RANGE RESOURCES CORP

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 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.

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 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 third quarter 2024 based on signs of lower industry well completion activity and supply declines, along with growth in demand for natural gas fired electricity generation. 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. 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 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.

Current wording

Commodity prices have remained volatile. Benchmarks for natural gas and NGLs decreased in third quarter 2024 and first nine months 2024 compared to the same periods of 2023. As a result, we experienced decreases in our price realizations for the quarter and nine months ended September 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 and six months ended June 30, 2024 and 2023:

Current wording

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

Previous 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.

Current wording

During third quarter 2024, we recognized net income of $50.7 million, or $0.21 per diluted common share compared to net income of $49.4 million, or $0.20 per diluted common share during third quarter 2023. The higher net income in third quarter 2024 compared to third quarter 2023 is primarily due to higher production slightly offset by lower realized prices.

Previous wording

For second quarter 2024, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 14% increase 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, combined with a slight increase of production. Daily production averaged 2.2 Bcfe in second quarter 2024 and 2.1 Bcfe in the same period of 2023.

Current wording

In third quarter 2024, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 4% increase in production. 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 remained flat. Daily production averaged 2.2 Bcfe in third quarter 2024 and 2.1 Bcfe in the same period of 2023.

Previous wording

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

Current wording

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

Previous wording

revenue from the sale of natural gas, NGLs and oil increased 2% from the same period of 2023 due to a 3% increase in production volumes, partially offset by a 1% decrease in average realized prices (before cash settlements on our derivatives);

Current wording

revenue from the sale of natural gas, NGLs and oil increased 1% from the same period of 2023 due to a 4% increase in production volumes, partially offset by a 3% decrease in average realized prices (before cash settlements on our derivatives);

Previous 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;

Current wording

revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 7% from the same period of 2023;

Previous wording

direct operating expense per mcfe was $0.12 in second quarter 2024 compared to $0.13 in the same period of 2023 primarily due to lower water hauling costs, lower workovers and lower equipment costs;

Current wording

direct operating expense per mcfe was $0.12 in third quarter 2024 compared to $0.12 in the same period of 2023;

Previous 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;

Current wording

transportation, gathering, processing and compression per mcfe was $1.51 in third quarter 2024 compared to $1.42 in the same period of 2023, primarily due to an increase in NGLs volumes and prices;

Previous wording

interest expense decreased 5% from the same period of 2023 due to lower debt balances.

Current wording

interest expense decreased 4% from the same period of 2023 due to lower debt balances.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

paid $19.3 million of dividends, or $0.08 per share;

Previous wording

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

Current wording

repurchased in the open market $3.0 million face value of our 4.875% senior notes due 2025 at a discount; and

Previous 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.

Current wording

maintained substantial liquidity with the accumulation of cash on hand of $277.5 million along with $1.3 billion available under our credit facility.

Previous wording

We generated $148.8 million of cash from operating activities in second quarter 2024, an increase of $22.2 million from second quarter 2023, which reflects the impact of higher realized prices.

Current wording

We generated $245.9 million of cash from operating activities in third quarter 2024, an increase of $95.7 million from third quarter 2023, which reflects the impact of higher working capital.

Previous wording

Overview of First Six Months 2024 Results

Current wording

Overview of First Nine Months 2024 Results

Previous wording

During first six months 2024, we recognized net income of $120.8 million, or $0.49 per diluted common share compared to net income of $511.7 million, or $2.07 per diluted common share during the same period of 2023. The lower net income in first six months 2024 compared to the same period of 2023 is primarily due to lower derivative fair value income (non-cash fair value adjustment related to our derivatives) combined with lower realized prices.

Current wording

During first nine months 2024, we recognized net income of $171.5 million, or $0.70 per diluted common share compared to net income of $561.1 million, or $2.27 per diluted common share during the same period of 2023. The lower net income in first nine months 2024 compared to the same period of 2023 is primarily due to lower derivative fair value income (non-cash fair value adjustment related to our derivatives) combined with lower realized prices slightly offset by higher production.

Previous 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.

Current wording

For first nine months 2024, we experienced a decrease in revenue from the sale of natural gas, NGLs and oil due to a 5% 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 2.2 Bcfe in the nine months ended September 30, 2024 compared to 2.1 Bcfe in the same period of the prior year.

Previous wording

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

Current wording

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

Previous 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;

Current wording

revenue from the sale of natural gas, NGLs and oil decreased 9% from the same period of 2023 with an 11% decrease in average realized prices (before cash settlements on our derivatives) slightly offset by higher production volumes;

Previous wording

revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) decreased 2% 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 1% from the same period of 2023;

Previous 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;

Current wording

direct operating expense per mcfe was $0.12 in first nine 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

transportation, gathering, processing and compression per mcfe was $1.47 in first six months 2024 compared to $1.45 in the same period of 2023 primarily due to an increase in fixed gathering and transportation costs;

Current wording

transportation, gathering, processing and compression per mcfe was $1.48 in first nine months 2024 compared to $1.44 in the same period of 2023 primarily due to an increase in NGLs volumes and prices;

Previous wording

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

Current wording

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

Previous wording

paid $38.9 million of dividends, or $0.16 per share;

Current wording

paid $58.1 million of dividends, or $0.24 per share;

Previous wording

repurchased $20.1 million of our common stock, of which $10.2 million settled during the quarter;

Current wording

repurchased $44.1 million of our common stock;

Previous wording

repurchased in the open market $66.5 million face value of our 4.875% senior notes due 2025 at a discount; and

Current wording

repurchased in the open market $70.2 million face value of our 4.875% senior notes due 2025 at a discount; and

Previous 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.

Current wording

maintained substantial liquidity with the accumulation of cash on hand of $277.5 million along with $1.3 billion available under our credit facility.

Previous 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.

Current wording

We generated $726.6 million of cash from operating activities in first nine months 2024, a decrease of $25.2 million from first nine months 2023, which reflects the impact of 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. 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):

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 nine months ended September 30, 2024 and 2023 (in thousands):

Previous 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:

Current wording

Production is maintained through drilling success as new wells are placed in production, which is partially offset by the natural decline in production through existing wells. Our production for the three and nine months ended September 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 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:

Current wording

Our average realized price received (including all derivative settlements and third-party transportation costs) during third quarter 2024 was $1.67 per mcfe compared to $1.67 per mcfe in third quarter 2023. Our average realized price received (including all derivative settlements and third-party transportation costs) during first nine months 2024 was $1.79 per mcfe compared to $1.89 per mcfe in first nine 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. Our 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. Our average realized prices (including derivative settlements) do include transportation costs where we receive net revenue proceeds from purchasers. Our average realized price calculations for three and nine months ended September 30, 2024 and 2023 are shown below:

Previous wording

Transportation, gathering, processing and compression expense was $281.5 million in second quarter 2024 compared to $268.2 million in second quarter 2023. These third-party costs are higher in second quarter 2024 when compared to second quarter 2023 primarily due to higher fixed gathering and transportation costs, higher electricity costs and the impact of higher NGLs prices which result in higher processing costs.

Current wording

Transportation, gathering, processing and compression expense was $306.2 million in third quarter 2024 compared to $277.2 million in third quarter 2023. These third-party costs are higher in third quarter 2024 when compared to third quarter 2023 primarily due to an increase in NGLs volumes and prices.

Previous 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):

Current wording

Transportation, gathering, processing and compression expense was $878.5 million in first nine months 2024 compared to $830.9 million in the same period of the prior year. These third-party costs are higher in first nine months 2024 when compared to the same period of 2023 due to an increase in NGLs volumes and prices. 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 nine months ended September 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 $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):

Current wording

Derivative fair value incomewas $47.1 million in third quarter 2024 compared to $38.4 million in third quarter 2023. Derivative fair value income was $110.5 million in first nine months 2024 compared to $530.1 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 nine months ended September 30, 2024 and 2023 (in thousands):

Previous 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.

Current wording

Brokered natural gas, marketing and other revenue in third quarter 2024 was $34.6 million compared to $44.6 million in third quarter 2023, which is the result of lower broker sales volumes (volumes not related to our production) combined with lower broker sales prices. We continue to optimize our transportation portfolio using these volumes. Other revenue in third quarter 2024 also includes $3.2 million of interest income compared to $1.3 million in the same period of the prior year.

Previous wording

Brokered natural gas, marketing and other revenue was $66.6 million in first six months 2024 compared to $127.0 million in first six months 2023, which is the result of lower broker sales prices combined with lower broker sales volumes. Such revenue in first six months 2024 also includes the receipt of $6.3 million of interest income compared to $2.7 million in the same period of the prior year. The six months ended June 30, 2023 also includes $5.1 million in make-whole payments. 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 was $101.2 million in first nine months 2024 compared to $171.6 million in first nine months 2023, which is the result of lower broker sales volumes combined with lower broker sales prices. Other revenue in first nine months 2024 also includes $9.5 million of interest income compared to $4.0 million in the same period of the prior year. The nine months ended September 30, 2023 also includes $5.1 million in make-whole payments. See also Brokered natural gas and marketing expense below for more information on our net brokered margin.

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 and six months ended June 30, 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 nine months ended September 30, 2024 and 2023:

Previous 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.

Current wording

Direct operating expense was $25.3 million in third quarter 2024 compared to $22.6 million in third 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 increased in third quarter 2024 primarily due to higher water hauling costs, pumping expenses and contract labor and service expenses. We incurred $690,000 of workover costs in third quarter 2024 compared to $603,000 in third quarter 2023.