Range Resources Corp., Ft. Worth., has reduced its capital budget for 2015 to $870 million from the previously reported $1.3 billion, which already represented an 18% cut compared with the 2014 budget.
The original budget included capital efficiencies Range expected to realize with its longer laterals, better lateral targeting, and improved completions based on its 2014 results. No reductions in service costs were included in the initial budget.
Almost 95% of the revised capital budget targets the Marcellus shale. Concentration of its operations in the Marcellus, continuing operating efficiencies, and anticipated cost reductions enables Range to target 20% production growth for the year.
Range expects 24% total production growth for 2014 at 1.16 bcfd of gas equivalent. Fourth quarter production volumes were 1.27 bcfed, of which 31% were liquids. The fourth quarter production varied from guidance as a result of the early propane line fill and operational flow on Mariner West in November and December.
Construction delays on several compressor start-ups scheduled for late in the quarter also pushed 80 MMcfed of fourth quarter production to the first quarter. All compressors are currently in various stages of installation with the last compressor expected to be online by the end of February. Range expects no further delays in building compressor stations scheduled for the year.
“I believe that there are three essential components to be successful in this commodity price environment: a large, high-quality asset base; a very low cost structure; and a strong financial position,” commented Jeff Ventura, Range chairman and chief executive officer, adding that “Range has all three.”
“The time and effort that Range spent in identifying and capturing one of the largest acreage positions in the core of the Marcellus with three stacked reservoirs and low development costs gives Range a distinct competitive advantage in this period of low commodity prices and we will continue to adapt and take advantage of opportunities as commodity markets change,” he said.