Range Resources (RRC) Q1 2025 Earnings Call April 23, 2025 09:00 AM ET Company Participants Laith Sando - SVP - Corporate Strategy & Investor RelationsDennis Degner - CEO & PresidentMark Scucchi - Executive VP & CFOJacob Roberts - DirectorKevin MacCurdy - Managing DirectorMichael Scialla - Managing DirectorJohn Annis - Vice PresidentNeil Mehta - Head of Americas Natural Resources Equity ResearchDavid Deckelbaum - Managing Director: Sustainability & Energy Transition Conference Call Participants Doug Leggate ...

分组1 - Range Resources reported quarterly earnings of $0.96 per share, exceeding the Zacks Consensus Estimate of $0.90 per share, and up from $0.69 per share a year ago, representing an earnings surprise of 6.67% [1] - The company posted revenues of $854.02 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.25%, compared to $718.23 million in the same quarter last year [2] - Over the last four quarters, Range Resources has consistently surpassed consensus EPS and revenue estimates [2] 分组2 - The stock has experienced a decline of approximately 9.3% since the beginning of the year, while the S&P 500 has declined by 12.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.74 on revenues of $758.66 million, and for the current fiscal year, it is $3.58 on revenues of $3.19 billion [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is in the bottom 19% of over 250 Zacks industries, indicating potential challenges for the sector [8]

Revenue and Production - In Q1 2025, the company reported a 40% increase in revenue from the sale of natural gas, NGLs, and oil compared to Q1 2024, driven by a 37% increase in average realized prices and a 2% increase in production volumes [74]. - Total natural gas, NGLs, and oil sales reached $791.9 million in Q1 2025, a 38% increase from $567.0 million in Q1 2024 [80]. - Daily production averaged 2.2 Bcfe in Q1 2025, up from 2.1 Bcfe in the same period of 2024, reflecting a 2% increase in total production [74]. - Natural gas production increased by 2% to 135,963,430 mcf in Q1 2025 from 132,650,240 mcf in Q1 2024, while oil production decreased by 31% to 423,579 bbls [78]. - Oil production decreased to 424 Mbbls in Q1 2025, down from 610 Mbbls in Q1 2024, a decline of 30.5% [79]. - NGLs sales rose to $275.7 million in Q1 2025, compared to $256.1 million in Q1 2024, marking a 7.7% increase [80]. Financial Performance - Net income for Q1 2025 was $97.1 million, or $0.40 per diluted share, compared to $92.1 million, or $0.38 per diluted share in Q1 2024 [75]. - The company generated $330.1 million in cash from operating activities in Q1 2025, a slight decrease of $1.8 million from Q1 2024 [76]. - Cash flows from operating activities were $330.1 million in Q1 2025, slightly down from $331.9 million in Q1 2024 [96]. - The company paid $21.6 million in dividends, increasing the per share dividend by 12.5% to $0.09 compared to $0.08 in Q1 2024 [77]. - The company used operating cash flows to fund $158.3 million of capital expenditures in the first three months of 2025 [103]. Expenses and Costs - Direct operating expenses per mcfe increased to $0.13 in Q1 2025 from $0.11 in Q1 2024, attributed to higher water hauling and pumping costs [77]. - Transportation, gathering, processing, and compression expenses increased to $306.1 million in Q1 2025, up 5% from $290.9 million in Q1 2024 [80]. - Direct operating expense increased to $25.4 million in Q1 2025 from $22.2 million in Q1 2024, reflecting an 18% increase per mcfe [84]. - General and administrative expense decreased to $41.7 million in Q1 2025 from $43.9 million in Q1 2024, a 9% decline per mcfe [84]. - Interest expense decreased to $29.2 million in Q1 2025 from $30.5 million in Q1 2024, a 6% reduction per mcfe [85]. - Depletion, depreciation, and amortization expense increased to $90.6 million in Q1 2025 from $87.1 million in Q1 2024, with a 2% increase per mcfe [86]. Market Conditions and Price Realization - Average NYMEX natural gas prices rose to $3.66 per mcf in Q1 2025 from $2.23 per mcf in Q1 2024, while oil prices decreased to $71.40 per bbl from $76.92 per bbl [73]. - Average realized prices for natural gas increased by 76% to $3.61 per mcf in Q1 2025 from $2.05 per mcf in Q1 2024 [79]. - Average realized prices for oil decreased by 5% to $61.12 per bbl in Q1 2025 from $64.64 per bbl in Q1 2024 [79]. Liquidity and Capital Structure - The company maintained substantial liquidity with $344.6 million in cash on hand and $1.3 billion available under its credit facility [77]. - As of March 31, 2025, the company had approximately $1.6 billion of liquidity, consisting of $344.6 million in cash on hand and $1.3 billion available under the bank credit facility [99]. - The total remaining share repurchase authorization was approximately $948.6 million as of March 31, 2025 [106]. - At March 31, 2025, the company had approximately $1.7 billion of debt outstanding, bearing fixed interest rates averaging 6.0% [109]. - The company has undrawn letters of credit of $164.1 million as of March 31, 2025, which reduce borrowing capacity under the bank credit facility [101]. Risk Management - The company continues to focus on managing price risk through hedging and optimizing operational efficiencies to enhance financial performance [71]. - The company is exposed to market risks related to natural gas, NGLs, and oil prices, with approximately 64% of proved reserves being natural gas [115]. - Derivative fair value loss was $159.0 million in Q1 2025, compared to a gain of $46.6 million in Q1 2024, indicating increased volatility in revenues [81]. - The fair value of the company's derivative contracts approximated a net unrealized loss of $108.3 million as of March 31, 2025 [118]. Other Income and Expenses - Other income rose to $3.2 million in Q1 2025, compared to $3.0 million in Q1 2024, reflecting stable interest income [83]. - Exploration expense rose to $6.4 million in Q1 2025 from $4.5 million in Q1 2024, a 41% increase [90]. - Taxes other than income rose to $6.8 million in Q1 2025 from $5.7 million in Q1 2024, with a 33% increase per mcfe [84]. - Income tax expense decreased to $12.7 million in Q1 2025 from $18.2 million in Q1 2024 [93].

Core Insights - Range Resources Corporation reported strong financial results for the first quarter of 2025, highlighting efficient operations, consistent well performance, and robust free cash flow [3][5][7]. Financial Performance - GAAP revenues for Q1 2025 totaled $691 million, with net cash provided from operating activities at $330 million and net income of $97 million ($0.40 per diluted share) [5][9]. - Cash flow from operations before changes in working capital was $397 million, and adjusted net income was $232 million ($0.96 per diluted share) [6][7]. - The company repurchased $68 million of shares and paid $22 million in dividends, while reducing net debt by $42 million [7][9]. Production and Pricing - Average production for Q1 2025 was 2.20 Bcfe per day, with approximately 69% being natural gas [7][8]. - Realized price, including hedges, was $4.02 per mcfe, with natural gas differential of ($0.15) per mcf to NYMEX [7][8][12]. - Natural gas sales increased to $490 million from $271 million year-over-year, while NGL sales rose to $276 million from $256 million [50]. Cost Structure - Total cash unit costs increased by 3% to $2.01 per mcfe compared to Q1 2024 [6][8]. - Direct operating costs per mcfe rose by 18% to $0.13, while transportation, gathering, processing, and compression costs increased by 4% to $1.55 [6][8]. Capital Expenditures and Guidance - Capital spending for Q1 2025 was $147 million, representing approximately 22% of the annual budget [7][11]. - The company expects its 2025 all-in capital budget to be between $650 million and $690 million, with annual production projected at approximately 2.2 Bcfe per day [16][18]. Strategic Initiatives - Range is collaborating with Liberty Energy Inc. and Imperial Land Corporation to supply natural gas to a proposed power generation facility in Pennsylvania, aimed at attracting data centers and industrial operations [15][16]. - The company plans to exit 2025 with approximately 400,000 lateral feet of surplus inventory to support future development [13].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Range Resources, driven by higher revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - Range Resources is expected to report quarterly earnings of $0.90 per share, reflecting a year-over-year increase of +30.4% [3]. - Revenues are projected to reach $804.12 million, marking a 12% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 6.3% higher in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP reading suggests a potential earnings beat, particularly when combined with a strong Zacks Rank [8]. Earnings Surprise Prediction - The Most Accurate Estimate for Range Resources is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.09%, indicating a bearish outlook from analysts [10][11]. - Despite the negative Earnings ESP, the stock holds a Zacks Rank of 2, complicating predictions for an earnings beat [11]. Historical Performance - In the last reported quarter, Range Resources exceeded expectations by delivering earnings of $0.68 per share against an estimate of $0.55, resulting in a surprise of +23.64% [12]. - The company has beaten consensus EPS estimates in all of the last four quarters [13]. Conclusion - While Range Resources may not be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [16].

Investors looking for stocks in the Oil and Gas - Exploration and Production - United States sector might want to consider either Range Resources (RRC) or Viper Energy Partners (VNOM) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revisio ...

Core Viewpoint - Range Resources Corporation will release its first quarter 2025 financial results on April 22, 2025, after the market closes [1] Group 1: Financial Results Announcement - The financial results news release is scheduled for April 22, 2025, after the close of trading on the New York Stock Exchange [1] - A conference call to review the financial results will take place on April 23, 2025, at 9:00 a.m. ET [2] - The conference call will be accessible via a webcast, which will be archived for replay until May 23, 2025 [2] Group 2: Company Overview - Range Resources Corporation is a leading independent natural gas and NGL producer in the U.S., primarily operating in the Appalachian Basin [3] - The company is headquartered in Fort Worth, Texas [3] - Additional information about Range Resources can be found on their official website [3]

Industry Insights - The American Exploration and Production Council (AXPC) hosted a visit by Secretary Doug Burgum to a hydraulic fracturing site in Pennsylvania, emphasizing the role of local oil and gas in meeting U.S. energy needs [1][2] - The event showcased Halliburton's Zeus® intelligent electric fracturing platform, highlighting how innovation can enhance domestic energy supply while reducing emissions and costs [2][3] - The visit underscored the potential for American energy producers to meet increasing demand both domestically and internationally, while also supporting local communities and driving emissions reductions [3] Company Highlights - AXPC CEO Anne Bradbury stated that with appropriate policies, energy production can grow, supporting jobs and lowering costs for families while reducing emissions [3] - EQT's President and CEO Toby Z. Rice noted the significance of the Administration's visit to Appalachia, recognizing the region's importance in securing America's energy future [3] - Halliburton's President for the Western Hemisphere, Mark Richard, emphasized the evolution of hydraulic fracturing technology and its role in maximizing production and efficiency [3] - Range Resources' CEO Dennis Degner highlighted the readiness of Pennsylvanians to contribute to U.S. energy needs, advocating for leveraging American energy to enhance national security and innovation [3]

Company Overview - Range Resources (RRC) shares have increased by approximately 3.4% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Estimates for Range Resources have trended downward in the past month [2] - The stock has a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4] VGM Scores - Range Resources has a subpar Growth Score of D, a Momentum Score of A, and a Value Score of D, placing it in the bottom 40% for the value investment strategy [3] Industry Performance - Range Resources is part of the Zacks Oil and Gas - Exploration and Production - United States industry [5] - Cheniere Energy (LNG), another player in the same industry, has seen a 6.2% increase in its stock price over the past month [5] - Cheniere Energy reported revenues of $4.44 billion for the last quarter, reflecting an 8% year-over-year decline, with an EPS of $4.33 compared to $5.76 a year ago [6]

Group 1 - The article emphasizes the importance of providing alpha-generating investment ideas and encourages readers to evaluate the author's performance based on past results [1] - The investment strategy is generalist, focusing on sectors with perceived alpha potential compared to the S&P 500, with typical holding periods ranging from a few quarters to multiple years [1] - The article suggests reviewing the ratings history of published articles as an indicator of the author's investment skill and the effectiveness of recommendations [1] Group 2 - The author has disclosed a beneficial long position in shares of RRC and VOO, indicating a personal investment interest in these stocks [2] - The article expresses the author's personal opinions and clarifies that no compensation is received from companies mentioned, ensuring independence in analysis [2] - Seeking Alpha's disclosure notes that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]