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Range Resources (RRC) Q2 Earnings In Line, Budget Intact
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Range Resources Corporation (RRC - Free Report) reported second-quarter 2021 adjusted earnings of 24 cents per share, in line with the Zacks Consensus Estimate. The bottom line significantly improved from a loss of 10 cents per share in the prior-year quarter.
Total revenues for the reported quarter were $434.7 million, missing the Zacks Consensus Estimate of $573 million. However, the top line improved from the prior-year number of $376.5 million.
The bottom line was supported by a massive increase in commodity prices, and decreased exploration costs as well as direct operating expenses. This was partially offset by lower production volumes.
Range Resources Corporation Price, Consensus and EPS Surprise
For second-quarter 2021, the company’s production averaged 2,104.1 million cubic feet equivalent per day, down 10% from the prior-year period. Natural gas contributed 68.9% to total production, while NGLs and oil accounted for the remaining.
Oil production increased 8% for the quarter from the year-ago period, while NGL and natural gas output decreased 6% and 13%, respectively.
Its total price realization (excluding derivative settlements and before third-party transportation costs) averaged $3.25 per thousand cubic feet equivalent (Mcfe), up 99% year over year. Natural gas prices rose 72% on a year-over-year basis to $2.44 per Mcf. NGL and oil prices also increased 118% and 289%, respectively.
Costs & Expenses
Total costs and expenses rose to $592.5 million from $566.4 million in the year-ago quarter. Total transportation, gathering, processing and compression costs as well as general and administrative expenses increased in the quarter. The rise in costs was offset by lower exploration costs and direct operating expenses.
On a per unit basis, direct operating costs contracted to 10 cents per Mcfe from the year-ago figure of 11 cents. However, transportation, gathering, processing and compression expenses were recorded at $1.48 per Mcfe, higher than $1.30 in the prior-year quarter.
Capital Expenditure & Balance Sheet
The company’s drilling and completion expenditure totaled $115.7 million for second-quarter 2021. Moreover, $4.5 million was used in acreage leasehold, gathering and others.
At second quarter-end, it had total debt of $3,036.7 million, down from $3,055.2 million at first quarter-end. It had a debt to capitalization of 66.6%. The company has around $750 million in senior notes, expected to mature through 2023. At second quarter-end, it had more than $1.9 billion borrowing capacity.
Outlook
For 2021, Range Resources reiterated its production guidance at an average of 2.15 Bcfe per day, with 30% allocated to liquids production. The company’s overall capital budget is expected to be $425 million.
Exploration expense for 2021 is estimated within $20-$25 million, down from the previous limit of $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 now estimated in the range of $1.43-$1.47 per Mcfe, higher than previous range of $1.35-$1.40 per Mcfe.
As of Jul 16, the company had more than 75% of second-half 2021 remaining production volume hedged.
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Range Resources (RRC) Q2 Earnings In Line, Budget Intact
Range Resources Corporation (RRC - Free Report) reported second-quarter 2021 adjusted earnings of 24 cents per share, in line with the Zacks Consensus Estimate. The bottom line significantly improved from a loss of 10 cents per share in the prior-year quarter.
Total revenues for the reported quarter were $434.7 million, missing the Zacks Consensus Estimate of $573 million. However, the top line improved from the prior-year number of $376.5 million.
The bottom line was supported by a massive increase in commodity prices, and decreased exploration costs as well as direct operating expenses. This was partially offset by lower production volumes.
Range Resources Corporation Price, Consensus and EPS Surprise
Range Resources Corporation price-consensus-eps-surprise-chart | Range Resources Corporation Quote
Operational Performance
For second-quarter 2021, the company’s production averaged 2,104.1 million cubic feet equivalent per day, down 10% from the prior-year period. Natural gas contributed 68.9% to total production, while NGLs and oil accounted for the remaining.
Oil production increased 8% for the quarter from the year-ago period, while NGL and natural gas output decreased 6% and 13%, respectively.
Its total price realization (excluding derivative settlements and before third-party transportation costs) averaged $3.25 per thousand cubic feet equivalent (Mcfe), up 99% year over year. Natural gas prices rose 72% on a year-over-year basis to $2.44 per Mcf. NGL and oil prices also increased 118% and 289%, respectively.
Costs & Expenses
Total costs and expenses rose to $592.5 million from $566.4 million in the year-ago quarter. Total transportation, gathering, processing and compression costs as well as general and administrative expenses increased in the quarter. The rise in costs was offset by lower exploration costs and direct operating expenses.
On a per unit basis, direct operating costs contracted to 10 cents per Mcfe from the year-ago figure of 11 cents. However, transportation, gathering, processing and compression expenses were recorded at $1.48 per Mcfe, higher than $1.30 in the prior-year quarter.
Capital Expenditure & Balance Sheet
The company’s drilling and completion expenditure totaled $115.7 million for second-quarter 2021. Moreover, $4.5 million was used in acreage leasehold, gathering and others.
At second quarter-end, it had total debt of $3,036.7 million, down from $3,055.2 million at first quarter-end. It had a debt to capitalization of 66.6%. The company has around $750 million in senior notes, expected to mature through 2023. At second quarter-end, it had more than $1.9 billion borrowing capacity.
Outlook
For 2021, Range Resources reiterated its production guidance at an average of 2.15 Bcfe per day, with 30% allocated to liquids production. The company’s overall capital budget is expected to be $425 million.
Exploration expense for 2021 is estimated within $20-$25 million, down from the previous limit of $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 now estimated in the range of $1.43-$1.47 per Mcfe, higher than previous range of $1.35-$1.40 per Mcfe.
As of Jul 16, the company had more than 75% of second-half 2021 remaining production volume hedged.
Zacks Rank & Other Stocks to Consider
The company currently has a Zacks Rank #2 (Buy). Other top-ranked stocks from the energy space include NexTier Oilfield Solutions Inc. , Southwestern Energy Company (SWN - Free Report) and W&T Offshore, Inc. (WTI - Free Report) , each having a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NexTier’s bottom line for 2021 is expected to rise 46.5% year over year.
Southwestern’s profits for 2021 are expected to jump 197.4% year over year.
W&T Offshore’s bottom line for 2021 is expected to surge 387.5% year over year.