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Range Resources Corp Reports Solid Financial Performance and Strategic 2024 Outlook

  • Operating Cash Flow: Range Resources Corp generated $978 million in operating cash flow for the full year 2023.

  • Debt Reduction: Successfully reduced net debt by $292 million, marking the sixth consecutive year of debt reduction.

  • Production Levels: Maintained a net production average of 2,139 Mmcfe per day, with natural gas accounting for approximately 69%.

  • Capital Spending: Reported all-in capital spending of $614 million, equating to $0.79 per mcfe.

  • Proved Reserves: Proved reserves stood at 18.1 Tcfe with positive performance revisions.

  • 2024 Guidance: Announced a 2024 capital budget of $620 to $670 million, aiming to hold production flat at approximately 2.12 2.16 Bcfe per day.

On February 21, 2024, Range Resources Corp (NYSE:RRC), a Fort Worth-based independent natural gas and NGL producer, announced its fourth quarter 2023 financial results and provided guidance for 2024. The company, which focuses on operations in the Marcellus Shale in Pennsylvania, released its 8-K filing detailing a year of operational safety, efficiency, and financial prudence amidst lower natural gas prices. With a strong emphasis on debt reduction and shareholder returns, RRC has positioned itself for resilient free cash flow in the upcoming year.

Range Resources Corp Reports Solid Financial Performance and Strategic 2024 Outlook
Range Resources Corp Reports Solid Financial Performance and Strategic 2024 Outlook

Financial and Operational Highlights

Range Resources Corp's commitment to financial discipline is evident in its 2023 performance. The company reduced its net debt by $292 million and ended the year with a net debt to EBITDAX ratio of 1.3x. This deleveraging reflects RRC's focus on strengthening its balance sheet, which is crucial for navigating the volatile oil and gas market. The company's net production predominantly comprised natural gas, aligning with the growing demand for cleaner energy sources.

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CEO Dennis Degner commented on the company's strategic positioning, emphasizing the importance of a strong balance sheet, consistent operational performance, and a low capital reinvestment rate. He highlighted the company's readiness to meet increasing domestic and international demand for natural gas and NGLs, citing Range's competitive emissions intensity and high-return inventory of de-risked wells.

2024 Capital and Production Guidance

Looking ahead, Range Resources Corp has outlined a capital budget for 2024 that prioritizes maintenance capital, drilling and completion capital for well inventory, targeted acreage investment to increase lateral lengths, and water infrastructure improvements to lower future costs. The company plans to maintain production levels with two drilling rigs and one frac crew, leveraging operational efficiencies gained in 2023.

The company's financial position remains robust, with significant availability under its current share repurchase program. The fourth quarter saw Range purchasing shares at an average price of approximately $29.75, demonstrating confidence in its stock value.

Income Statement and Balance Sheet Review

For the fourth quarter of 2023, Range Resources Corp reported revenues of $941 million, with a net income of $310 million, or $1.27 per diluted share. Adjusted for non-GAAP measures, the adjusted net income was $153 million, or $0.63 per diluted share. The company's unit costs per mcfe decreased across several categories, contributing to a 5% reduction in total unit costs plus depletion, depreciation, and amortization (DD&A).

Range's average production and realized pricing for the fourth quarter of 2023 reflected a balanced portfolio, with natural gas, NGLs, and oil price realizations averaging $3.25 per mcfe after hedges. The company's hedging strategy has been effective in mitigating price volatility and ensuring predictable cash flow.

Proved Reserves and Future Development

Year-end 2023 proved reserves were slightly increased to 18.113 Tcfe, with a present value (PV10) under SEC methodology of $7.9 billion. The company's future development costs are expected to be efficient at $0.40 per mcfe, highlighting Range's cost-effective approach to resource development.

Overall, Range Resources Corp's 2023 results and 2024 guidance reflect a company that is strategically managing its resources and capital to ensure long-term value creation for its shareholders. The company's focus on maintaining production levels, reducing debt, and optimizing operational efficiencies positions it well for the future.

For more detailed information and financial analysis, investors and interested parties are encouraged to review the full 8-K filing and attend the upcoming conference call scheduled for February 22, 2024.

Explore the complete 8-K earnings release (here) from Range Resources Corp for further details.

This article first appeared on GuruFocus.