Monday, August 9, 2010

Bradford County, PA - Marcellus Shale Update

By Andrea:

Range Resources Corp. (RRC) released an update on the Marcellus Shale in the 2Q 2010 Earnings Call. They are increasing their acreage in the Marcellus Shale in Bradford County, PA. They plan to add 210 million in the Marcellus to their capital budget for 2010:

One other way that we're fast forwarding our Marcellus program, is that we are combining about 14,000 net acres in Eastern Bradford County with Talisman's acreage there. Talisman will operate and we'll have about a 33% working interest in this industry joint venture. Talisman has done a good job of operating here and has a dominant acreage position in this area. Combining with them will allow us to more efficiently develop this part of the play, utilizing their technical team and their drilling rigs. We're estimating that this joint venture add $25 million to our 2010 capital spending.

In total, we'll be adding 210 million in the Marcellus to our capital budget for 2010, all of which is for faster, more efficient development of our Marcellus acreage position. 80% of the company's 2010 budget is now targeted for the Marcellus. I want to make it clear, that even at today's gas price, the returns on the additional capital are very attractive.

Given the increased capital, we are revising our 2010 Marcellus exit rate from 180 million to 200 million per day net to $200 to 210 million per day net. We'll also revise on our expected 2011 Marcellus exit rates from 360 million to 400 million per day net to 400 million to 420 million per day net. We have a first-class team of 220 people located in Pennsylvania focused on this project. In addition, we now have a focused, very experienced and talented Barnett team on this project as well. Given our team, our acreage and the infrastructure we have in place or in the works, we are well positioned to meet or exceed our plans for the Marcellus.

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