Independent oil and gas company, Range Resources Corporation (RRC) revised its capital budget and production growth outlook for 2015. The company lowered its capital spending budget to $870 million from $1.3 billion budgeted earlier, to cope with the relentless fall in oil prices.
Also. the company now targets 20% year-over-year production growth for 2015 instead of 20% to 25% projected earlier.
For 2014, Range Resources expects total production growth of about 24% with estimated production of 1.16 billion cubic feet equivalent (Bcfe) per day. Fourth-quarter production volumes are projected at about 1.27 Bcfe per day, with 31% liquids.
Range also announced a multi-year contract to sell ethane of 5,000 barrels per day, representing half of its existing committed transportation volume, through the ATEX pipeline.
Range Resources is a leading independent oil and natural gas producer with operations concentrated in Appalachia and the southwest region of the U.S. The company pursues an organic growth strategy targeting high return, low-cost projects within its large inventory of low-risk, development-drilling opportunities.
The company has a track of double-digit production growth while reducing its finding and development costs and sustaining an industry leading low-cost structure. This can be attributed to increased production from the low-cost Marcellus region.
However, with the majority of Range Resources’ reserves tilted toward natural gas, the company’s results are vulnerable to fluctuations in the natural gas markets. Earlier, the anemic gas price environment had compelled the company to reduce its exposure to natural gas drilling.
Range Resources’ currently carries a Zacks Rank #4 (Sell). Investors interested in the oil and gas sector could try out stocks like Spectra Energy Partners, LP (SEP), Seadrill Partners LLC (SDLP) and GeoPark Limited (GPRK). All these have a better Zacks Rank of 1 (Strong Buy).
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