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Range Announces Second Quarter 2021 Financial Results

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FORT WORTH, Texas, July 26, 2021 (GLOBE NEWSWIRE) -- RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its second quarter 2021 financial results.

Highlights –

  • Realizations before index hedges of $3.25 per mcfe, or approximately $0.41 above NYMEX natural gas

  • Pre-hedge NGL realization of $27.92 per barrel, highest since 2014

  • NGL differential of $2.24 per barrel above Mont Belvieu

  • Natural gas differentials, including basis hedging, averaged $0.39 per mcf below NYMEX

  • All-in second quarter capital spending was $120 million, approximately 28% of the annual budget

  • Production averaged 2.10 Bcfe per day, approximately 31% liquids

  • Redeemed $63.3 million of senior notes and senior subordinated notes due between 2021 and 2023

  • Reduced total debt outstanding by approximately $66 million

  • Range committed to a pilot project with Project Canary to certify the production of responsibly sourced natural gas (RSG)

Commenting on the quarter, Jeff Ventura, the Company’s CEO said, “Range continues to make progress on key objectives: improving margins with a focus on cost structure, generating free cash flow, and operating safely while maintaining peer-leading capital efficiency. Range generated solid free cash flow for the quarter, investing $120 million in second quarter with corresponding cash flow from operations before changes in working capital of $177 million. Range remains committed to disciplined capital spending and generating sustainable free cash flow and at current strip pricing, we expect Range to rapidly approach our long-term balance sheet targets. We believe Range is differentiated as a result of our low sustaining capital, competitive cost structure, marketing strategies, environmental leadership and importantly, our multi-decade core inventory life, which is an increasingly important competitive advantage.”

Financial Discussion

Except for generally accepted accounting principles (GAAP) reported amounts, specific expense categories exclude non-cash impairments, unrealized mark-to-market adjustment on derivatives, stock-based compensation and other items shown separately on the attached tables. “Unit costs” as used in this release are composed of direct operating, transportation, gathering, processing and compression, production and ad valorem taxes, general and administrative, interest and depletion, depreciation and amortization costs divided by production. See “Non-GAAP Financial Measures” for a definition of each of the non-GAAP financial measures and the tables that reconcile each of the non-GAAP measures to their most directly comparable GAAP financial measure.

Second Quarter 2021

GAAP revenues for second quarter 2021 totaled $435 million, GAAP net cash provided from operating activities (including changes in working capital) was $174 million, and GAAP net earnings was a loss of $156 million ($0.65 per diluted share). Second quarter earnings results include a $250 million derivative fair value loss due to increases in commodity prices.

Non-GAAP revenues for second quarter 2021 totaled $644 million, and cash flow from operations before changes in working capital, a non-GAAP measure, was $177 million. Adjusted net income comparable to analysts’ estimates, a non-GAAP measure, was $59 million ($0.24 per diluted share) in second quarter 2021.

The following table details Range’s average production and realized pricing for second quarter 2021(a):

2Q21 Production & Realized Pricing

Natural Gas
(Mcf)

Oil
(Bbl)

NGLs
(Bbl)

Natural Gas
Equivalent
(Mcfe)

Net Production per day

1,449,307

8,539

100,587

2,104,064

Average index price(b)

$2.84

$65.96

$25.68

Differential

(0.40)

(8.36)

2.24

Basis hedging

0.01

-

-

Realized prices before index hedges

$2.45

$57.60

$27.92

$3.25

Settled index hedges

(0.07)

(15.39)

(2.28)

(0.21)

Average realized prices after hedges

$2.38

$42.21

$ 25.64

$ 3.04

(a) May not add due to rounding
(b) Indexes include NYMEX-Henry Hub, NYMEX-WTI and OPIS-Mont Belvieu for natural gas, oil and NGLs, respectively

Total production for second quarter 2021 averaged approximately 2.10 net Bcfe per day. By area, southwest Marcellus production averaged 2.0 Bcfe per day while the northeast Marcellus assets averaged 77 net Mmcf per day during the quarter.

Second quarter 2021 natural gas, natural gas liquids (NGL) and oil price realizations (including the impact of cash-settled hedges and derivative settlements which correspond to analysts’ estimates) averaged $3.04 per mcfe.

  • The average natural gas price, including the impact of basis hedging, was $2.45 per mcf, or a ($0.39) per mcf differential to NYMEX. The Company’s average 2021 natural gas differential to NYMEX remains within an expected range of ($0.30) to ($0.40) per mcf.

  • Pre-hedge NGL realizations were $27.92 per barrel, an improvement of $1.56 per barrel versus the first quarter of 2021 and a $2.24 premium to the Mont Belvieu equivalent barrel. The Company’s average 2021 premium differential to the Mont Belvieu equivalent barrel remains within an expected range of $0.50 - $2.00 per barrel for 2021.

  • Crude oil and condensate price realizations, before realized hedges, averaged $57.60 per barrel, or $8.36 below WTI (West Texas Intermediate). Range’s estimated condensate differential to WTI during 2021 remains within an expected range of $7-$9 below NYMEX.

The following table details Range’s unit costs per mcfe(a):

Expenses

2Q 2021
($/Mcfe)

2Q 2020
($/Mcfe)

Increase
(Decrease)

Direct operating(a)

$

0.10

$

0.11

(9%)

Transportation, gathering, processing and compression

1.48

1.30

14%

Production and ad valorem taxes

0.04

0.03

33%

General and administrative(a)

0.16

0.13

23%

Interest expense(a)

0.29

0.22

32%

Total cash unit costs(b)

2.07

1.79

15%

Depletion, depreciation and amortization (DD&A)

0.47

0.49

(4%)

Total unit costs plus DD&A(b)

$

2.54

$

2.28

11%

(a) Excludes stock-based compensation, legal settlements and amortization of deferred financing costs.
(b) May not add due to rounding.

Capital Expenditures

Second quarter 2021 drilling and completion expenditures were $115.7 million. In addition, during the quarter, $4.5 million was invested on acreage leasehold, gathering systems and other. Total capital expenditures year to date were $226 million at the end of the second quarter. Range remains on track to spend at or below the total capital budget of $425 million in 2021.

Financial Position

In April 2021, Range redeemed outstanding principal amounts of senior notes due in 2021 and 2022 totaling approximately $26.0 million and senior subordinated notes due in 2021, 2022 and 2023 totaling approximately $37.3 million.

As of June 30, 2021, Range had total debt outstanding of $3.1 billion, consisting of $121 million in bank debt and $2.95 billion in senior notes. The Company has approximately $750 million in senior notes that mature through 2023, which are expected to be retired with projected free cash flow at current strip pricing. Range had over $1.9 billion of borrowing capacity under the bank credit facility commitment amount at the end of the second quarter.

Operational Activity

The table below summarizes estimated activity for 2021 regarding the number of wells to sales for each area.

Wells TIL
2Q 2021

Calendar 2021
Planned TIL

Remaining
2021

SW PA Super-Rich

3

17

8

SW PA Wet

12

18

3

SW PA Dry

10

24

7

Total Wells

25

59

18

NGL Marketing and Transportation

In second quarter, Range began utilizing an additional 5,000 barrels per day of Mariner East capacity to transport NGLs to export markets. Range’s second quarter NGL differential benefitted from a diversified marketing strategy with flexibility in product placement and sales timing. Range’s unhedged realized NGL price for the second quarter was $27.92 per barrel, a $2.24 premium to Mont Belvieu. This represents the highest premium to Mont Belvieu in Company history and, in absolute terms, the highest quarterly NGL price since 2014. As a result of export timing, the second quarter NGL barrel included a higher percentage of propane and heavier products, thereby improving the quarterly differential. During second half 2021 the Company expects strong fundamentals to result in higher absolute prices for domestic propane and butane, compressing arbitrage premiums of U.S. exports. Coupled with a lighter barrel from export timing and seasonality in domestic NGL sales, Range expects lower premiums to Mont Belvieu but improving overall NGL price realizations in a globally competitive price environment. Range’s 2021 premium NGL differential is expected to be within a $0.50 to $2.00 per barrel range for the full year, showing the benefit of a diversified NGL portfolio and access to international markets.

For reference, Range’s forecasted 2021 pre-hedge NGL realization has increased by approximately $7 per barrel since February, resulting in an increase of approximately $250 million in forecasted revenue. As a result of higher NGL prices and the effect of Range’s price-linked processing contracts, Range is increasing guidance for 2021 GP&T expense to $1.43 to $1.47 per mcfe. Net of projected processing costs, Range’s forecasted pre-hedge cash flow from NGL sales in 2021 has increased by approximately $200 million since February. As previously disclosed, Range expects GP&T expense to decline annually in 2022 and beyond based on existing gathering contracts. The reduction in annual gathering expenses relative to 2021 totals approximately $70 million by 2025 and greater than $100 million by 2030.

Guidance – 2021

Capital & Production Guidance

Range’s 2021 all-in capital budget is $425 million. Production for full-year 2021 is expected to average approximately 2.15 Bcfe per day, with ~30% attributed to liquids production.

Full Year 2021 Expense Guidance

Direct operating expense:

$0.09 - $0.11 per mcfe

Transportation, gathering, processing and compression expense:

$1.43 - $1.47 per mcfe

Production tax expense:

$0.02 - $0.04 per mcfe

Exploration expense:

$20.0 - $25.0 million

G&A expense:

$0.15 - $0.16 per mcfe

Interest expense:

$0.26 - $0.28 per mcfe

DD&A expense:

$0.47 - $0.50 per mcfe

Net brokered gas marketing net expense:

$2.0 - $10.0 million

Full Year 2021 Price Guidance

Based on current market indications, Range expects to average the following price differentials for its production in 2021.

Natural Gas:(1)

NYMEX minus $0.30 to $0.40

Natural Gas Liquids (including ethane):(2)

Mont Belvieu plus $0.50 to $2.00 per barrel

Oil/Condensate:

WTI minus $7.00 to $9.00

(1) Including basis hedging
(2) Weighting based on 53% ethane, 27% propane, 7% normal butane, 4% iso-butane and 9% natural gasoline.

Hedging Status

Range hedges portions of its expected future production volumes to increase the predictability of cash flow and to help maintain a strong, flexible financial position. As of July 16, 2021, Range had more than 75% of its expected second half 2021 natural gas and condensate production hedged. Range also had over 35% of its projected second half 2021 net NGL revenue hedged as of July 16th. For details, please see the detailed hedging schedule posted on the Range website under Investor Relations - Financial Information.

Range has also hedged basis for natural gas and NGL volumes to limit volatility between published pricing benchmarks and regional sales prices. The combined fair value of the natural gas basis, NGL freight and spread hedges as of June 30, 2021 was a net gain of $26 million.

Conference Call Information

A conference call to review the financial results is scheduled on Tuesday, July 27 at 9:00 a.m. ET. To participate in the call, please dial (877) 928-8777 and provide conference code 1553208 about 10 minutes prior to the scheduled start time.

A simultaneous webcast of the call may be accessed at www.rangeresources.com. The webcast will be archived for replay on the Company's website until August 27.

Non-GAAP Financial Measures

Adjusted net income comparable to analysts’ estimates as set forth in this release represents income or loss from operations before income taxes adjusted for certain non-cash items (detailed in the accompanying table) less income taxes. We believe adjusted net income comparable to analysts’ estimates is calculated on the same basis as analysts’ estimates and that many investors use this published research in making investment decisions and evaluating operational trends of the Company and its performance relative to other oil and gas producing companies. Diluted earnings per share (adjusted) as set forth in this release represents adjusted net income comparable to analysts’ estimates on a diluted per share basis. A table is included which reconciles income or loss from operations to adjusted net income comparable to analysts’ estimates and diluted earnings per share (adjusted). The Company provides additional comparative information on prior periods along with non-GAAP revenue disclosures on its website.

Cash flow from operations before changes in working capital (sometimes referred to as “adjusted cash flow”) as defined in this release represents net cash provided by operations before changes in working capital and exploration expense adjusted for certain non-cash compensation items. Cash flow from operations before changes in working capital is widely accepted by the investment community as a financial indicator of an oil and gas company’s ability to generate cash to internally fund exploration and development activities and to service debt. Cash flow from operations before changes in working capital is also useful because it is widely used by professional research analysts in valuing, comparing, rating and providing investment recommendations of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Cash flow from operations before changes in working capital is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operations, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity. A table is included which reconciles net cash provided by operations to cash flow from operations before changes in working capital as used in this release. On its website, the Company provides additional comparative information on prior periods for cash flow, cash margins and non-GAAP earnings as used in this release.

The cash prices realized for oil and natural gas production, including the amounts realized on cash-settled derivatives and net of transportation, gathering, processing and compression expense, is a critical component in the Company’s performance tracked by investors and professional research analysts in valuing, comparing, rating and providing investment recommendations and forecasts of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Due to the GAAP disclosures of various derivative transactions and third-party transportation, gathering, processing and compression expense, such information is now reported in various lines of the income statement. The Company believes that it is important to furnish a table reflecting the details of the various components of each line in the statement of operations to better inform the reader of the details of each amount and provide a summary of the realized cash-settled amounts and third-party transportation, gathering, processing and compression expense which were historically reported as natural gas, NGLs and oil sales. This information is intended to bridge the gap between various readers’ understanding and fully disclose the information needed.

The Company discloses in this release the detailed components of many of the single line items shown in the GAAP financial statements included in the Company’s quarterly report on Form 10-Q. The Company believes that it is important to furnish this detail of the various components comprising each line of the Statements of Operations to better inform the reader of the details of each amount, the changes between periods and the effect on its financial results.

RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading U.S. independent natural gas and NGL producer with operations focused on stacked-pay projects in the Appalachian Basin. The Company is headquartered in Fort Worth, Texas. More information about Range can be found at www.rangeresources.com.

Included within this release are certain “forward-looking statements” within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are not limited to historical facts, but reflect Range’s current beliefs, expectations or intentions regarding future events. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “outlook”, “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements.

All statements, except for statements of historical fact, made within regarding activities, events or developments the Company expects, believes or anticipates will or may occur in the future, such as those regarding future well costs, expected asset sales, well productivity, future liquidity and financial resilience, anticipated exports and related financial impact, NGL market supply and demand, improving commodity fundamentals and pricing, future capital efficiencies, future shareholder value, emerging plays, capital spending, anticipated drilling and completion activity, acreage prospectivity, expected pipeline utilization and future guidance information, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and Range's future performance are subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements. Further information on risks and uncertainties is available in Range's filings with the Securities and Exchange Commission (SEC), including its most recent Annual Report on Form 10-K. Unless required by law, Range undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

The SEC permits oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions as well as the option to disclose probable and possible reserves. Range has elected not to disclose its probable and possible reserves in its filings with the SEC. Range uses certain broader terms such as "resource potential,” “unrisked resource potential,” "unproved resource potential" or "upside" or other descriptions of volumes of resources potentially recoverable through additional drilling or recovery techniques that may include probable and possible reserves as defined by the SEC's guidelines. Range has not attempted to distinguish probable and possible reserves from these broader classifications. The SEC’s rules prohibit us from including in filings with the SEC these broader classifications of reserves. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of actually being realized. Unproved resource potential refers to Range's internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques and have not been reviewed by independent engineers. Unproved resource potential does not constitute reserves within the meaning of the Society of Petroleum Engineer's Petroleum Resource Management System and does not include proved reserves. Area wide unproven resource potential has not been fully risked by Range's management. “EUR”, or estimated ultimate recovery, refers to our management’s estimates of hydrocarbon quantities that may be recovered from a well completed as a producer in the area. These quantities may not necessarily constitute or represent reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or the SEC’s oil and natural gas disclosure rules. Actual quantities that may be recovered from Range's interests could differ substantially. Factors affecting ultimate recovery include the scope of Range's drilling program, which will be directly affected by the availability of capital, drilling and production costs, commodity prices, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals, field spacing rules, recoveries of gas in place, length of horizontal laterals, actual drilling results, including geological and mechanical factors affecting recovery rates and other factors. Estimates of resource potential may change significantly as development of our resource plays provides additional data.

In addition, our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. Investors are urged to consider closely the disclosure in our most recent Annual Report on Form 10-K, available from our website at www.rangeresources.com or by written request to 100 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102. You can also obtain this Form 10-K on the SEC’s website at www.sec.gov or by calling the SEC at 1-800-SEC-0330.

SOURCE: Range Resources Corporation

Range Investor Contacts:

Laith Sando, Vice President – Investor Relations
817-869-4267
lsando@rangeresources.com

Range Media Contacts:

Mark Windle, Director of Corporate Communications
724-873-3223
mwindle@rangeresources.com

RANGE RESOURCES CORPORATION

STATEMENTS OF OPERATIONS

Based on GAAP reported earnings with additional

details of items included in each line in Form 10-Q

(Unaudited, in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

%

2021

2020

%

Revenues and other income:

Natural gas, NGLs and oil sales (a)

$

621,855

$

349,258

$

1,225,202

$

781,354

Derivative fair value (loss) income

(249,683

)

(6,303

)

(307,562

)

226,872

Brokered natural gas, marketing and other (b)

61,523

33,309

142,025

61,698

ARO settlement (b)

(1

)

(12

)

(12

)

Other (b)

1,028

294

1,089

554

Total revenues and other income

434,722

376,546

15

%

1,060,754

1,070,466

-1

%

Costs and expenses:

Direct operating

19,418

23,960

36,741

55,545

Direct operating – non-cash stock-based compensation (c)

340

434

667

884

Transportation, gathering, processing and compression

282,844

278,875

557,174

563,640

Production and ad valorem taxes

8,414

5,557

13,039

14,576

Brokered natural gas and marketing

68,561

37,993

140,446

70,204

Brokered natural gas and marketing – non-cash stock-based compensation (c)

443

168

893

581

Exploration

4,666

7,655

9,818

14,402

Exploration – non-cash stock-based compensation (c)

362

372

748

702

Abandonment and impairment of unproved properties

2,177

5,524

5,206

10,937

General and administrative

30,742

28,333

58,902

61,343

General and administrative – non-cash stock-based compensation (c)

9,382

9,179

18,787

17,208

General and administrative – lawsuit settlements

118

776

557

1,591

General and administrative – bad debt expense

400

Exit and termination costs

(15,946

)

10,297

(2,232

)

11,892

Deferred compensation plan (d)

35,462

12,587

55,273

4,050

Interest expense

54,965

46,489

109,556

91,946

Interest expense – amortization of deferred financing costs (e)

2,322

2,135

4,609

4,196

Loss (gain) on early extinguishment of debt

63

(8,991

)

98

(21,914

)

Depletion, depreciation and amortization

90,629

104,626

179,012

207,612

Impairment of proved properties

77,000

(Gain) loss on sale of assets

(2,506

)

426

(646

)

(121,673

)

Total costs and expenses

592,456

566,395

5

%

1,188,648

1,065,122

12

%

(Loss) income before income taxes

(157,734

)

(189,849

)

-17

%

(127,894

)

5,344

nm

%

Income tax expense (benefit):

Current

2,569

(3

)

2,737

(366

)

Deferred

(3,831

)

(22,263

)

(1,310

)

7,098

(1,262

)

(22,266

)

1,427

6,732

Net loss

$

(156,472

)

$

(167,583

)

-7

%

$

(129,321

)

$

(1,388

)

nm

%

Net Loss Income Per Common Share:

Basic

$

(0.65

)

$

(0.70

)

$

(0.53

)

$

(0.01

)

Diluted

$

(0.65

)

$

(0.70

)

$

(0.53

)

$

(0.01

)

Weighted average common shares outstanding, as reported:

Basic

242,592

239,472

1

%

242,377

242,717

0

%

Diluted

242,592

239,472

1

%

242,377

242,717

0

%

(a) See separate natural gas, NGLs and oil sales information table.
(b) Included in Brokered natural gas, marketing and other revenues in the 10-Q.
(c) Costs associated with stock compensation and restricted stock amortization, which have been reflected in the categories associated with the direct personnel costs, which are combined with the cash costs in the 10-Q.
(d) Reflects the change in market value of the vested Company stock held in the deferred compensation plan.
(e) Included in interest expense in the 10-Q.


RANGE RESOURCES CORPORATION

BALANCE SHEETS

(In thousands)

June 30,

December 31,

2021

2020

(Unaudited)

(Audited)

Assets

Current assets

$

313,847

$

266,508

Derivative assets

47,348

40,012

Natural gas and oil properties, successful efforts method

5,733,399

5,686,809

Transportation and field assets

3,826

4,161

Operating lease right-of-use assets

52,291

63,581

Other

78,722

75,865

$

6,229,433

$

6,136,936

Liabilities and Stockholders’ Equity

Current liabilities

$

669,953

$

673,445

Asset retirement obligations

6,689

6,689

Derivative liabilities

249,277

26,707

Bank debt

114,025

693,123

Senior notes

2,922,632

2,329,745

Senior subordinated notes

17,384

Total debt

3,036,657

3,040,252

Deferred tax liability

134,000

135,267

Derivative liabilities

22,367

9,746

Deferred compensation liability

121,010

81,481

Operating lease liabilities

32,770

43,155

Asset retirement obligations and other liabilities

87,336

91,157

Divestiture contract obligation

346,113

391,502

Common stock and retained earnings

1,553,684

1,668,146

Other comprehensive loss

(338

)

(479

)

Common stock held in treasury stock

(30,085

)

(30,132

)

Total stockholders’ equity

1,523,261

1,637,535

$

6,229,433

$

6,136,936


RECONCILIATION OF TOTAL REVENUES AND OTHER INCOME TO TOTAL REVENUE EXCLUDING CERTAIN ITEMS, a non-GAAP measure

(Unaudited, in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

%

2021

2020

%

Total revenues and other income, as reported

$

434,722

$

376,546

15

%

$

1,060,754

$

1,070,466

-1

%

Adjustment for certain special items:

Total change in fair value related to derivatives prior to settlement loss (gain)

209,370

125,803

227,854

(7,443

)

ARO settlement loss

1

12

12

Total revenues, as adjusted, non-GAAP

$

644,093

$

502,361

28

%

$

1,288,608

$

1,063,035

21

%

RANGE RESOURCES CORPORATION

CASH FLOWS FROM OPERATING ACTIVITIES

(Unaudited in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net loss

$

(156,472

)

$

(167,583

)

$

(129,321

)

$

(1,388

)

Adjustments to reconcile net cash provided from continuing operations:

Deferred income tax (benefit) expense

(3,831

)

(22,263

)

(1,310

)

7,098

Depletion, depreciation, amortization and impairment

90,629

104,626

179,012

284,612

Abandonment and impairment of unproved properties

2,178

5,524

5,206

10,937

Derivative fair value loss (income)

249,683

6,303

307,562

(226,872

)

Cash settlements on derivative financial instruments

(40,313

)

119,500

(79,708

)

219,429

Divestiture contract obligation

(16,130

)

(3,135

)

Allowance for bad debts

400

Amortization of deferred issuance costs and other

2,177

1,741

4,259

3,398

Deferred and stock-based compensation

45,059

22,637

75,113

23,113

(Gain) loss on sale of assets and other

(2,506

)

426

(646

)

(121,673

)

Loss (gain) on early extinguishment of debt

63

(8,991

)

98

(21,914

)

Changes in working capital:

Accounts receivable

(15,992

)

19,045

(49,138

)

103,390

Inventory and other

(1,001

)

376

(879

)

(4,056

)

Accounts payable

(13,178

)

(46,013

)

21,240

(27,353

)

Accrued liabilities and other

33,817

43,434

(44,918

)

(45,853

)

Net changes in working capital

3,646

16,842

(73,695

)

26,128

Net cash provided from operating activities

$

174,183

$

78,762

$

283,435

$

203,268

RECONCILIATION OF NET CASH PROVIDED FROM OPERATING ACTIVITIES, AS REPORTED, TO CASH FLOW FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL, a non-GAAP measure

(Unaudited, in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net cash provided from operating activities, as reported

$

174,183

$

78,762

$

283,435

$

203,268

Net changes in working capital

(3,646

)

(16,842

)

73,695

(26,128

)

Exploration expense

4,666

7,655

9,818

14,402

Lawsuit settlements

118

776

557

1,591

Exit and termination costs

184

10,297

394

11,892

Non-cash compensation adjustment

1,075

509

2,114

1,122

Cash flow from operations before changes in working capital – non-GAAP measure

$

176,580

$

81,157

$

370,013

$

206,147

ADJUSTED WEIGHTED AVERAGE SHARES OUTSTANDING

(Unaudited, in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Basic:

Weighted average shares outstanding

249,694

245,879

249,008

247,516

Stock held by deferred compensation plan

(7,102

)

(6,407

)

(6,631

)

(4,799

)

Adjusted basic

242,592

239,472

242,377

242,717

Dilutive:

Weighted average shares outstanding

249,694

245,879

249,008

247,516

Dilutive stock options under treasury method

(7,102

)

(6,407

)

(6,631

)

(4,799

)

Adjusted dilutive

242,592

239,472

242,377

242,717


RANGE RESOURCES CORPORATION

RECONCILIATION OF NATURAL GAS, NGLs AND OIL SALES AND DERIVATIVE FAIR VALUE INCOME (LOSS) TO CALCULATED CASH REALIZED NATURAL GAS, NGLs AND OIL PRICES WITH AND WITHOUT THIRD PARTY TRANSPORTATION, GATHERING AND COMPRESSION FEES, a non-GAAP measure

(Unaudited, in thousands, except per unit data)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

%

2021

2020

%

Natural gas, NGL and oil sales components:

Natural gas sales

$

321,565

$

214,207

$

657,366

$

467,456

NGL sales

255,533

124,383

485,941

267,622

Oil sales

44,757

10,668

81,895

46,276

Total oil and gas sales, as reported

$

621,855

$

349,258

78

%

$

1,225,202

$

781,354

57

%

Derivative fair value (loss) income, as reported:

$

(249,683

)

$

(6,303

)

$

(307,562

)

$

226,872

Cash settlements on derivative financial instruments – loss (gain):

Natural gas

7,514

(90,837

)

8,862

(171,009

)

NGLs

20,838

(6,905

)

51,757

(16,948

)

Crude Oil

11,961

(21,758

)

19,089

(31,472

)

Total change in fair value related to derivatives prior to settlement, a non-GAAP measure

$

(209,370

)

$

(125,803

)

$

(227,854

)

$

7,443

Transportation, gathering, processing and compression components:

Natural gas

$

158,637

$

167,367

$

320,297

$

337,208

NGLs

123,758

110,718

236,428

225,642

Oil

449

790

449

790

Total transportation, gathering, processing and compression, as reported

$

282,844

$

278,875

$

557,174

$

563,640

Natural gas, NGL and oil sales, including cash-settled derivatives: (c)

Natural gas sales

$

314,051

$

305,044

$

648,504

$

638,465

NGL sales

234,695

131,288

434,184

284,570

Oil sales

32,796

32,426

62,806

77,748

Total

$

581,542

$

468,758

24

%

1,145,494

1,000,783

14

%

Production of oil and gas during the periods (a):

Natural gas (mcf)

131,886,931

151,127,582

-13

%

262,215,672

296,888,174

-12

%

NGL (bbl)

9,153,411

9,716,261

-6

%

17,896,355

19,349,296

-8

%

Oil (bbl)

777,067

720,125

8

%

1,535,058

1,588,422

-3

%

Gas equivalent (mcfe) (b)

191,469,799

213,745,898

-10

%

378,804,150

422,514,482

-10

%

Production of oil and gas – average per day (a):

Natural gas (mcf)

1,449,307

1,660,743

-13

%

1,448,705

1,631,254

-11

%

NGL (bbl)

100,587

106,772

-6

%

98,875

106,315

-7

%

Oil (bbl)

8,539

7,913

8

%

8,481

8,728

-3

%

Gas equivalent (mcfe) (b)

2,104,064

2,348,856

-10

%

2,092,841

2,321,508

-10

%

Average prices, excluding derivative settlements and before third party transportation costs:

Natural gas (mcf)

$

2.44

$

1.42

72

%

$

2.51

$

1.57

59

%

NGL (bbl)

$

27.92

$

12.80

118

%

$

27.15

$

13.83

96

%

Oil (bbl)

$

57.60

$

14.81

289

%

$

53.35

$

29.13

83

%

Gas equivalent (mcfe) (b)

$

3.25

$

1.63

99

%

$

3.23

$

1.85

75

%

Average prices, including derivative settlements before third party transportation costs: (c)

Natural gas (mcf)

$

2.38

$

2.02

18

%

$

2.47

$

2.15

15

%

NGL (bbl)

$

25.64

$

13.51

90

%

$

24.26

$

14.71

65

%

Oil (bbl)

$

42.20

$

45.03

-6

%

$

40.91

$

48.95

-16

%

Gas equivalent (mcfe) (b)

$

3.04

$

2.19

38

%

$

3.02

$

2.37

28

%

Average prices, including derivative settlements and after third party transportation costs: (d)

Natural gas (mcf)

$

1.18

$

0.91

29

%

$

1.25

$

1.01

23

%

NGL (bbl)

$

12.12

$

2.12

472

%

$

11.05

$

3.05

263

%

Oil (bbl)

$

41.63

$

43.93

-5

%

$

40.62

$

48.45

-16

%

Gas equivalent (mcfe) (b)

$

1.56

$

0.89

76

%

$

1.55

$

1.03

50

%

Transportation, gathering and compression expense per mcfe

$

1.48

$

1.30

13

%

$

1.47

$

1.33

10

%

(a) Represents volumes sold regardless of when produced.
(b) Oil and NGLs are converted at the rate of one barrel equals six mcfe based upon the approximate relative energy content of oil to natural gas, which is not necessarily indicative of the relationship of oil and natural gas prices.
(c) Excluding third party transportation, gathering and compression costs.
(d) Net of transportation, gathering and compression costs.

RANGE RESOURCES CORPORATION

RECONCILIATION OF INCOME BEFORE INCOME TAXES
AS REPORTED TO INCOME BEFORE INCOME TAXES
EXCLUDING CERTAIN ITEMS, a non-GAAP measure
(Unaudited, in thousands, except per share data)

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

(Loss) income from operations before income taxes, as reported

$

(157,734

)

$

(189,849

)

$

(127,894

)

$

5,344

Adjustment for certain special items:

(Gain) loss on sale of assets

(2,506

)

426

(646

)

(121,673

)

Loss (gain) on ARO settlements

1

12

12

Change in fair value related to derivatives prior to settlement

209,370

125,803

227,854

(7,443

)

Abandonment and impairment of unproved properties

2,177

5,524

5,206

10,937

Loss (gain) on early extinguishment of debt

63

(8,991

)

98

(21,914

)

Impairment of proved property and other assets

77,000

Lawsuit settlements

118

776

557

1,591

Exit and termination costs

(15,946

)

10,297

(2,232

)

11,892

Brokered natural gas and marketing – non-cash stock-based compensation

443

168

893

581

Direct operating – non-cash stock-based compensation

340

434

667

884

Exploration expenses – non-cash stock-based compensation

362

372

748

702

General & administrative – non-cash stock-based compensation

9,382

9,179

18,787

17,208

Deferred compensation plan – non-cash adjustment

35,462

12,587

55,273

4,050

Income (loss) before income taxes, as adjusted

81,532

(33,262

)

179,311

(20,829

)

Income tax expense (benefit), as adjusted

Current

2,569

(3

)

2,737

(366

)

Deferred (a)

20,383

(8,315

)

44,828

(5,207

)

Net income (loss) excluding certain items, a non-GAAP measure

$

58,580

$

(24,944

)

$

131,746

$

(15,256

)

Non-GAAP income (loss) per common share

Basic

$

0.24

$

(0.10

)

$

0.54

$

(0.06

)

Diluted

$

0.24

$

(0.10

)

$

0.54

$

(0.06

)

Non-GAAP diluted shares outstanding, if dilutive

247,926

239,472

247,806

242,717

(a) Deferred taxes are estimated to be approximately 25% for 2021 and 2020.

RANGE RESOURCES CORPORATION

RECONCILIATION OF NET INCOME (LOSS), EXCLUDING
CERTAIN ITEMS AND ADJUSTMENT EARNINGS PER SHARE, non-GAAP measures

(In thousands, except per share data)

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

Net loss, as reported

$

(156,472

)

$

(167,583

)

$

(129,321

)

$

(1,388

)

Adjustment for certain special items:

(Gain) loss on sale of assets

(2,506

)

426

(646

)

(121,673

)

Loss (gain) on ARO settlements

1

12

12

Loss (gain) on early extinguishment of debt

63

(8,991

)

98

(21,914

)

Change in fair value related to derivatives prior to settlement

209,370

125,803

227,854

(7,443

)

Impairment of proved property

77,000

Abandonment and impairment of unproved properties

2,177

5,524

5,206

10,937

Lawsuit settlements

118

776

557

1,591

Exit and termination costs

(15,946

)

10,297

(2,232

)

11,892

Non-cash stock-based compensation

10,527

10,153

21,095

19,375

Deferred compensation plan

35,462

12,587

55,273

4,050

Tax impact

(24,214

)

(13,948

)

(46,138

)

12,305

Net income (loss) excluding certain items, a non-GAAP measure

$

58,580

$

(24,944

)

$

131,746

$

(15,256

)

Net loss per diluted share, as reported

$

(0.65

)

$

(0.70

)

$

(0.53

)

$

(0.01

)

Adjustment for certain special items per diluted share:

(Gain) loss on sale of assets

(0.01

)

0.00

(0.00

)

(0.50

)

Loss (gain) on ARO settlements

0.00

0.00

0.00

Loss (gain) on early extinguishment of debt

0.00

(0.04

)

0.00

(0.09

)

Change in fair value related to derivatives prior to settlement

0.86

0.53

0.94

(0.03

)

Impairment of proved property and other assets

0.32

Abandonment and impairment of unproved properties

0.01

0.02

0.02

0.05

Lawsuit settlements

0.00

0.00

0.00

0.01

Exit and termination costs

(0.07

)

0.04

(0.01

)

0.05

Non-cash stock-based compensation

0.04

0.04

0.09

0.08

Deferred compensation plan

0.15

0.05

0.23

0.02

Adjustment for rounding differences

0.01

0.02

(0.01

)

(0.01

)

Tax impact

(0.10

)

(0.06

)

(0.19

)

0.05

Net income (loss) per diluted share, excluding certain items, a non-GAAP measure

$

0.24

$

(0.10

)

$

0.54

$

(0.06

)

Adjusted earnings per share, a non-GAAP measure:

Basic

$

0.24

$

(0.10

)

$

0.54

$

(0.06

)

Diluted

$

0.24

$

(0.10

)

$

0.54

$

(0.06

)

RANGE RESOURCES CORPORATION

RECONCILIATION OF CASH MARGIN PER MCFE, a non-GAAP measure

(Unaudited, in thousands, except per unit data)

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

Revenues

Natural gas, NGL and oil sales, as reported

$

621,855

$

349,258

$

1,225,202

$

781,354

Derivative fair value (loss) income, as reported

(249,683

)

(6,303

)

(307,562

)

226,872

Less non-cash fair value loss (gain)

209,370

125,803

227,854

(7,443

)

Brokered natural gas and marketing and other, as reported

62,550

33,591

143,114

62,240

Less ARO settlement and other (gains) losses

(1,027

)

(282

)

(1,089

)

(542

)

Cash revenue applicable to production

643,065

502,067

1,287,519

1,062,481

Expenses

Direct operating, as reported

19,758

24,394

37,408

56,429

Less direct operating stock-based compensation

(340

)

(434

)

(667

)

(884

)

Transportation, gathering and compression, as reported

282,844

278,875

557,174

563,640

Production and ad valorem taxes, as reported

8,414

5,557

13,039

14,576

Brokered natural gas and marketing, as reported

69,004

38,161

141,339

70,785

Less brokered natural gas and marketing stock-based compensation

(443

)

(168

)

(893

)

(581

)

General and administrative, as reported

40,242

38,288

78,246

80,542

Less G&A stock-based compensation

(9,382

)

(9,179

)

(18,787

)

(17,208

)

Less lawsuit settlements

(118

)

(776

)

(557

)

(1,591

)

Interest expense, as reported

57,287

48,624

114,165

96,142

Less amortization of deferred financing costs

(2,322

)

(2,135

)

(4,609

)

(4,196

)

Cash expenses

464,944

421,207

915,858

857,654

Cash margin, a non-GAAP measure

$

178,121

$

80,860

$

371,661

$

204,827

Mmcfe produced during period

191,470

213,746

378,804

422,514

Cash margin per mcfe

$

0.93

$

0.38

$

0.98

$

0.48

RECONCILIATION OF (LOSS) INCOME BEFORE INCOME TAXES TO CASH MARGIN

(Unaudited, in thousands, except per unit data)

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

(Loss) income before income taxes, as reported

$

(157,734

)

$

(189,849

)

$

(127,894

)

$

5,344

Adjustments to reconcile (loss) income before income taxes to cash margin:

ARO settlements and other gains

(1,027

)

(282

)

(1,089

)

(542

)

Derivative fair value loss (income)

249,683

6,303

307,562

(226,872

)

Net cash receipts on derivative settlements

(40,313

)

119,500

(79,708

)

219,429

Exploration expense

4,666

7,655

9,818

14,402

Lawsuit settlements

118

776

557

1,591

Exit and termination costs

(15,946

)

10,297

(2,232

)

11,892

Deferred compensation plan

35,462

12,587

55,273

4,050

Stock-based compensation (direct operating, brokered natural gas and marketing, general and administrative and termination costs)

10,527

10,153

21,095

19,375

Interest – amortization of deferred financing costs

2,322

2,135

4,609

4,196

Depletion, depreciation and amortization

90,629

104,626

179,012

207,612

(Gain) loss on sale of assets

(2,506

)

426

(646

)

(121,673

)

Loss (gain) on early extinguishment of debt

63

(8,991

)

98

(21,914

)

Impairment of proved property and other assets

77,000

Abandonment and impairment of unproved properties

2,177

5,524

5,206

10,937

Cash margin, a non-GAAP measure

$

178,121

$

80,860

$

371,661

$

204,827