Range Resources Corporation ( RRC Quick Quote RRC - Free Report) reported first-quarter 2021 adjusted earnings of 30 cents per share, which beat the Zacks Consensus Estimate of 22 cents. Moreover, the bottom line surged from 4 cents per share in the prior-year quarter.
Total revenues for the reported quarter were $626 million, surpassing the Zacks Consensus Estimate of $566 million. However, the top line deteriorated from the prior-year number of $693.9 million.
The strong quarterly earnings can be attributed to increased commodity prices and decreased direct operating costs. This was partially offset by lower production volumes.
For first-quarter 2021, the company’s production averaged 2,081.5 million cubic feet equivalent per day, down 9% from the prior-year period. Natural gas contributed 69.6% to total production, while NGLs and oil accounted for the remaining.
Oil and NGL production fell 12% and 8%, respectively, on a year-over-year basis. Moreover, natural gas production decreased 10% from the prior-year quarter.
Its total price realization (excluding derivative settlements and before third-party transportation costs) averaged $3.22 per thousand cubic feet equivalent (Mcfe), up 56% year over year. Natural gas prices rose 48% on a year-over-year basis to $2.58 per Mcf. Moreover, NGL and oil prices increased 77% and 19%, respectively.
Costs & Expenses
Total costs and expenses rose to $596.2 million from $498.7 million in the year-ago quarter. Total exploration costs declined to $5.2 million from $6.7 million a year ago.
On a per unit basis, direct operating costs contracted to 9 cents per Mcfe from the year-ago figure of 15 cents. However, transportation, gathering, processing and compression expenses were recorded at $1.46 per Mcfe, higher than $1.36 in the prior-year quarter.
Capital Expenditure & Balance Sheet
The company’s drilling and completion expenditure totaled $97.1 million for first-quarter 2021. Moreover, $6.4 million was used in acreage leasehold, while $1.9 million was utilized in gathering.
At first quarter-end, it had total debt of $3,055.2 million, with a debt to capitalization of 64.7%.
For 2021, Range Resources reiterated its production guidance at an average of 2.15 Bcfe per day, with 30% allocated to liquids production. Moreover, the company’s overall capital budget is expected to be $425 million.
Notably, exploration expense for 2021 is estimated to be $20-$28 million. On a per-unit basis, direct operating expenses for the year are expected within 9-11 cents per Mcfe. Transport, gathering, processing and compression expenses are estimated in the range of $1.35-$1.40 per Mcfe.
As of Apr 16, the company had around 70% of its 2021 remaining production volume hedged at a floor price of $2.60 per million British thermal units and ceiling price of $2.79. Similarly, it hedged 70% of crude production at $52 per barrel.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include
CrossAmerica Partners LP ( CAPL Quick Quote CAPL - Free Report) , Frank's International N.V. ( FI Quick Quote FI - Free Report) and Holly Energy Partners, L.P. ( HEP Quick Quote HEP - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
CrossAmerica’s bottom line for first-quarter 2021 is expected to surge 166.7% year over year.
Frank's International’s bottom line for 2021 is expected to rise 46.7% year over year.
Holly Energy’s bottom line for 2021 is expected to jump 26.1% year over year.
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