Range Revelations

On the Range Resources Q2 earnings conference call today, management revealed some additional information regarding development of the Marcellus.

In an update given earlier this month it was stated that the last 10 wells came in at 4.2 mmcf/d but today it was noted that the subsequent 7 wells averaged 4.9 mmcf/d.

The company has secured takeaway capacity with multiple transmission companies for a total of 150 mmcf/d and is seeking to double that amount. Pinkerton noted that 6 of the 8 largest US transmission lines run right through Range's acreage in the play. He also said that a lot of people with a lot of money are getting involved in developing gathering and midstream assets so he doesn't view that a constraint.

As well, Range now has four separate agreements in place which will satisfy their water source and disposal needs for the next few years.

Rig count in the play will increase to around 8 by the end of 2009 including 2 fit for purpose rigs now being built. Expected completions by then should ramp to 80-100. "Where can it go? Can it get to 20, 30, 40 rigs? Yes, certainly, over time"

No decline data was released but it was noted that several vertical wells have been on line for two years or more and a number of horizontals for 1 year now. With the other 100 wells drilled including 22 horizontals, and other wells drilled by Atlas and Chesapeake, CEO John Pinkerton feels that there is a very strong geologic model which they will reveal probably around March once the bulk of the acreage has been acquired.

Shareholders will be pleasantly surprised when more technical data is released at that time.

Earnings release at http://www.b2i.us/profiles/investor/ResLibraryView.asp?BzID=790&ResLibraryID=25428&Category=1261