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Range Resources (RRC) Loss Narrower Than Expected in Q3

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Range Resources Corp.’s (RRC - Free Report) third-quarter 2016 adjusted loss came in at 23 cents a share, narrower than the Zacks Consensus Estimate of loss of 27 cents. The company had reported loss of 5 cents a share in the year-earlier quarter.

Total revenue of $413.2 million beat the Zacks Consensus Estimate of $345.3 million. However, the top line declined 14% year over year from $480 million.

Operational Performance

The company’s third-quarter production averaged almost 1,508 million cubic feet equivalent per day (MMcfe/d). Natural gas made up for 67% of the total production, while natural gas liquids (NGLs) and oil accounted for the remaining 33%. Total production volume improved 4% from the year-earlier quarter due to the company’s highly successful drilling program.

On a year-over-year basis, oil production decreased 15%, whereas NGL rose 35%. Natural gas production decreased 4% year over year.

The company’s total price realization (including the effects of hedges and derivative settlements) averaged $1.58 per Mcfe, down 28% year over year. Of this, NGL prices decreased 7% to $6.60 per barrel, crude oil prices were down 34% to $49.97 per barrel and natural gas prices plunged 24% to $1.43 per Mcf, all on a year-over-year basis.
 

RANGE RESOURCES Price, Consensus and EPS Surprise

 

RANGE RESOURCES Price, Consensus and EPS Surprise | RANGE RESOURCES Quote

Financials

At the end of the quarter, long-term debt was approximately $3,826.7 million. The company incurred drilling expenditures of $90 million in the third quarter to drill 39 wells. In addition, $7.4 million was spent for acreage purchases, $6.3 million as exploration expense, and $0.3 million on gas gathering systems, during the quarter.

Guidance

For the fourth quarter, the company estimates production of 1.850 billion cubic feet equivalent (Bcfe) per day, with liquid comprising 31–33%.

For 2016, the company has reaffirmed its production guidance at the upper end of its earlier projection. Production is expected in the range of 1,410–1,420 MMcfe/d after completion of all asset sales. Capital budget for the year is $495 million.

Zacks Rank & Stocks to Consider

Currently, Range Resources carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Enviva Partners, LP (EVA - Free Report) , Helix Energy Solution Group (HLX - Free Report) and EQT Midstream Partners . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enviva Partners has a mixed earnings surprise history. The partnership posted positive earnings surprise in two of the last four quarters. It reported a positive earnings surprise of 20.51% in the preceding quarter.
 
Helix Energy posted a positive earnings surprise of 150.00% in the preceding quarter. It reported a positive earnings surprise in all of the four preceding quarters.

In the last reported quarter, EQT Midstream Partners delivered a positive earnings surprise of 6.72%. Coming to the earnings surprise history, the partnership beat estimates in three of the last four quarters.

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