RANGE RESOURCES CORP Q3 FY2024 earnings call

• Consistent performance with repeatable execution in areas like safe operations, drilling/completion improvements, free cash flow generation, and capital allocation.
• Low capital intensity due to class-leading drilling/completion costs, shallow base decline, large blocky core inventory, and talented team.
• Liquids business strength: highest NGL premium in company history, with NGLs contributing significantly to revenue.
• Third quarter production at 2.2 Bcfe per day, expected fourth quarter near similar level, annual 2024 production ~2.17 Bcfe per day (30 million cubic feet per day above previous midpoint).
• Invested $156 million in Q3 running 2 rigs and 1 completion crew, on track with full-year capital guidance.
• Thoughtful hedging program contributed to positive free cash flow despite challenging natural gas prices.

Range's third quarter had an aggregate unhedged price realization of $2.61 per Mcfe. Liquids revenue was a key driver, with the ability to market ethane, propane, and butane into international markets driving the highest NGL premium in company history at over $4 per barrel above the Mont Belvieu Index. Roughly 30% of Range's production is liquids, which have accounted for more than 50% of pre-hedge revenue in five of the last six quarters. The aggregate unhedged price realization was a $0.45 premium over Henry Hub Natural Gas, differentiating Range from purely dry gas producers.

• Fourth quarter production expected near 2.2 Bcfe per day, annual 2024 production ~2.17 Bcfe per day, higher than previous midpoint due to strong well performance and infrastructure optimization.
• 2025 capital and production plans still being finalized, but running one completion crew as baseline.
• Optimistic about LNG infrastructure commissioning in 2025, including Plaquemines and Corpus Christi projects, which could drive gas utilization.

• Uncertainty in natural gas prices impacting financial results.
• Dependence on LNG infrastructure commissioning and weather patterns for production uplift.
• Potential changes in market dynamics affecting NGL premiums.

Q: Scott Hanold asked about midstream optimization's impact on volumes and base decline rate.

A: Dennis Degner responded about long-lateral performance, compression/gathering infrastructure expansion, and base decline at 19%, expecting it to shallow further.

Q: Neil Mehta inquired about 2025 capital plan and NGL realization sustainability.

A: Dennis Degner discussed refining 2025 plans, using 2024 as a proxy, and optimism about NGL premiums continuing in 2025 due to demand and infrastructure.

Q: Doug Leggate asked about capital efficiency and running room for maintaining capital level.

A: Mark Scucchi explained about half of wells on existing pads, averaging across acreage, and inventory measured in decades ensuring longevity.

Q: Kevin McCurdy asked about DUCs and utilization of productive capacity.

A: Dennis Degner said DUCs are ~8-10, and utilization depends on fundamentals, being either steady state or opportunistic.

Q: Roger Read inquired about base decline rates and production mix changes.

A: Dennis Degner stated base decline around 19% and expected slight shallow, with production mix continuing to have ~30% liquids contribution.

Q: Bertrand Donnes asked about data center demand and hedging.

A: Mark Scucchi and Dennis Degner discussed data center demand conversations and hedging to cover fixed costs, with fundamentals driving production decisions.

Q: Michael Scialla asked about NGL markets and CapEx guide.

A: Alan Engberg said majority NGLs go to Gulf, Marcus Hook has lower utilization, and CapEx guide still on track with land spend capturing open parcels.

Q: Leo Mariani asked about share buyback and capital efficiencies.

A: Mark Scucchi said balance sheet in target range allows greater capital return, and Dennis Degner discussed service cost efficiencies and team momentum.

Q: Paul Diamond asked about capital plan and land spend.

A: Dennis Degner said land incremental spend expected to decrease as a small part of program, with some land opportunities remaining but exposure lower in future.