In This Article:
-
Free Cash Flow: $453 million generated in 2024.
-
Capital Investments: $654 million in 2024.
-
Production: Approximately 2.18 Bcf equivalent per day in 2024.
-
Dividends Paid: $77 million in 2024.
-
Share Repurchases: $65 million in 2024.
-
Net Debt Reduction: $172 million in 2024.
-
Aggregate Unhedged Price Realization: $2.76 per Mcfe for 2024.
-
Capital Budget for 2025: $650 million to $690 million.
-
Projected Production for 2025: Approximately 2.2 Bcfe per day.
-
Net Operating Loss (NOL) Carryforwards: $1.4 billion federal and $770 million Pennsylvania state.
Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Range Resources Corp (NYSE:RRC) generated free cash flow even at low natural gas prices, allowing for share repurchases, dividends, and meeting balance sheet targets.
-
The company achieved the highest NGL premiums in its history by marketing ethane, propane, and butane internationally.
-
RRC's operational efficiency was highlighted by setting new drilling efficiency records and achieving a 6% increase in frac stages per day.
-
The company plans modest production growth in 2025, with a three-year outlook to increase production by 19% by 2027.
-
RRC has a low reinvestment rate, expected to remain below 50%, allowing for increasing returns of capital while growing the business.
Negative Points
-
Despite positive cash flow, the company faced challenging natural gas prices in 2024.
-
RRC's growth plans are contingent on securing additional transport capacity and incremental in-basin demand.
-
The company anticipates a slight production decline in the first half of 2025 before increasing in the second half.
-
There is a risk of oversupply in the LNG market, which could impact RRC's growth plans.
-
RRC's future cash tax rate is expected to increase to high teens by 2027, as NOLs are fully utilized.
Q & A Highlights
Q: Can you explain the decision to delay growth until 2027 despite having DUCs that could have supported earlier growth? A: Dennis Degner, CEO, explained that the decision to delay growth was based on the need for clear line of sight on demand growth opportunities and ensuring a home for the production. The company wanted to ensure that the production could reach known end markets, which is crucial for cash flow goals. The current operational program with two drilling rigs and one completion crew strikes a balance for modest, healthy growth.
Q: How does Range Resources plan to manage potential price weaknesses as it grows into 2027? A: Mark Scucchi, CFO, stated that the company maintains flexibility in its hedging strategy, which includes modest hedging to provide insurance for steadiness in product balance sheets. The structural hedges built into the business, such as the production mix and balance sheet strength, reduce the need for extensive hedging. The company is confident in its ability to adapt based on macro trends.