RANGE RESOURCES CORP

Previous wording

We are an independent natural gas, natural gas liquids (NGLs), crude oil and condensate company primarily engaged in the exploration, development and acquisition of natural gas properties in the Appalachian region of the United States. We operate in one segment and have a single company-wide management team that administers all properties as a whole rather than by discrete operating segments. We measure financial performance as a single enterprise and not on a geographical or an area-by-area basis.

Current wording

We are an independent natural gas, natural gas liquids and oil company engaged in the exploration, development and acquisition of natural gas and liquids properties in the Appalachian region of the United States. We operate in one segment and have a single company-wide management team that administers all properties as a whole rather than by discrete operating segments. We measure financial performance as a single enterprise and not on a geographical or an area-by-area basis.

Previous wording

Our overarching business objective is to build stockholder value through returns-focused development of natural gas properties. Our strategy to achieve our business objective is to generate consistent cash flows from reserves and production through internally generated drilling projects occasionally coupled with complementary acquisitions and divestitures of non-core or, at times, core assets. Currently, our investment portfolio is focused on high-quality natural gas assets in the state of Pennsylvania. Our revenues, profitability and future growth depend substantially on prevailing prices for natural gas, NGLs, crude oil and condensate and on our ability to economically find, develop, acquire and produce these reserves.

Current wording

Our overarching business objective is to build stockholder value through returns-focused development of properties. Our strategy to achieve our business objective is to generate consistent cash flows from reserves and production through internally generated drilling projects occasionally coupled with complementary acquisitions and divestitures. Currently, our investment portfolio is focused on high-quality natural gas assets in the Commonwealth of Pennsylvania. Our revenues, profitability and future growth depend substantially on prevailing prices for natural gas, NGLs and oil and on our ability to economically find, develop, acquire and produce these reserves.

Previous wording

Prices for natural gas, NGLs, crude oil and condensate fluctuate widely and affect:

Current wording

Prices for natural gas, NGLs and oil fluctuate widely and affect:

Previous wording

our ability to borrow and raise additional capital.

Current wording

our ability to borrow and raise additional capital, if needed.

Previous wording

We believe we are positioned for sustainable long-term success. We continue to monitor the impact of the actions of OPEC and other large producing nations, the Russia-Ukraine conflict, hostilities in the Middle East, global inventories of oil and gas, future monetary fiscal policy and governmental policies aimed at transitioning towards lower carbon energy, and we expect prices for some or all of the commodities we produce to remain volatile given the complex dynamics of supply and demand that exist in the global market. In first quarter 2024, natural gas prices declined primarily due to mild winter weather. Longer term natural gas futures prices have remained stronger based on market expectations that associated gas-related activity in oil basins and dry gas basin activity will show modest rates of growth compared with the past due to infrastructure constraints, moderated reinvestment rates and core inventory exhaustion. In addition, the global energy crisis experienced in recent years further highlighted the low cost and low emissions shale gas resource base in North America, supporting continued strong structural demand growth for United States liquefied natural gas exports, domestic industrial gas demand and power generation to support anticipated data center demand growth. Other factors such as geopolitical disruptions, supply chain disruptions, cost inflation, concerns over a potential economic recession and the pace and changes in global monetary policy may impact the demand for natural gas, NGLs and oil. We continue to assess and monitor the impact and consequences of these factors on our operations.

Current wording

We believe we are positioned for sustainable long-term success. We continue to monitor the impact of the actions of OPEC and other large hydrocarbon producing nations, the Russia-Ukraine conflict, hostilities in the Middle East, global inventories of oil and gas, future monetary and fiscal policy and governmental policies aimed at transitioning towards lower carbon energy, and we expect prices for some or all of the commodities we produce to remain volatile given the complex dynamics of supply and demand that exist in the global energy markets. In first quarter 2024, natural gas prices declined primarily due to mild winter weather, but prices partially recovered in late second quarter 2024 based on signs of lower industry well completion activity and supply declines. Longer term natural gas futures prices remain stronger based on market expectations that associated gas-related activity in oil basins and dry gas basin activity will show modest rates of growth compared with the past due to infrastructure constraints, moderated reinvestment rates and core inventory exhaustion. In addition, the global energy crisis experienced in recent years further highlighted the low cost and low emissions shale gas resource base in North America, supporting continued strong structural demand growth for United States liquefied natural gas exports, domestic industrial gas demand and power generation to support anticipated data center demand growth. Other factors such as geopolitical disruptions, supply chain disruptions, cost inflation, concerns over a potential economic recession and the pace and changes in global monetary policy may impact the demand for natural gas, NGLs and oil. We continue to assess and monitor the impact and consequences of these factors on our operations.

Previous wording

Commodity prices have remained volatile. Benchmarks for natural gas and NGLs decreased in the first three months of 2024 compared to the same period of 2023. As a result, we experienced decreases in our price realizations. Despite overall lower prices, we continue to focus on creating long-term value for our stockholders along with positioning ourselves to be a responsible and reliable supplier of natural gas and NGLs.

Current wording

Commodity prices have remained volatile. Benchmarks for natural gas decreased in second quarter 2024 and first six months 2024 compared to the same periods of 2023. Benchmarks for NGLs increased in second quarter 2024 compared to the same period of 2023 and remained flat for the first six months 2024 compared to 2023. As a result, we experienced increases in our price realizations for the quarter ended June 30, 2024. Despite overall year to date lower prices, we continue to focus on creating long-term value for our stockholders along with positioning ourselves to be a responsible and reliable supplier of natural gas and NGLs.

Previous wording

The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three months ended March 31, 2024 and 2023:

Current wording

The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three and six months ended June 30, 2024 and 2023:

Previous wording

During first quarter 2024, we recognized net income of $92.1 million, or $0.38 per diluted common share compared to net income of $481.4 million, or $1.95 per diluted common share during first quarter 2023. The lower net income in first quarter 2024 compared to first quarter 2023 is primarily due to lower realized prices.

Current wording

During second quarter 2024, we recognized net income of $28.7 million, or $0.12 per diluted common share compared to net income of $30.2 million, or $0.12 per diluted common share during second quarter 2023. The lower net income in second quarter 2024 compared to second quarter 2023 is primarily due to lower derivative fair value income (non-cash fair value adjustment related to our derivatives), slightly offset by higher realized prices.

Previous wording

Our first quarter 2024 financial and operating performance included the following results:

Current wording

Our second quarter 2024 financial and operating performance included the following results:

Previous wording

revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) decreased 11% from the same period of 2023;

Current wording

revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 11% from the same period of 2023;

Previous wording

transportation, gathering, processing and compression per mcfe was $1.49 in first quarter 2024 compared to $1.48 in the same period of 2023 primarily due to an increase in processed NGL volumes slightly offset by lower fuel costs;

Current wording

transportation, gathering, processing and compression per mcfe was $1.44 in second quarter 2024 compared to $1.42 in the same period of 2023, primarily due to an increase in fixed gathering and transportation costs;

Previous wording

general and administrative expense increased 2% from same period of 2023; and

Current wording

general and administrative expense increased 2% from the same period of 2023 primarily due to aggregate impacts of cost inflation; and

Previous wording

First quarter 2024 also included the following highlights to enhance our balance sheet, return capital to investors and preserve liquidity:

Current wording

Second quarter 2024 also included the following highlights to enhance our balance sheet, return capital to investors and preserve liquidity:

Previous wording

paid $19.4 million of dividends, or $0.08 per share;

Current wording

paid $19.5 million of dividends, or $0.08 per share;

Previous wording

repurchased in the open market $19.4 million face value of our 4.875% senior notes due 2025 at a discount; and

Current wording

repurchased in the open market $47.1 million face value of our 4.875% senior notes due 2025 at a discount; and

Previous wording

enhanced liquidity with the accumulation of cash on hand of $343.1 million along with $1.3 billion available under our credit facility.

Current wording

maintained substantial liquidity with the accumulation of cash on hand of $251.1 million along with $1.3 billion available under our credit facility.

Previous wording

For first quarter 2024, we experienced a decrease in revenue from the sale of natural gas, NGLs and oil due to a 19% decrease in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) when compared to the same quarter of 2023. Daily production averaged 2.1 Bcfe in both the first quarter 2024 and 2023.

Current wording

For first six months 2024, we experienced a decrease in revenue from the sale of natural gas, NGLs and oil due to a 7% decrease in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) when compared to the same period of 2023. Daily production averaged 2.1 Bcfe in both the six months ended June 30, 2024 and 2023.

Previous wording

revenue from the sale of natural gas, NGLs and oil decreased 23% from the same period of 2023 with a 24% decrease in average realized prices (before cash settlements on our derivatives) slightly offset by higher production volumes;

Current wording

revenue from the sale of natural gas, NGLs and oil decreased 13% from the same period of 2023 with a 15% decrease in average realized prices (before cash settlements on our derivatives) slightly offset by higher production volumes;

Previous wording

direct operating expense per mcfe was $0.11 in first quarter 2024 compared to $0.14 in the same period of 2023 primarily due to lower workover costs along with lower water handling/hauling costs;

Current wording

direct operating expense per mcfe was $0.11 in first six months 2024 compared to $0.13 in the same period of 2023 primarily due to lower workover costs along with lower water hauling costs;

Previous wording

We generated $331.9 million of cash from operating activities in first quarter 2024, a decrease of $143.0 million from first quarter 2023, which reflects the impact of lower realized prices.

Current wording

We generated $480.7 million of cash from operating activities in first six months 2024, a decrease of $120.8 million from first six months 2023, which reflects the impact of lower working capital and lower realized prices.

Previous wording

Our revenues vary primarily as a result of changes in realized commodity prices and production volumes. Our revenues are generally recognized when control of the product is transferred to the customer and collectability is reasonably assured. In first quarter 2024, natural gas, NGLs and oil sales decreased 23% compared to first quarter 2023 with a 24% decrease in average realized prices (before cash settlements on our derivatives). The following table illustrates the primary components of natural gas, NGLs and oil sales for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

Our revenues vary primarily as a result of changes in realized commodity prices and production volumes. Our revenues are generally recognized when control of the product is transferred to the customer and collectability is reasonably assured. The following table illustrates the primary components of natural gas, NGLs and oil sales for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Production is maintained by drilling success as we place new wells on production which is partially offset by the natural decline of our natural gas and oil reserves through production. Our production for the three months ended March 31, 2024 and 2023 is set forth in the following table:

Current wording

Production is maintained through drilling success as new wells are placed on production, which is partially offset by the natural decline in production through existing wells. Our production for the three and six months ended June 30, 2024 and 2023 is set forth in the following table:

Previous wording

Our average realized price received (including all derivative settlements and third-party transportation costs) during first quarter 2024 was $2.05 per mcfe compared to $2.52 per mcfe in first quarter 2023. We believe computed final realized prices should include the total impact of transportation, gathering, processing and compression expense. Our average realized prices (including all derivative settlements and third-party transportation costs) calculation also includes all cash settlements for derivatives. Average realized prices (excluding derivative settlements) do not include derivative settlements or third-party transportation costs which are reported in transportation, gathering, processing and compression expense in the accompanying consolidated statements of income. Average realized prices (including derivative settlements) do include transportation costs where we receive net revenue proceeds from purchasers. Average realized price calculations for three months ended March 31, 2024 and 2023 are shown below:

Current wording

Our average realized price received (including all derivative settlements and third-party transportation costs) during second quarter 2024 was $1.66 per mcfe compared to $1.46 per mcfe in second quarter 2023. Our average realized price received (including all derivative settlements and third-party transportation costs) during first six months 2024 was $1.85 per mcfe compared to $1.99 per mcfe in first six months 2023. We believe computed final realized prices should include the total impact of transportation, gathering, processing and compression expense. Our average realized prices (including all derivative settlements and third-party transportation costs) calculation also includes all cash settlements for derivatives. Average realized prices (excluding derivative settlements) do not include derivative settlements or third-party transportation costs which are reported in transportation, gathering, processing and compression expense in the accompanying consolidated statements of income. Average realized prices (including derivative settlements) do include transportation costs where we receive net revenue proceeds from purchasers. Average realized price calculations for three and six months ended June 30, 2024 and 2023 are shown below:

Previous wording

Transportation, gathering, processing and compression expense was $290.9 million in first quarter 2024 compared to $285.5 million in first quarter 2023. These third-party costs are higher in first quarter 2024 when compared to first quarter 2023 primarily due to higher processing costs resulting from an increase in NGL volumes processed partially offset by lower fuel cost. We have included these costs in the calculation of average realized prices (including all derivative settlements and third-party transportation expenses paid by Range). The following table summarizes transportation, gathering, processing and compression expense for the three months ended March 31, 2024 and 2023 on a per mcf and per barrel basis (in thousands, except for costs per unit):

Current wording

Transportation, gathering, processing and compression expense was $572.4 million in first six months 2024 compared to $553.7 million in the same period of the prior year. These third-party costs are higher in first six months 2024 when compared to the same period of 2023 due to higher fixed gathering and transportation costs and higher electricity costs, slightly offset by lower fuel costs. We have included these costs in the calculation of average realized prices (including all derivative settlements and third-party transportation expenses paid by Range). The following table summarizes transportation, gathering, processing and compression expense for the three and six months ended June 30, 2024 and 2023 on a per mcf and per barrel basis (in thousands, except for costs per unit):

Previous wording

Derivative fair value incomewas income of $46.6 million in first quarter 2024 compared to income of $368.0 million in first quarter 2023. All of our derivatives are accounted for using the mark-to-market accounting method. Mark-to-market accounting treatment can result in more volatility of our revenues as the change in the fair value of our commodity derivative positions is included in total revenue. As commodity prices increase or decrease, such changes will have an opposite effect on the mark-to-market value of our derivatives. Gains on our derivatives generally indicate potentially lower wellhead revenues in the future while losses indicate potentially higher future wellhead revenues. The following table summarizes the impact of our commodity derivatives for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

Derivative fair value incomewas income of $16.8 million in second quarter 2024 compared to income of $123.7 million in second quarter 2023. Derivative fair value income was $63.4 million in first six months 2024 compared to income of $491.7 million in the same period of the prior year. All of our derivatives are accounted for using the mark-to-market accounting method. Mark-to-market accounting treatment can result in more volatility of our revenues as the change in the fair value of our commodity derivative positions is included in total revenue. As commodity prices increase or decrease, such changes will have an opposite effect on the mark-to-market value of our derivatives. Gains on our derivatives generally indicate potentially lower wellhead revenues in the future while losses indicate potentially higher future wellhead revenues. The following table summarizes the impact of our commodity derivatives for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Brokered natural gas, marketing and other revenue in first quarter 2024 was $31.8 million compared to $82.1 million in first quarter 2023 which is the result of lower broker sales prices and lower broker sales volumes (volumes not related to our production). We continue to optimize our transportation portfolio using these volumes. Such revenue in first quarter 2024 also includes the receipt of $2.9 million of interest income compared to $1.0 million in the same period of the prior year. Other marketing revenue for first quarter 2023 includes the receipt of a $3.6 million make-whole payment. See also Brokered natural gas and marketing expense below for more information on our net brokered margin.

Current wording

Brokered natural gas, marketing and other revenue in second quarter 2024 was $34.8 million compared to $44.9 million in second quarter 2023, which is the result of lower broker sales volumes (volumes not related to our production) slightly offset by higher broker sales prices. We continue to optimize our transportation portfolio using these volumes. Other revenue in second quarter 2024 also includes $3.4 million of interest income compared to $1.8 million in the same period of the prior year. Other marketing revenue for second quarter 2023 includes the receipt of a $1.5 million make-whole payment.

Previous wording

We believe some of our expense fluctuations are best analyzed on a unit-of-production or per mcfe basis. The following table presents information about certain of our expenses on a per mcfe basis for the three months ended March 31, 2024 and 2023:

Current wording

We believe some of our expense fluctuations are best analyzed on a unit-of-production or per mcfe basis. The following table presents information about certain of our expenses on a per mcfe basis for the three and six months ended June 30, 2024 and 2023:

Previous wording

Direct operating expense was $22.2 million in first quarter 2024 compared to $27.0 million in first quarter 2023. Direct operating expenses include normally recurring expenses to operate and produce our wells, non-recurring workover costs and repair-related expenses. Our direct operating costs decreased in first quarter 2024 primarily due to lower workover and lower water handling/hauling costs. We incurred $869,000 of workover costs in first quarter 2024 compared to $2.9 million in first quarter 2023. The following table summarizes direct operating expense per mcfe for the three months ended March 31, 2024 and 2023:

Current wording

Direct operating expense was $22.8 million in second quarter 2024 compared to $23.9 million in second quarter 2023. Direct operating expenses include normally recurring expenses to operate and produce our wells, non-recurring workover costs and repair-related expenses. Our direct operating costs decreased in second quarter 2024 primarily due to lower water hauling costs, lower workover costs and lower equipment costs. We incurred $644,000 of workover costs in second quarter 2024 compared to $784,000 in second quarter 2023.

Previous wording

Taxes other than income expense is predominately comprised of the Pennsylvania impact fee which is paid based on market commodity prices. In 2012, the Commonwealth of Pennsylvania enacted an "impact fee" which functions as a tax on unconventional natural gas and oil production from the Marcellus Shale in Pennsylvania. This impact fee was $5.7 million in first quarter 2024 compared to $6.8 million in first quarter 2023. The impact fee is based on drilling activities and is adjusted based on prevailing natural gas prices. This category also includes franchise, real estate and other applicable taxes. First quarter 2024 includes the refund of $618,000 associated with state commercial activity taxes. The following table summarizes taxes other than income per mcfe for the three months ended March 31, 2024 and 2023:

Current wording

Taxes other than income expense is predominately comprised of the Pennsylvania impact fee which is paid based on market commodity prices. In 2012, the Commonwealth of Pennsylvania enacted an "impact fee" which functions as a tax on unconventional natural gas and oil production from the Marcellus Shale in Pennsylvania. This impact fee was $4.6 million in second quarter 2024 compared to $6.7 million in second quarter 2023. This impact fee was $10.4 million in first six months 2024 compared to $13.5 million in first six months 2023, which reflects lower natural gas prices. The impact fee is based on drilling activities and is adjusted based on prevailing natural gas prices. This category also includes franchise, real estate and other applicable taxes. First six months 2024 includes a refund of $618,000 associated with state commercial activity taxes. The following table summarizes taxes other than income per mcfe for the three and six months ended June 30, 2024 and 2023:

Previous wording

General and administrative (G&A) expense was $43.9 million in first quarter 2024 compared to $43.1 million in first quarter 2023. The first quarter 2024 increase of $795,000 when compared to the same period of 2023 is primarily due to aggregate impacts of cost inflation. The following table summarizes G&A expenses on a per mcfe basis for the three months ended March 31, 2024 and 2023:

Current wording

G&A expense for first six months 2024 was $84.1 million compared to $82.7 million in the same period of 2023. The increase of $1.4 million is primarily due to aggregate impacts of cost inflation. The following table summarizes G&A expenses on a per mcfe basis for the three and six months ended June 30, 2024 and 2023:

Previous wording

Interest expense was $30.5 million in first quarter 2024 compared to $32.2 million in first quarter 2023. The following table presents information about interest expense per mcfe for the three months ended March 31, 2024 and 2023:

Current wording

Interest expense was $29.7 million in second quarter 2024 compared to $31.1 million in second quarter 2023. Interest expense was $60.2 million in first six months 2024 compared to $63.3 million in first six months 2023. The following table presents information about interest expense per mcfe for the three and six months ended June 30, 2024 and 2023:

Previous wording

The decrease in interest expense for first quarter 2024 from the same period of 2023 was primarily due to lower average outstanding debt balances and a slightly lower average interest rate. We had no debt outstanding on the bank credit facility for first quarter 2024 compared to $32.0 million in first quarter 2023 and the weighted average interest rate on the bank credit facility was 8.4% in first quarter 2023.

Current wording

The decrease in interest expense for first six months 2024 from the same period of 2023 was primarily due to lower average outstanding debt balances. We had no debt outstanding on the bank credit facility for first six months 2024 compared to a $16.0 million average debt balance for first six months 2023 and the weighted average interest rate on the credit facility was 8.4% in first six months 2023.

Previous wording

Depletion, depreciation and amortization expense was $87.1 million in first quarter 2024 compared to $86.6 million in first quarter 2023. This increase is due to slightly higher production volumes. Depletion expense, the largest component of DD&A expense, was $0.44 per mcfe in first quarter 2024 and first quarter 2023. We have historically adjusted our depletion rates in the fourth quarter of each year based on the year-end reserve report and at other times during the year when circumstances indicate there has been a significant change in reserves or costs. The following table summarizes DD&A expense per mcfe for the three months ended March 31, 2024 and 2023:

Current wording

DD&A expense was $174.7 million in first six months 2024 compared to $171.6 million in the same period of 2023. This increase is due to a slight increase in production volumes. Depletion expense was $0.44 per mcfe in first six months 2024 compared to $0.44 in the same period of 2023. We have historically adjusted our depletion rates in the fourth quarter of each year based on the year-end reserve report and at other times during the year when circumstances indicate there has been a significant change in reserves or costs. The following table summarizes DD&A expense per mcfe for the three and six months ended June 30, 2024 and 2023:

Previous wording

Our total operating expenses also include other expenses that generally do not trend with production. These expenses include stock-based compensation, brokered natural gas and marketing expense, exploration expense, abandonment and impairment of unproved properties, exit costs, deferred compensation plan expense and gain or loss on early extinguishment of debt. Stock-based compensation includes the amortization of restricted stock grants and performance units. The following table details the allocation of stock-based compensation to functional expense categories for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

Our total operating expenses also include other expenses that generally do not trend with production. These expenses include stock-based compensation, brokered natural gas and marketing expense, exploration expense, abandonment and impairment of unproved properties, exit costs, deferred compensation plan expense and gain on early extinguishment of debt. Stock-based compensation includes the amortization of restricted stock grants and performance units. The following table details the allocation of stock-based compensation to functional expense categories for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Brokered natural gas and marketing expense was $31.6 million in first quarter 2024 compared to $67.1 million in first quarter 2023 due to lower commodity prices and lower broker purchase volumes (volumes not related to our production). The following table details our brokered natural gas, marketing and other net margin for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

Brokered natural gas and marketing expense was $34.1 million in second quarter 2024 compared to $44.8 million in second quarter 2023 due to lower broker purchase volumes (volumes not related to our production) slightly offset by higher commodity prices. Brokered natural gas and marketing expense was $65.7 million in first six months 2024 compared to $111.9 million in first six months 2023 due to lower commodity prices and lower broker purchase volumes. The following table details our brokered natural gas, marketing and other net margin for the three and six months ended June 30, 2024 and 2023(in thousands):

Previous wording

Exploration expense was $4.5 million in first quarter 2024 compared to $4.6 million in first quarter 2023. The following table details our exploration expense for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

Exploration expense was $6.7 million in second quarter 2024 compared to $7.4 million in second quarter 2023 due to lower seismic costs. Exploration expense was $11.2 million in first six months 2024 compared to $12.1 million in first six months 2023 due to lower seismic costs slightly offset by higher delay rentals. The following table details our exploration expense for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Abandonment and impairment of unproved properties expense was $2.4 million in first quarter 2024 compared to $7.5 million in first quarter 2023. Abandonment and impairment of unproved properties for first quarter 2024 decreased when compared to the same period of 2023 due to lower expected lease expirations in Pennsylvania. When we do not intend to drill on a property prior to expiration, we have allowed acreage to expire and we expect to allow acreage to expire in the future. However, we also believe acreage needed for our future development plans can be leased again.

Current wording

Abandonment and impairment of unproved properties expense was $1.5 million in second quarter 2024 compared to $25.8 million in second quarter 2023. Abandonment and impairment of unproved properties was $3.9 million in first six months 2024 compared to $33.3 million in the same period of 2023. Abandonment and impairment of unproved properties for second quarter 2024 and first six months 2024 decreased when compared to the same periods of 2023 due to lower expected lease expirations in Pennsylvania. When we do not intend to drill on a property prior to expiration, we have allowed acreage to expire and we expect to allow acreage to expire in the future. However, we also believe acreage needed for our future development plans can be leased again.

Previous wording

Exit costs were $10.3 million in first quarter 2024 compared to $12.3 million in first quarter 2023. In first quarter 2024, we recorded $10.3 million accretion expense primarily related to retained liabilities for certain gathering, transportation and processing obligations extending until 2030 compared to accretion expense of $10.3 million in the same quarter of the prior year. First quarter 2023 also included a $2.0 million adjustment for the difference between estimated and actual payments.

Current wording

Exit costs were $10.1 million in second quarter 2024 compared to $48.7 million in second quarter 2023. In second quarter 2024, we recorded $10.1 million accretion expense primarily related to retained liabilities for certain gathering, transportation and processing obligations extending through 2030 compared to accretion expense of $10.9 million in the same quarter of the prior year. Second quarter 2023 also included an adjustment of $37.8 million to increase this obligation primarily due to an increase in forecasted rates due to inflation.

Previous wording

Deferred compensation plan expense was a loss of $6.4 million in first quarter 2024 compared to a loss of $9.4 million in first quarter 2023. This non-cash item relates to the increase or decrease in value of the liability associated with our common stock that is vested and held in our deferred compensation plan. The deferred compensation liability is adjusted to fair value by a charge or a credit to deferred compensation plan expense. Our stock price increased from $30.44 at December 31, 2023 to $34.43 at March 31, 2024. In the same period of the prior year our stock price increased from $25.02 at December 31, 2022 to $26.47 at March 31, 2023.

Current wording

Deferred compensation plan expense was a loss of $1.2 million in second quarter 2024 compared to a loss of $11.2 million in second quarter 2023. This non-cash item relates to the increase or decrease in value of the liability associated with our common stock that is vested and held in our deferred compensation plan. The deferred compensation liability is adjusted to fair value by a charge or a credit to deferred compensation plan expense. Our stock price decreased from $34.43 at March 31, 2024 to $33.53 at June 30, 2024. In the same period of the prior year our stock price increased from $26.47 at March 31, 2023 to $29.40 at June 30, 2023.

Previous wording

Income tax expensewas an expense of $18.2 million in first quarter 2024 compared to an expense of $121.9 million in first quarter 2023. The 2024 and 2023 effective tax rates were different than the statutory tax rates due to state income taxes, equity compensation and the limitation of our executive compensation.

Current wording

Income tax (benefit) expensewas a benefit of $18.7 million in second quarter 2024 compared to an expense of $14.7 million in second quarter 2023. Income tax benefit was $490,000 in first six months 2024 compared to an expense of $136.6 million in the same period of 2023. The 2024 and 2023 effective tax rates were different than the statutory tax rates due to state income taxes, tax credits, equity compensation and the limitation of our executive compensation expense.