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RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 1
Hart EnergyEnergy Capital Investment Symposium
RANGE Resources
Jeffrey L. VenturaPresident & Chief Operating Officer
June 3, 2009
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 2
RANGE Resources
Natural Gas Outlook Range Overview & Strategy Range Operations
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 3
Natural Gas Outlook – How did we get here?
NYMEX Spot Price
$1.50
$3.50
$5.50
$7.50
$9.50
$11.50
$13.50
June Jul-08 Aug Sept Oct Nov Dec Jan Feb Mar-09
Since mid-year 2008, the spot price has fallen ~$10 per mcf!
Question – How much of the ~$10 drop is due to too much supply and how much is due to the drop in demand?
$13.58
$3.91
Jul-08 Jun-09
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 4
Natural Gas Outlook – Supply Side is Correcting
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# O
f Rig
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U.S. Dry Natural Gas Production EIA Natural Gas Rig CountProjected Natural Gas Rig Count
Data retrieved from EIA website www.eia.doe.gov
It took 6.5 years for the rig count to double It has taken just 7 months for the rig count to drop in half Looks like the rig count is headed for ~600
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RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 5
Natural Gas Outlook – Where is Supply Headed?
If Rig Count
Drops To
Year 2009 Y-O-Y Impact
Dec. ’09 Y-O-Y
Exit RateImpact
600 -3% -13%
700 -2% -11%
800 -1% -9%
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 6
Natural Gas Outlook – Price Rebound
$13.58 – July 2008
NYMEX Spot Price
$8.00
$7.00
$3.63 – March 2009
As the supply side corrects, gas prices will increase to the “marginal cost” of development
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 7
Natural Gas Outlook – Price Support
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EX $
/ M
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TU
U.S. Dry Natural Gas Production NYMEX Gas PricesH
urric
anes
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and
Rita
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Data retrieved from EIA website www.eia.doe.gov
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 8
Natural Gas Outlook – Short Term Considerations
The U.S. base decline is ~30% per year, equating to a ~15 Bcf decline per year
The rig count will not rebound materially until natural gas prices rise to the “marginal cost” to develop (~$7 - $8 per mcf)
Once natural gas prices move up and the rig count moves back up, it will likely take at least a year for production to stop declining
2009 capital budgets will continue to come down throughout the year and 2010 capital budgets will likely not increase materially as most companies’ hedges roll off at year-end 2009
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 9
Natural Gas Outlook – Longer Term Considerations
“Clean Coal” technology is not commercial yet, it will take years and billions of dollars
The average coal fired electric generation plant in the northeast is ~50 years old
Essentially all new electric generation under consideration is natural gas fired
“Cap and Trade” legislation will enhance the economics of natural gas versus coal
Natural Gas vs. Coal
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 10
Natural Gas Outlook – Longer Term Considerations
Natural gas has “natural” advantages over oil (foreign controlled, environmental) and coal (environmental)
Renewable energy is very expensive and will take many, many years to have a material impact
Nuclear – very long construction time, high upfront cost and NIMBY factor (Not In My Backyard)
“Natural Gas… is an important transition fuel. It has fewer CO2
emissions than either coal or oil, especially coal.”
Al Gore (Meet the Press July 20, 2008)
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 11
(1) As of December 31, 2008
Market Cap ~ $6 billion Reserve base (1)
– 2.7 Tcfe – 83% natural gas– 18 year reserve life
Operations– 2009E – 500 (315 net) wells– 15 rigs drilling
Large acreage and drilling inventory (1) – 3.4 million acres (2.8 million net)– 12,000+ drilling projects in inventory
Gulf Coast
SouthwestSouthwest
Appalachia
Midcontinent
Range Resources Overview
Gulf Coast
Nora Field Virginia2.3 Tcfe resource potential
6,000+ wells to drill
Marcellus Shale15 to 22 Tcfe resource potential
Fort Worth Barnett1.8 Tcfe resource potential1,000+ wells to drill (core)
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 12
Range Strategies
Grow production and reserves (on a per share basis/debt adjusted) by double-digit rates at low costs (top quartile)
Grow primarily through the drill bit, complemented with low cost acquisitions and occasional divestitures of lower-growth properties
Maintain a simple capital structure
Target a debt to capital ratio of 40%
Hire the best people available and reward them with equity participation
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 13
130
160
190
220
250
280
310
340
370
400
430
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Mmcfe/dayMmcfe/day
2003 2004 2005 2006 2007 2008
25 Consecutive Quarters of Production Growth25 Consecutive Quarters of Production Growth10% Year-Over-Year Growth Targeted for 200910% Year-Over-Year Growth Targeted for 2009
Consistent Growth
1Q09
Actual Guidance
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 14
Range – Low-Cost Producer
$3.00
$4.00
$5.00$6.00
$7.00
$8.00
$9.00$10.00
$11.00
$12.00
$13.00
$14.00$15.00
$16.00
$17.00
$18.00$19.00
$20.00
$21.00
BANK OF AMERICA - 2008 NYMEX BREAKEVEN ANALYSISBANK OF AMERICA - 2008 NYMEX BREAKEVEN ANALYSIS
Companies include (in alphabetical order): Atlas, Berry, Brigham, Chaparral, Chesapeake, Cimarex, Clayton Williams, Comstock, Delta, Denbury, El Paso, Encore, Energy XXI, Exco, Forest, Helix, Mariner, McMoran, Newfield, Petrohawk, Petroquest, Pioneer, Plains, Quicksilver, Range Resources, SandRidge, Southwestern, Stone, Swift, Venoco, W&T, Whiting
(mcfe)
Range – 2nd in 2007 and 2008, 1st in 2004, 2005 & 2006
Median $8.03
RangeResources
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 15
Not Just Growing Production and Reserves …
0.4
0.6
0.8
1
2005 2006 2007 20085
10
15
20
2005 2006 2007 2008
Range is Growing Production and Reserves Per Share, Debt Adjusted at Better than a 10% CAGR
Production/share – debt adjusted Reserves/share – debt adjusted
Production/share = Annual production divided by debt adjusted average diluted shares outstanding
Reserves/share = Year-end proven reserves, excluding price revisions, divided by debt adjusted fourth quarter average diluted shares outstanding
mcf
e
mcf
e
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 16
Range’s Reserve Base and Upside are Growing
Reserve Growth Drivers (Tcfe) YE 2004 YE 2005 YE 2006 YE 2007 YE 2008
Proved Reserves 1.2 1.4 1.8 2.2 2.7
Drilling Inventory (1) 1.0 1.4 2.0 3.1 3.7
Emerging Plays (1) 1.0 2.0 to 3.2 4.7 to 7.2 13.1 to 18.8 16.8 to 24.5
Unbooked Potential (1) 2.0 3.4 to 4.6 6.7 to 9.2 16.2 to 21.9 20.5 to 28.2
((1) Net unrisked resource potential
Low-risk, multi-year drilling inventory has potential to more than double proved reserves
Drilling inventory and emerging plays potential is 8 to 10 times existing proved reserves
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 17
Emerging Plays Upside 16.8 to 24.5 Tcfe
PlayNet
Acreage
Net Unrisked Resource Potential Activity
Marcellus Shale ~900,000 acres 15 to 22 Tcfe Drilling and leasing
Huron Shale 165,000 acres 0.8 to 1.5 Tcfe Drilling
FW Barnett Shale – Extension Areas 42,000 acres 200 Bcfe Drilling
Woodford Shale – Ardmore Basin 17,000 acres 400 Bcfe Drilling
Permian – Barnett and Woodford Shales and Atoka 20,000 acres 400 Bcfe Testing
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 18
96,000 net acres of leasehold
Production increasing – now 125 Mmcfe/d net
3 rigs running
42,000 net acres in the Core –1,000+ locations to drill
Barnett – 1.8 Tcf Unbooked Potential
SE TARRANT / NE JOHNSON / NW ELLIS / SW DALLAS
COUNTIES
SOUTHERN TARRANTCOUNTY
SE PARKER / NE HOODCOUNTIES
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 19
4 Bcf for $2.4 million cost 3,100 acres 30 wells drilled 19 wells to be drilled on 500 foot
spacing 48 wells to be drilled on 250 foot
spacing 5 wells to be completed Recent well completed
approximately 3 miles south – IP averaged a record 30-day rate of 9.6 Mmcfpd
Low F&D / High ROR
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 20
P ETRA 7/22/20 088:19:16 AM
Numerous Locations with F&D <$1.00 mcfe – E. Parker / Hood County
Reduced cost to drill – 10 days from spud to rig release
Completed well cost $1.6 million
Average EUR- 2.5 Bcfe
F&D cost of $0.80/mcfe
59 locations on 1,000 foot spacing
135 locations on 500 foot spacing
ParkerParker
HoodHood
MITCHELL RANCH AREA (3,150 ACRES)18 GAS COMPLETIONS5 GAS WAITING ON COMPLETION2 DRILLING14 LOCATIONS AT 1,000’ SPACING42 LOCATIONS AT 500’ SPACING
CROCKET’S BOUNTY AREA (3,500 ACRES)5 GAS COMPLETIONS2 DRILLING22 LOCATIONS AT 1,000’ SPACING49 LOCATIONS AT 500’ SPACING
TEAL AREA (2,600 ACRES)23 LOCATIONS AT 1,000’ SPACING44 LOCATIONS AT 500’
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 21
Barnett Shale Well Economics
Core area – Tarrant, Denton, Johnson and NW Ellis Counties
EUR – 3.0 Bcf
Capital – $2.6MM
F&D – $1.14/mcfe At $5.00 flat NYMEX
generates 32% rate of return0%
10%20%30%40%50%60%70%80%
$4.00 $5.00 $6.00 $7.00
Gas Price, $/mmbtu NYMEX
IRR
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 22
Nora/Haysi Field in Virginia
Nora Field
VAVA
~300,000 acres Over 2,150 producing CBM &
tight gas wells 6,000 additional wells to drill F&D ~$1.00/mcfe LOE ~$0.60/mcfe Significant unbooked
resource potential
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 23
Nora Field – Multiple Horizon Potential
1,100' - 2,500'
4,000' - 5,000'
5,000' - 6,000'
12,000'
EXPLORATIONPOTENTIAL
Depth in feet
CBM
TIGHT GASSANDS
DEVONIANSHALE
SILURIAN /ORDOVICIAN
CBM
Tight GasSands
HuronShale
Silurian /Ordovician
Unbooked ResourcePotential (Tcfe)
.4 – .6
.1 – .2
.8 – 1.5
Total 1.3 – 2.3
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 24
Nora CBM Well Economics
Southwest Virginia
EUR – 350 Mmcf
Capital – $340K
F&D – $0.88/mcfe At $5.00 flat NYMEX
generates 33% rate of return0%
10%20%30%40%50%60%70%80%
$4.00 $5.00 $6.00 $7.00
Gas Price, $/mmbtu NYMEX
IRR
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 25
Marcellus – Largest Potential of all the Shales
ALL Consulting, 2008 – Estimated U.S. shale gas-in-place resources
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 26
Making the Marcellus Real – Score Card
Drilled more horizontal wells in the play than any other operator
Recorded terrific well results
– Record IP for horizontal well- 24.5 Mmcfed
– Record IP for vertical well- 6.3 Mmcfed
Well results have improved
– Last 10 horizontal wells brought online in 2008 had an average IP of 7.3 Mmcfed
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 27
Marcellus Shale Terrain – SW Pennsylvania
Sparsely populatedGently rolling hillsGood road accessGood water access
Excellent Area for Development
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 28
Marcellus Shale Well Economics
Southwestern Pennsylvania – wet gas case
EUR – 3.5 Bcfe
Capital $3.5MM
F&D – $1.16/mcfe NYMEX Price/Rate of return (1)
0%10%20%30%40%50%60%70%80%
$4.00 $5.00 $6.00 $7.00
Gas Price, $/mmbtu NYMEX
IRR
$4.00 - 34%$5.00 - 46%$6.00 - 60%$7.00 - 75%
(1) Includes gathering, pipeline and processing costs
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 29
Marcellus Economics are “Best of Class”
Low Finding Costs
Best Wellhead Gas Price
Attractive Lease Terms
$1.16 per Mcfe
Positive basis differentials
Low royalties and longer term leases
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 30
“Pennsylvania looks like a hell of a play … it has tremendous potential”
George Mitchell, Founder of the Barnett Shale
“The Marcellus Shale may ultimately become the largest natural gas field in the U.S.”
Chesapeake Energy
“…… Marcellus ends up being the best rate of return.”
XTO Energy
“..the Marcellus appears to have the lowest breakeven costs of any of the major U.S. Shale plays.”
Simmons & Co. International
Marcellus Shale – What Others are Saying
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 31
Making it Real for Range’s Shareholders
We estimate our current Marcellus position has 22 Tcf of unrisked resource potential (8 times our current proved reserves)
Our goal for 2009 is to more than double Range’s net production from the Marcellus
Our goal for 2010 is to double production again
As the leader in the Marcellus, we are extremely well-positioned to drive up production and
reserves at low cost for many years to come
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 32
Proven Track Record– Consistent in growing reserves and production– Disciplined low cost producer– Focused on growing per share value
Transparent, Low Risk Growth Profile– Stable, long life reserve base– Large drilling inventory of low cost projects
Strong Financial Position– Simple balance sheet with no debt maturities until 2012– Significant liquidity and bank credit capacity
Substantial Upside Potential– Resource potential is 8 to 10 times current proved reserves– Multiple plays provide multiple ways to win– Economics work in a low price environment
Why Own Range in the Current Environment?
RANGE ResourcesRange Resources Hart Energy: Energy Capital Investment Symposium | June 3, 2009 | 33
Statements concerning future capital expenditures, production volumes, reserve volumes, reserve values, resource potential, number of development and exploration projects, finding costs, operating costs, overhead costs, cash flow and earnings are forward-looking statements. These statements are based on assumptions concerning commodity prices, recompletions and drilling results, lease operating expenses, administrative expenses, interest and other financing costs that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are both subject to a wide range of business risks and there is no assurance that these results, goals and projections can or will be met.
This presentation includes certain non-GAAP financial measures. Reconciliation and calculation schedules for the non-GAAP financial measures can be found on our website at www.rangeresources.com.
The SEC has generally permitted oil and gas companies, in their filings made with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation test to be economically and legally producible under existing economic and operating conditions. We use the terms “resource”, “potential” or “upside” or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC’s guidelines may prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the company.
Forward-Looking Statements
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