Range Resources Corporation (RRC) will sell ethane from its Marcellus Shale operations in southwestern Pennsylvania to Canada-based NOVA Chemicals Corporation. This marks Range Resources’ first ethane contract from the region.
Per the deal terms, Range will transport ethane to NOVA through Mariner West Project –– a Marcellus Shale ethane pipeline venture between pipeline operators MarkWest Energy Partners L.P. (MWE) and Sunoco Logistics Partners L.P. (SXL). The ethane will be shipped from MarkWest’s processing and fractionation plant in southwest Pennsylvania to the international border near Marysville, Michigan for further delivery into the Sarnia, Ontario petrochemical market.
The deal calls for initial ethane deliveries to begin in late 2013 with full delivery starting in early 2014. Range remains optimistic on its first ethane-supply contract, which will serve the needs of the North American petrochemical industry. This will also help the company to speed-up its development activities in the liquid-rich region of Marcellus Shale.
Given Range’s dominance in the Marcellus Shale play, we believe that its large acreage will support several years of oil and gas drilling in fast-growing fields. Range also remains enthusiastic about potential sales agreements throughout North America, the United Kingdom and Europe that will create significant employment opportunities across Pennsylvania and in the neighboring states.
Based in Fort Worth, Texas, Range Resources is an independent oil and gas company, engaging in exploration, development and acquisition of oil and gas properties primarily in the southwestern, Appalachian and Gulf Coast regions of the United States. In a low natural gas price environment, the company’s record production and declining unit costs, along with the sale of non-core properties, will prove beneficial over time. We also remain upbeat regarding Range Resources’ reserve growth and its potential to sustain high productivity in the second half of 2011.
The company holds a Zacks #1 Rank, which is equivalent to a short-term Strong Buy rating.
MARKWEST EGY PT (MWE): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
SUNOCO LOGISTIC (SXL): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment