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Range Resources (RRC) Q1 Earnings Beat on Higher Gas Prices

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Range Resources Corporation RRC reported first-quarter 2021 adjusted earnings of 30 cents per share, which beat the Zacks Consensus Estimate of 22 cents. Moreover, the bottom line surged from 4 cents per share in the prior-year quarter.

Total revenues for the reported quarter were $626 million, surpassing the Zacks Consensus Estimate of $566 million. However, the top line deteriorated from the prior-year number of $693.9 million.

The strong quarterly earnings can be attributed to increased commodity prices and decreased direct operating costs. This was partially offset by lower production volumes.

Range Resources Corporation Price, Consensus and EPS Surprise

Range Resources Corporation Price, Consensus and EPS Surprise
Range Resources Corporation Price, Consensus and EPS Surprise

Range Resources Corporation price-consensus-eps-surprise-chart | Range Resources Corporation Quote

Operational Performance

For first-quarter 2021, the company’s production averaged 2,081.5 million cubic feet equivalent per day, down 9% from the prior-year period. Natural gas contributed 69.6% to total production, while NGLs and oil accounted for the remaining.

Oil and NGL production fell 12% and 8%, respectively, on a year-over-year basis. Moreover, natural gas production decreased 10% from the prior-year quarter.

Its total price realization (excluding derivative settlements and before third-party transportation costs) averaged $3.22 per thousand cubic feet equivalent (Mcfe), up 56% year over year. Natural gas prices rose 48% on a year-over-year basis to $2.58 per Mcf. Moreover, NGL and oil prices increased 77% and 19%, respectively.

Costs & Expenses

Total costs and expenses rose to $596.2 million from $498.7 million in the year-ago quarter. Total exploration costs declined to $5.2 million from $6.7 million a year ago.

On a per unit basis, direct operating costs contracted to 9 cents per Mcfe from the year-ago figure of 15 cents. However, transportation, gathering, processing and compression expenses were recorded at $1.46 per Mcfe, higher than $1.36 in the prior-year quarter.

Capital Expenditure & Balance Sheet

The company’s drilling and completion expenditure totaled $97.1 million for first-quarter 2021. Moreover, $6.4 million was used in acreage leasehold, while $1.9 million was utilized in gathering.

At first quarter-end, it had total debt of $3,055.2 million, with a debt to capitalization of 64.7%.

Outlook

For 2021, Range Resources reiterated its production guidance at an average of 2.15 Bcfe per day, with 30% allocated to liquids production. Moreover, the company’s overall capital budget is expected to be $425 million.

Notably, exploration expense for 2021 is estimated to be $20-$28 million. On a per-unit basis, direct operating expenses for the year are expected within 9-11 cents per Mcfe. Transport, gathering, processing and compression expenses are estimated in the range of $1.35-$1.40 per Mcfe.

As of Apr 16, the company had around 70% of its 2021 remaining production volume hedged at a floor price of $2.60 per million British thermal units and ceiling price of $2.79. Similarly, it hedged 70% of crude production at $52 per barrel.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include CrossAmericaPartners LP CAPL, Frank's International N.V. FI and Holly Energy Partners, L.P. HEP, each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CrossAmerica’s bottom line for first-quarter 2021 is expected to surge 166.7% year over year.

Frank's International’s bottom line for 2021 is expected to rise 46.7% year over year.

Holly Energy’s bottom line for 2021 is expected to jump 26.1% year over year.

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Range Resources Corporation (RRC) : Free Stock Analysis Report

Holly Energy Partners, L.P. (HEP) : Free Stock Analysis Report

Franks International N.V. (FI) : Free Stock Analysis Report

CrossAmerica Partners LP (CAPL) : Free Stock Analysis Report

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