Texas-based Range Resources Corporation ( RRC - Analyst Report ) has begun spudding the Horizontal Mississippian play along the Nemaha Ridge in Oklahoma and Kansas prior to its first-quarter 2013 schedule.

The proposed five-rig drilling program is generating results above expectations. The drilling site along the Nemaha Ridge is possibly the most lucrative.

Range revealed that each of the two new wells with 24-hour initial production rates to sales generated more than 1,000 barrels of oil equivalent per day (Boe/d), with liquids averaging 82%.

So far this year, Range has completed drilling 18 horizontal wells, including four wells with initial 24-hour production rates to sales greater than 1,000 Boe/d, averaging 83% liquids.

The updated projection continues to match Range’s estimated ultimate recovery of 600 thousand barrels of oil equivalent for the greater than 3,500 foot lateral well design.

Range has gathered a net acreage of 157,000 in the core area of Nemaha Ridge. The geological characteristics have shown exceptional results previously.

Range expects the Horizontal Mississippian play to be a high return, low-cost liquids play that is likely to be a right fit to its Marcellus Shale play in Pennsylvania.

Range Resources also holds one of the highest risked unbooked resource-to-proved reserves ratios in the industry. This symbolizes a long-term visibility of its growth profile, highlighting the depth of its inventory. Moreover, its large, concentrated holdings in the Horizontal Mississippian play will accentuate its growth prospects and be value accretive for its shareholders.

Range, which recently became the anchor shipper on the Mariner East Project –– a venture between Sunoco Logistics Partners L.P. ( SXL - Analyst Report ) and MarkWest Energy Partners, L.P. ( MWE - Analyst Report ) –– retains a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation.