Ranger Oil Corp. produced a profit of $17.4 million in the third quarter, up from $3.0 million in the spring, as the Houston-based company grew its sales volumes nearly 3% and pushed up its realized crude oil prices 7%.
Chief Executive Officer Darrin Henke and his Eagle Ford-focused team had forecast sales of 20,000-20,600 b/d for the 3 months ended Sept. 30 and came in at 20,429 bbl, registering a per-barrel price of $68.10. For the fourth quarter, the company sees the sales number ramping to 25,700-27,700, spurred by the Lonestar Resources US Inc. assets acquired earlier this fall as well as generally more efficient operations (OGJ Online, July 14, 2021).
A focus area in coming quarters for Ranger, which changed its name from Penn Virginia, will be to ramp up Lonestar’s operations. The company is mapping the acreage it’s acquired, prioritizing the highest-quality wells while also investing in field infrastructure.
“We expect this plan to result in consistent production for the fourth quarter relative to this quarter for our legacy Ranger assets,” Henke said. “However, the recent closing of the Lonestar acquisition grows our overall production base by approximately 50% on a barrel of oil equivalent basis.”
Ranger’s capital expenditures during the quarter totaled $60 million and are expected to grow to $65-75 million in the fourth quarter. Henke in October said 2022 capex should grow by 25% from this year’s roughly $220 million.
Henke and his lieutenants are targeting mid- to high-single-digit production growth for 2022, thanks in large part to a 25% jump in lateral footage as the company extends its wells. That, they say, should set the stage for Ranger to produce more than $200 million in free cash flow, up from the company’s initial estimate of $150 million. Free cash flow in the third quarter was $28.9 million.
“What we’re really trying to do is design a very efficient program that we can execute with excellence,” Henke said on a Nov. 4 conference call discussing Ranger’s results.