Range Resources Corporation RRC has provided a glimpse of its 2018 capital budget, having stipulated a sum of $941 million for the year. The upstream energy player has also announced details of its proved reserves.
Capital Budget for 2018
Although the expected capital spending for 2018 is less than the company’s 2017 expenditure of roughly $1.27 billion, yet this year’s spend will be lower than the projected cashflow for 2018 considering the present strip prices. Notably, the 2018 capital budget will likely reward Range Resources with 11% production growth from the year-ago period.
Investors should know that for operations in the natural gas-rich Marcellus shale play, Range Resources has decided to allocate roughly 80% of its 2018 budget. For supporting the spending plan, the firm has further strengthened its hedge position. At an average price of $3.09, the company’s 70% of anticipated natural gas production for 2018 has been hedged. The company added that if any additional cashflow got realized this year, out of higher commodity prices realizations or non-core asset divestments, will be allocated for reducing debt load.
Better-Than-Expected 2017 Spending: Range Resources announced that its 2017 actual capital spending was 10% higher than $1.15 billion of spending earlier planned. Higher capital spent on Marcellus program as well as expansion projects in North Louisiana attributed to better-than-expected spending.
Future Projection
Over a period of five years, Range Resources has been expecting a compound annual growth rate of production at roughly 13%. Also, the cumulative free cash flow over the same time span will likely be recorded at $1 billion, considering strip pricing.
The company also anticipates its debt structure to improve. Excluding its divestment of assets, Range Resources projects its debt-to-EBITDAX ratio below 2x.
Higher Proved Reserves
As of Dec 31, 2017, the company’s proved reserves came in at 15.3 trillion cubic feet equivalent (Tcfe), higher by 26%.
The firm also estimates its fourth-quarter 2017 production at 2.17 Bcfe (billion cubic feet equivalent) per day, in line with its expectations.
About the Company
Headquartered in Fort Worth, TX, Range Resources is primarily involved in exploring prospective resources for natural gas and crude.
The company’s pricing chart is not impressive. The stock has lost more than 50% over the past year, underperforming the industry’s10.1% decline.
Range Resources Corporation Price
Range Resources Corporation Price | Range Resources Corporation Quote
Zacks Rank & Stocks to Consider
Range Resources carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are EOG Resources, Inc. EOG, Cabot Oil & Gas Corporation COG and Matador Resources Company MTDR, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Houston, TX, EOG Resources is a leading upstream energy player. We expect the company to see earnings growth of 157.2% and 206.9% in 2017 and 2018, respectively.
Houston, TX-based Cabot is involved in exploration of oil and gas. The stock will likely report earnings growth of 357.1% in 2017.
Matador Resources, headquartered in Dallas, TX, is a leading upstream firm with operations in the prospective Eagle Ford shale play. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters with an average positive surprise of 34.7%.
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