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Range Resources (RRC) Beats on Q4 Earnings and Revenues

Zacks Equity Research
Updated

Range Resources Corporation RRC reported fourth-quarter 2017 adjusted earnings of 22 cents per share that surpassed the Zacks Consensus Estimate of 15 cents. The company had incurred a loss of 66 cents in the year-ago quarter.

Total revenues of $679 million beat the Zacks Consensus Estimate of $643 million and surged 168% year over year from $253.5 million.
 

Range Resources Corporation Price, Consensus and EPS Surprise

 

Range Resources Corporation Price, Consensus and EPS Surprise | Range Resources Corporation Quote

 

The fourth-quarter 2017 results were boosted by an increase in oil and gas equivalent production and price realizations, partially offset by higher expenses.

In 2017, the company reported adjusted earnings of 58 cents per share, which beat the Zacks Consensus Estimate of 51 cents. The company reported earnings of 3 cents in 2016.

Total revenues in 2017 improved 137.4% year over year to $2,611.0 million. Revenues were also above the Zacks Consensus Estimate of $2,470.0 million.

Operational Performance

During the fourth quarter, the company’s production averaged almost 2,170.4 million cubic feet equivalent per day (MMcfe/d). Natural gas made up for 66.5% of total production, while natural gas liquids (NGLs) and oil accounted for the remaining 33.5%.

Total production volume improved 17% from the year-ago quarter but lagged the Zacks Consensus Estimate of 2,180 MMcfe/d.

On a year-over-year basis, oil production rose 25%, while NGL production rose 18%. Moreover, natural gas production jumped 16% year over year.

The company’s total price realization (including the effects of hedges and derivative settlements) averaged $2 per thousand cubic feet equivalent (Mcfe), down 10% year over year. Of this, NGL prices fell 14% to $9.65 per barrel while crude oil prices declined 17% to $50.95 per barrel, both on a year-over-year basis. Natural gas prices were down 8% year over year to $1.77 per Mcf.

Expenses

Total expenses were $806.9 million, up 58% year over year.

Financials

At the end of the quarter, the company had long-term debt of approximately $4,108.8 million with a debt-to-capitalization ratio of 41.6%. The company incurred expenditures of $369 million in the fourth quarter for drilling and completion of 48 net wells.     

Q4 Price Performance

During the October-December quarter of 2017, Range Resources’ shares lost 12.8 against the industry’s 9.1% rally.

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Guidance

For the first quarter of 2018, the company estimates production at about 2.18 billion cubic feet equivalent (Bcfe) per day. For 2018, production is projected at about 2.23 Bcfe per day. With this, the annual output is likely to rise 11%.

The upstream energy player expects the 2018 capital budget at $941 million.

Reserves

As of Dec 31, 2017, total proved reserves were 15.3 trillion cubic feet equivalent (Tcfe), up 26% compared with Dec 31, 2016.

Zacks Rank & Key Picks

Range Resources carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are EOG Resources EOG, Pioneer Natural Resources Company PXD and ConocoPhillips COP. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX-based EOG Resources is a major independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 40.94% in the preceding four quarters.

Headquartered at Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 66.92% in the preceding four quarters.

ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. The company delivered a positive earnings surprise of 144.45% in the preceding four quarters.

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Range Resources Corporation (RRC) : Free Stock Analysis Report
 
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
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