Independent oil and gas company, Range Resources Corporation RRC announced that it will redeem $500 million of the outstanding principal of its 6.75% Senior Subordinated Notes due 2020 at a price of 103.375% of the unpaid principal amount plus accrued interest. The notes will be redeemed on Aug 3, 2015.
At the end of the first quarter, long-term debt was $3,262.0 million, representing a debt-to-capitalization ratio of 48.3%.
Range Resources is a leading independent oil and natural gas producer with operations concentrated on 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.
Given its dominance in the Marcellus Shale play and its continuous endeavor to control costs, we believe that Range Resources will be capable of long-term shareholder value creation. This, in turn, is likely to enhance earnings during the upcoming second quarter.
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 Transmontaigne Partners L.P. TLP, LRR Energy, L.P. LRE and Pembina Pipeline Corporation PBA. All these have a better Zacks Rank of 1 (Strong Buy).
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