Nice! New record for authorized shares?
On July 22, 2014 the Company increased the number of authorized shares of common stock to 4,000,000,000.
Go for it you RISK TAKERS!
Are you a risk taker or a care giver....Owning stocks that are solid, is a great bet.
Owning a stock that makes no money, no captail, over a billion out standing shares...
really dumb idea...Here is this start up company symbol DOMK and trades for 1/100 of a penny.
The only reason I bring this one up is they just launched Simbadeals...in the US and Canada,
not a bad looking site. It has over 155 major big name retailors. It has jumped up 500000 in ranking in just 4 days. With Christmas coming...im sure this tiny stock will make a run...
maybe a tiny run or maybe, well you....Now ask yourself are you a Risk Taker or a Care Giver
You seem like a good guy with intelligent comments. I was commenting on the Marcellus acreage sweat spots. No doubt the Utica adds another dimension and the EIA now classifies it as a different field, although there is significant overlap. RRC is well positioned to capitalize on both the Marcellus and Utica and has excellent acreage in the sweat spots.
If you don't believe the Texas Study, you might want to read a study called "Drilling Deeper" by David Hughes. It comes to a similar conclusion. Then there is Bill Powers and Art Berman that have also studied the Shale Fields. Powers is a bit of a nutcase trying to sell his book "Cold Hungry And In The Dark" but Berman seem rational enough. Powers was way off on the Marcellus, as were many others, but I think Powers isn't too far off the mark.
Gas & Oil production will likely increase over the next year or two, but it gets real sketchy after that, particularly if Oil stays low. Regarding all of the 10's of Billions for Midstream and Downstream getting invested, things don't always pan out the way you plan. The utilities will likely be able to pass on any cost overruns to the consumers, not necessarily so with the Pipeline companies. Ask OXY how they like the Century Plant midstream deal they have with SD. OXY was planning on processing 650mmcfd of gas out in the WTO, they are receiving less than 100mmcfd, though SD is having to pay a penalty and may go BK in a few years if Oil and NG prices don't pick up - in such case OXY gets stuck for the Billion they sunk into the Century Plant.
The same goes for the pipeline companies, they get commitments from the upstream companies for takeaway, but if the producers go BK, the product won't get delivered. There are penalties for under delivery in all of these contracts, but if CAPEX dries up and fields go into decline the pipeline companies get hammered as well as a result of the bankruptcies or restructuring. The LNG guys are in better shape, they are getting commitments from the Asians and to a lessor extent the Europeans to offload the commodity at HH plus 15% markup for processing. The companies buying the LNG are responsible for sourcing and buying the product. But the source may not be there for the next 10 to 20 years and you could see force majeure with our government intervening on LNG exports in order to insure domestic supplies.
In less than a decade the EIA has said that we would definitely have to be importing LNG to now saying we can export 5 or 10bcfd without anything to worry about, and that is in addition to an increase in NG exports to Mexico of around 4bcfd which are already ramping up hard.
Regarding your question as to why I get more character space than others: there are two ways that you get this on Yahoo from what I understand:
1. You are recognized as an expert in the Industry. As a widely self acclaimed NG expert, I obviously qualify :).
2. If you get tons of thumbs up, you get more space, I definitely qualify in this regard as well, though not so much on the RRC board as I don't post that much here. Trolls get limited space and are eventually eliminated if the thumbs downs and abuse reports get too high.
I'll get into a discussion with you on the most mature shale gas field and the one that started it all called The Barnett Shale, its sweat spots are pretty well drilled out and its in decline. Same goes for the Haynessville. Marcellus and Utica still have a ways to go.
Not necessary disagreeing with you that the EIA appears to be behind at times, and we can guess many reasons why. I could mention one that may surprise you, but I won't.
One problem with the so-call high resolution is it only notes the Marcellus formation, there are others above and below. Having that said, not all of the Marcellus has the best production. But on the other hand, we see just within the past year newer techniques at lower cost resulting in better producing wells. Pretty evident with RRC for one. The newer techniques could totally blow out your 15% figure, and in fact expand not only the current sweet-spot area, but expand them. We see this happening with RRC's Southern App. operations, and it's way early in the game. Your CAPEX is comment is dismissed, e.g., RRC growing 20-25% at 18% less.
Another consideration is the takeaway build out. There is no way in hell E&P is going to commit multiple years for pipeline takeaway commitments, which in turn is costing billions for a pipeline company to build. In addition, you must note the dollars being spent to upgrade and build new processing facilities by home and international companies for long-term production of NGLs and light crude is unprecedented. These projects are intended for the long-term, not 5 years. It will take from now, 3-4 years to get some of them up and running.
Production declines I would argue could be at least for one reason, winter is coming. Work typically slows down. E&P is also currently switching up drilling and completion techniques.
Many import facilities were "planned". The few that were built will now be export, e.g., Cove Point, so there is a good rate of return for those projects.
Finally like it or not, inefficiencies in fuel usage and alternatives to some extent are hear to stay and will offset any dramatic over or under balance.
One question for ya, how do you get to post so many more characters per message when everyone else appears to be limited? Just asking.
Well, I really do not want a buy out. They have their own destiny, I hope they realize that and stay independent.
Second my many years of investing I had many good outfits to invest in and they were bought out, it tough sometimes to replace them with an equivalent story.
There were pertinent remarks in their latest release, especially about cutting the budget in 2015 about ten percent while raising production about 20-25 percent. They are also hedged nicely for seventy percent of the 20 percent of the oil that is in their portfolio and about the same amount of their natural gas is hedged at 4.13. They are producing like gangbusters and making money unlike other producers and shipping cheaper and even cutting costs of shipping.
Seems to me the valuation gap vs the current stock price would be near impossible to bridge for this size market cap. Hard to imagine anyone paying a 40% premium and RRC accepting less at this point in the price cycle with declining capital needs and forthcoming positive cash flow. I just don't see how you put it together.
I'm sure for the right price but I would have to pay full price. Today TLM got bought for about the value of 3P reserves, a price that seemed high with 4.7 B in debt, weak energy prices and a portfolio that is too diverse. They don't have the growth rate or asset base of RRC. I prefer RRC as a stand alone company-they are just starting to reap the benefit from 10 years of capital spending in the Marcellus, and I'd like to see what what happens when they start generating a lot of free cash. Have to figure a company with such potential is a candidate for purchase. If I was Berkshire I'd unload IBM and Coke and take a look here.
to your point, I wonder if Pinkerton stepping down as board chairman reflects a change in strategic outlook.
Thought you were being conservative. The more I look at RRC I think a take out is more likely. Like you said, how many drillers can cut capex 29% and grow at 20-25% and now you have to factor in the Utica . RBC noted "the highest rate yet announced in the Utica play" in southwestern Pennsylvania. As such, the investment bank is increasing its net-asset value on RRC to $100/share from $88 and stock- price target a buck to $78. Imperial Capital notes the Utica well "could lead to making RRC the largest dry gas Utica acreage holder in the US in this potentially very-large play."
My guess was conservative. My so-called whisper numbers I will not mention. Believe the driller had some problems early on in the drilling process. I believe the proposed lateral was longer than 5,240’. But that’s ok as I noted before, “We have good rock, good teams, and perhaps a decent reserve potential upgrade across the acreage.”
The report confirms a great company effort as the results “confirms its [that is RRC’s] geological interpretation”. As time goes on, production curves will be drafted and we’ll have a clearer picture of how much potential we have in SW PA Utica/PP.
Now the second and perhaps even better kicker is the 18% reduction in CAPEX, yet maintaining guidance of 20 - 20% compounded growth for 2015. As you and I know, stacked-play and revisiting existing well pads for new wells, using better targeting and well completion techniques as opposed to the wells drilled 4 - 6 years ago, and having the infrastructure in place saving at or about 800,000 per new well today, is a testament that we have great management and teams on the ground.
As I noted in the past years, we have tremendous intrinsic value. One reason the company’s barrowing base was raised to 4 billion.
Were the stock price goes, who in the hell knows. But in time, IMO, we are going to have a coil-effect to the upside as the company fundamentals and growth and balance sheet could not be better in a stupid sell-off market mentality.
For those who don't receive. Weitz Partners recommends based on: 1)low costs and making money at current prices 2)production growth, 3) potential pipeline expansions 4)net asset value of $125/share 5) demand growth kicker. Nothing new but nice to read.
You're completely wrong. It's a decade alreadt valuation is dictated by EV/EBITDA. You can disagree but that's it.
almost all the companies in the world , regardless whatever they make, are evaluated by p/e. Only thing ever evaluated by edib=da is for aol. We all know what has happened to aol and other internet companies!
Your guess was a bit light-Utica came in at 59mmcf/d, a monster well with 400K acres. Hope investors are doing the math, huge impact on future reserves.
The "High Resolution" of the Texas study is done on a Section by Section basis. A section is 1 square mile and contains 640 acres. The EIA numbers encompass entire counties in Pennsylvania and other states which consist of hundreds of thousands of acres. The Texas study is much more accurate and looks at sweet spots.
Here are the sweet spot counties in Pennsylvania which is the heart of the Marcellus and is the driving force in NG supply growth:
Susquehanna 832 sq miles - 532,000 acres
Bradford 1,161 sq miles - 743,000 acres
Lycoming 1,244 sq miles - 797,160 acres
Wyoming 405 sq miles - 259,200 acres
Around 2,300,000 acres in the sweet spots in the dry play.
The Wet Area consists of:
Fayette 798 Sq miles - 510,720 acres
Greene 579 sq miles - 370,560 acres
Washington 861 Sq miles - 551,040 acres.
Westmoreland 1036 sq miles - 663,040 acres.
Around 2,100,000 acres in the wet area.
Total area in the sweet spot is 4,400,000 acres.
Pennsylvania contains 46,055 sq miles or 29,475,200 acres. Less than 15% of that acreage is in the sweet spot counties and not all the acreage in those counties is that great.
Drilling under and in cities and Lakes is very expensive. Many cities ban fracking. The State of New York totally bans it. The EIA extrapolates data from the sweet spots and applies it across all of the play acreage. This is not a good way to calculate things. The EIA blew their Monterey Shale call by 96%, they are way off on shale reserves in the Marcellus and other major fields. Haynessville, Barnett, Fayettville are already in decline. Bakken production declined in October. Drilling permits where down 50% in November in Texas. Eagle Ford production may peak as early as next year.
The EIA are idiots if they think Shale Gas production is going to grow for decades at low prices, particularly so if Oil prices stay depressed and associated gas production dries up.
Few other than the EIA see production growing in the Marcellus after 2020. Ironically, the EIA website on production and legacy well decline figures confirms this. Without a significant ramp up in CAPEX, it appears likely that Marcellus production may peak as early as 2016/2017 as the production decline overtakes new well production. This at a time when demand for NG is building significantly through Coal Plant Retirements, Industry use, Gas to Liquid Plants, and growth in the transport sector. And of course LNG exports are on the way as well as NG exports to Mexico growing significantly. Exports to Canada will also grow.
Back in 2005 the EIA was forecasting that the USA would have to import large quantities of LNG, Billions where spent on LNG import facilities, then came the shale gas revolution and now the EIA thinks we will be awash in cheap plentiful NG for decades and have no need to worry that exporting LNG will strain US supplies and move the price of NG up enormously.
NG supply still outstrips demand and will keep a lid on prices at least thru the first half of 2015. Looking to 2016 forward this will no longer be the case. All JMHO, do your own DD.
I think the post by fastball 98 is a better metric. Most analysts use EV/EBITDA rather than PE as it removes the effect of non cash transactions i.e depreciation, and allows more focus on cash flow, and allows for a better comparison of companies. I calculate a PE of about 24 if you use Sept 14 earnings of $2.27 per share. Today RRC EV/EBITDA is about 9.25 so its share price is about 5.5x, for comparison in June 2013 it was 13.6 x when the share price was about 78. Morningstar projects a16.4 ratio for 2015 using their model which gets you over $90 per share. They are growing production at 20-25% a year, a rate that results in doubling every 3-4 years, with unproved resources 8-10 x proved reserves, and they have only drilled abut 8% of locations. These reserve numbers are about to get substantially greater with the Utica play, 400,000 acres not factored into RRC value. So I disagree that RRC is overvalued. This is an opportunity to acquire a company down 40% off its high price. RRC has spent 10 years and billions of dollars after discovering and developing to the Marcellus. Why would you sell shares now when they have reached the point where essentially all of their acreage is now prospective, they will start generating significant amounts of free cash flow in 2016, and have less risk and more opportunity than at any time in the past. Don't allow yourself to get manipulated by funds that had big positions in over levered oil drillers, now forced to liquidate due to high yield financing. I agree with Fastball, $95 is a reasonable 2015 share price but I think it would take more than that to get a deal done. After 2015 it grows even faster with the free cash, the increased demand for nat gas and RRC ability to obtain pricing in numerous markets. BTW-RRC is on its way to becoming investment grade.
They have a slide that shows debt adjusted reserves per share of 47Mcfe. This was based on year end 2013 reserves and share count. Assuming 20% reserve growth, slightly lower total debt, and over 165mil shares, the market is valuing Ranges' reserves at about $1 per Mcfe. At the base of $1 after the cost of lifting and tax's, and given liquids rich uplift the net-back has to be close to $2/Mcfe, A major or mid-major has an extremely low base to attempt an offer, and capture Ranges' vast resource base for next to nothing. I think an offer at the 52 week high ($95) could get a deal done.
Yet, debt is at 3 billions, and it is like 10 years of net profit. The company has had to dig more and more gas just to maintain the same EPS over the last 3 years. Wall Street is at sleep to allow RRC to be trading at p/e 40 for such weak fundementals.
This stock is overvalued at least by 60%. It should be traded at $15 per share at most!