Range divests assets in deals worth a total $634 million

Range Resources Corp., Fort Worth, reported it has agreed to sell a 2% proportionately reduced overriding royalty interest in 350,000 net surface acres in southwest Appalachia for gross proceeds totaling $600 million.

Range Resources Corp., Fort Worth, reported it has agreed to sell a 2% proportionately reduced overriding royalty interest in 350,000 net surface acres in southwest Appalachia for gross proceeds totaling $600 million.

The separate transactions, which are both effective Mar. 1, apply to existing and future Marcellus, Utica, and Upper Devonian development on the subject leases. These deals exclude shallower and deeper horizons.

The properties produced 1.9 bcfd of natural gas equivalent in this year’s first quarter. Annualized cash flow associated with these overriding royalty sales is expected to reach $48 million, based on this year’s first-half pricing.

Separately, Range also completed the sale of certain nonproducing acreage in Pennsylvania for gross proceeds of $34 million. That sale closed in June. The properties sold included 20,000 acres in northwest Armstrong County. Sale processes to monetize additional noncore assets remain under way, Range said.

The royalty interest transactions are scheduled to close this month with proceeds utilized to repay amounts outstanding under the company’s revolving credit facility.

The combined gross proceeds of $634 million will reduce total debt by 17%, Range said. Annual interest expense is expected to decline by $30 million and offset a substantial amount of the cash flow reduction associated with the royalty sales.

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