sale, net -- 39,810 -- 39,810
-------- -------- -------- --------
44,819 81,095 128,994 161,244
-------- -------- -------- --------
Expenses
Direct operating 9,452 11,041 27,718 33,126
IPF 1,083 1,412 3,590 4,391
Exploration 858 368 2,278 1,730
General and administrative 2,665 2,244 7,314 5,904
Interest 9,634 12,126 30,238 36,579
Depletion, depreciation and
amortization 17,424 18,770 52,746 57,708
Provision for impairment -- 20,988 -- 20,988
-------- -------- -------- --------
41,116 66,949 123,884 160,426
-------- -------- -------- --------
Income before taxes 3,703 14,146 5,110 818
Income taxes
Current 208 1,424 (886) 1,594
Deferred -- -- -- --
-------- -------- -------- --------
208 1,424 (886) 1,594
-------- -------- -------- --------
Income (loss) before
extraordinary items 3,495 12,722 5,996 (776)
Gain on conversion of
securities, net 4,261 -- 14,776 2,430
-------- -------- -------- --------
Net income $ 7,756 $ 12,722 $ 20,772 $ 1,654
======== ======== ======== ========
Earnings per common share $ 0.19 $ 0.33 $ 0.55 $ 0.00
======== ======== ======== ========
Weighted average shares
outstanding
Basic 44,336 37,477 41,459 36,745
Dilutive 44,534 37,477 41,587 36,745
BALANCE SHEETS
(In thousands) September 30, December 31,
2000 1999
-------------- --------------
(Unaudited)
Assets
Current assets $ 50,536 $ 75,873
IPF receivables, net 39,158 52,913
Oil and gas properties, net 570,180 592,363
Transportation and field assets, net 21,707 23,205
Other 5,919 8,014
-------------- --------------
$687,500 $752,368
============== ==============
Liabilities and Stockholders' Equity
Current liabilities $ 42,217 $ 53,648
Senior debt 99,900 135,000
Non-recourse debt 120,012 142,520
Subordinated notes 165,660 176,360
Trust convertible securities 97,340 117,669
Stockholders' equity 162,371 127,171
-------------- --------------
$687,500 $752,368
============== ==============
RANGE RESOURCES CORPORATION
OPERATING HIGHLIGHTS
(Unaudited) Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- --------------------
2000 1999 2000 1999
-------- -------- -------- --------
Average Daily Production
Oil (Bbl) 5,278 5,996 -12% 5,546 6,366 -13%
Natural gas liquids
(Bbl) 983 971 +1% 1,021 1,104 -8%
Gas (Mcf) 113,946 136,013 -16% 111,505 148,311 -25%
Equivalents (Mcfe) (a) 151,511 177,816 -15% 150,906 193,133 -22%
Average Prices Realized
Oil (Bbl) $ 24.62 $ 16.21 +52% $ 22.07 $ 13.97 +58%
Natural gas liquids
(Bbl) $ 18.41 $ 14.26 +29% $ 17.55 $ 9.37 +87%
Gas (Mcf) $ 2.57 $ 2.18 +18% $ 2.59 $ 2.01 +29%
Equivalents (Mcfe) (a) $ 2.91 $ 2.29 +27% $ 2.84 $ 2.06 +38%
Average Operating Costs
per Mcfe (b) $ 0.68 $ 0.67 +1% $ 0.67 $ 0.63 +6%
(a) Oil and natural gas liquids are converted to gas equivalents on a
basis of six Mcf per barrel.
(b) Includes lease operating expenses and production taxes.
IPF HIGHLIGHTS
(Unaudited) Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues $ 3,077 $ 2,078 +48% $ 8,137 $ 5,559 +46%
-------- -------- -------- --------
General & administrative
expense 307 390 918 1,176
Interest expense 776 1,022 2,672 3,215
-------- -------- -------- --------
Total expense 1,083 1,412 -23% 3,590 4,391 -18%
-------- -------- -------- --------
Net income (loss) $ 1,994 $ 666 +199% $ 4,547 $ 1,168 +289%
======== ======== ======== ========
Repayments of capital $ 8,606 $ 3,650 $18,543 $ 9,124
======== ======== ======== ========
September 30, December 31,
2000 1999
------------- -------------
(Unaudited)
Gross receivables $ 67,379 $ 82,664
Reserve (15,439) (17,251)
------------- -------------
Net receivables $ 51,940 $ 65,413
============= =============
Amount shown as current asset $ 12,782 $ 12,500
============= =============
Amount shown as long-term asset $ 39,158 $ 52,913
============= =============
Contact:
Range Resources Corporation, Fort Worth
Analysts:Rodney Waller, 817/870-2601
or
Investor Relations:Karen Giles, 817/870-2601
http://www.rangeresources.com/