Range Resources(RRC) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Earnings Release Executive Summary & Highlights Range Resources reported strong Q2 2025 results, marked by significant free cash flow, share repurchases, and debt reduction, driven by efficiency gains and stable well performance - CEO Dennis Degner noted a strong start to the fiscal year, with efficiency gains and stable well performance driving robust free cash flow and operational momentum[4] - The company's financial performance supported $74 million in share repurchases and dividend payments, while reducing net debt to $1.2 billion[4] - Range possesses ample high-quality inventory in the Appalachian Basin to support base-load supply growth, continuously improving efficiency through counter-cyclical investments in drilled inventory and consistent well results over the past 18 months[4] Q2 2025 Key Financial and Operational Highlights | Metric | Amount/Data | | :------------------------------------------ | :---------- | | Cash Flow from Operations | $336 million USD | | Cash Flow from Operations (Excluding Working Capital Changes) | $301 million USD | | Share Repurchases | $53 million USD | | Dividend Payments | $21 million USD | | Net Debt Reduced to | $1.2 billion USD | | Capital Expenditures | $154 million USD | | Realized Price (Including Hedges) | $3.49 per Mcfe | | Average Production | 2.20 Bcfe per day | | Natural Gas Percentage | Approximately 68% | | 2025 Production Guidance | Increased | | 2025 Capital Expenditure Guidance | Decreased | | Operational Efficiency | Improved | | Drilling Inventory | Increased | GAAP Financial Results Range Resources reported Q2 2025 GAAP revenue of $856 million, a 62% increase, with net income of $238 million (diluted EPS of $0.99) driven by $155 million in derivative mark-to-market gains - Q2 2025 earnings results included $155 million in mark-to-market derivative gains due to lower commodity prices[6] Q2 2025 GAAP Revenue and Net Income | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Year-over-Year Change (%) | | :----------------------------- | :-------------------- | :-------------------- | :---------------------- | | Total Revenue and Other Income | $856.275 | $530.109 | 62% | | Natural Gas, NGLs and Oil Sales | $666.638 | $478.450 | 39% | | Fair Value Gains on Derivatives | $154.747 | $16.808 | 821% | | Net Income | $237.578 | $28.704 | 728% | | Diluted Earnings Per Share | $0.99 | $0.12 | 725% | | GAAP Net Cash Provided by Operating Activities | $336 | - | - | Non-GAAP Financial Results Q2 2025 non-GAAP metrics show cash flow from operations before working capital changes at $301 million and adjusted net income of $158 million (diluted EPS of $0.66), aligning with analyst expectations Q2 2025 Non-GAAP Financial Metrics | Metric | Amount (million USD) | | :----------------------------------- | :------------------- | | Cash Flow from Operations Before Changes in Working Capital | $301 | | Adjusted Net Income (Comparable to Analyst Estimates) | $158 | | Adjusted Diluted Earnings Per Share | $0.66 | Unit Costs Analysis Range Resources' Q2 2025 total cash unit costs increased by 5% and total unit costs plus DD&A by 4% year-over-year, primarily due to higher transportation, gathering, processing, and compression costs, and non-income taxes Q2 2025 Unit Costs (per Mcfe) | Expense Category | Q2 2025 (per Mcfe) | Q2 2024 (per Mcfe) | Increase/Decrease (%) | | :------------------------------------------ | :----------------- | :----------------- | :-------------------- | | Direct Operating | $0.11 | $0.11 | 0% | | Transportation, Gathering, Processing and Compression | $1.52 | $1.44 | 6% | | Non-Income Taxes | $0.04 | $0.03 | 33% | | General and Administrative | $0.16 | $0.16 | 0% | | Interest Expense | $0.13 | $0.14 | (7%) | | Total Cash Unit Costs | $1.97 | $1.88 | 5% | | Depletion, Depreciation and Amortization (DD&A) | $0.46 | $0.45 | 2% | | Total Unit Costs Plus DD&A | $2.43 | $2.33 | 4% | Production and Realized Pricing Range's Q2 2025 average production was 2.20 Bcfe per day, with natural gas comprising 68%, and the hedged average realized price was $3.49 per Mcfe, showing a significant increase in natural gas prices and a year-over-year decrease in oil prices - The average natural gas price (including basis hedging) was $2.94 per Mcf, or $0.50 per Mcf below NYMEX[10] - Unhedged NGL prices were $23.73 per bbl, approximately $0.61 above the Mont Belvieu weighted equivalent[10] - Unhedged crude oil and condensate realized prices were $52.77 per bbl, $10.95 per bbl below WTI[10] Q2 2025 Average Production and Realized Pricing | Product | Average Daily Net Production (Q2 2025) | Average Realized Price After Hedging (Q2 2025) | | :--------- | :----------------------------------- | :--------------------------------------------- | | Natural Gas | 1,497,771 Mcf | $3.13 per Mcf | | Oil | 6,382 bbl | $54.22 per bbl | | NGLs | 110,209 bbl | $23.88 per bbl | | Equivalents | 2,197,321 Mcfe | $3.49 per Mcfe | Financial Position & Capital Management Share Repurchase and Debt Reduction Range repurchased 1.45 million shares for approximately $53 million in Q2 2025, with $900 million remaining in the repurchase program, and reduced net debt to $1.22 billion by repaying senior notes - 1,453,438 shares were repurchased during the second quarter at an average price of approximately $36.35 per share[11] - Approximately $900 million remained available under the company's share repurchase program as of June 30, 2025[11] - In May 2025, Range repaid the remaining principal balance of its 4.875% Senior Notes due 2025 at par, utilizing cash on hand and its bank credit facility[12] Net Debt (Non-GAAP) | Metric | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | Change (%) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | | Total Reported Debt (Net of Deferred Financing Costs) | $1,211,699 | $1,697,883 | -29% | | Less: Cash and Cash Equivalents | $(134) | $(304,490) | - | | Net Debt (Non-GAAP) | $1,224,866 | $1,404,212 | -13% | Capital Expenditures and Operational Activity Q2 2025 drilling and completion expenditures were $136 million, with year-to-date capital investment of $301 million, $10 million below plan due to operational efficiencies, and increased drilled but uncompleted lateral well inventory - Q2 2025 drilling and completion expenditures were $136 million[13] - Year-to-date capital investment was $301 million, approximately $10 million below plan due to operational efficiencies[13] - Range reduced the upper end of its 2025 capital expenditure guidance to $680 million[13] - Approximately 285,000 lateral feet (20 wells) were drilled and approximately 156,000 lateral feet (12 wells) were turned to sales during the quarter[14] - The company expects to have over 400,000 lateral feet of growth inventory by year-end 2025 to support future development[14] 2025 Planned Wells Turned to Sales | Region | Type | Wells Turned to Sales H1 2025 | Remaining Planned 2025 | Total Planned Wells Turned to Sales 2025 | | :----- | :--------- | :---------------------------- | :--------------------- | :--------------------------------------- | | SW PA | Super Rich | 5 | 3 | 8 | | SW PA | Wet Gas | 17 | 12 | 29 | | SW PA | Dry Gas | 0 | 5 | 5 | | NE PA | Dry Gas | 0 | 4 | 4 | | Total | | 22 | 24 | 46 | 2025 Guidance & Outlook Updated Capital & Production Guidance Range Resources updated its 2025 capital budget to an upper limit of $680 million (total budget $650-$680 million) and raised annual production guidance to approximately 2.225 Bcfe per day, with liquids expected to exceed 30% of total production - The total 2025 capital budget was updated to $650 million to $680 million, previously guided at $650 million to $690 million[17] - Annual 2025 production is expected to be approximately 2.225 Bcfe per day, previously guided at approximately 2.2 Bcfe per day[17] - Liquids production is expected to exceed 30% of total production[17] Updated Expense Guidance The company provided updated full-year 2025 expense guidance, with minor adjustments to direct operating and general and administrative expenses, while other categories remained consistent with previous guidance Updated Full-Year 2025 Expense Guidance | Expense Category | Updated Guidance (per Mcfe/million USD) | Previous Guidance (per Mcfe/million USD) | | :------------------------------------------ | :------------------------------------ | :------------------------------------ | | Direct Operating Expense | $0.12 - $0.13 per Mcfe | $0.12 - $0.14 per Mcfe | | Transportation, Gathering, Processing and Compression Expense | $1.50 - $1.55 per Mcfe | $1.50 - $1.55 per Mcfe | | Non-Income Taxes | $0.03 - $0.04 per Mcfe | $0.03 - $0.04 per Mcfe | | Exploration Expense | $24 - $28 million USD | $24 - $28 million USD | | General and Administrative Expense | $0.17 - $0.18 per Mcfe | $0.17 - $0.19 per Mcfe | | Net Interest Expense | $0.12 - $0.13 per Mcfe | $0.12 - $0.13 per Mcfe | | DD&A Expense | $0.45 - $0.46 per Mcfe | $0.45 - $0.46 per Mcfe | | Net Marketing Expense for Brokerage Natural Gas | $8 - $12 million USD | $8 - $12 million USD | Updated Price Guidance Range Resources updated its 2025 price differential guidance for natural gas liquids, anticipating a higher premium relative to Mont Belvieu equivalent, while natural gas and oil/condensate differential guidance remained unchanged Updated Full-Year 2025 Price Guidance | Product | Updated Guidance | Previous Guidance | | :------------------------ | :----------------------- | :----------------------- | | Natural Gas (NYMEX Differential) | NYMEX minus $0.40 to $0.48 | NYMEX minus $0.40 to $0.48 | | Natural Gas Liquids (MB Differential) | MB plus $0.40 to $1.25 per bbl | MB plus $0.25 to $1.25 per bbl | | Oil/Condensate (WTI Differential) | WTI minus $10.00 to $15.00 | WTI minus $10.00 to $15.00 | Hedging Status Range Resources actively hedges future production and natural gas basis to enhance cash flow predictability and manage price volatility, with a net gain of $19.9 million in fair value from natural gas basis hedges as of June 30, 2025 - Range hedges a portion of its expected future production to enhance cash flow predictability and maintain a strong financial position[21] - The company also hedges basis at various natural gas sales points to limit volatility between benchmark and regional prices[22] - As of June 30, 2025, the combined fair value of natural gas basis hedges was a net gain of $19.9 million[22] Non-GAAP Financial Measures Explanation Non-GAAP Financial Measures Explanation This section defines and explains various non-GAAP financial measures used by Range Resources, such as net income excluding certain items, cash flow from operations before changes in working capital, realized prices, net debt, and cash margin, which management believes provide meaningful supplemental information for industry comparisons and investment decisions - Non-GAAP measures include net income excluding certain items, cash flow from operations before changes in working capital, realized prices, net debt, and cash margin[24] - Adjusted net income (comparable to analyst estimates) is used by investors and analysts to evaluate operational trends and the company's performance relative to other oil and gas producers[25] - Cash flow from operations before changes in working capital is widely accepted in the investment community as a financial indicator of an oil and gas company's ability to internally fund exploration and development activities and service debt[26] - Realized cash prices (including cash-settled derivatives and net of transportation, gathering, processing, and compression expenses) are a key component used by investors and professional research analysts to evaluate and compare the company's performance[27] - Net debt, calculated as total debt less cash and cash equivalents, assists investors and industry analysts in making industry comparisons[28] - PV10 reserve value, disclosed as a supplement to the standardized measure (after-tax amount), presents the discounted future net cash flows attributable to proved reserves before considering future corporate income taxes and current tax structure, providing a more comparable basis for evaluation[30] Company Information & Disclosures Company Overview Range Resources Corporation is a leading independent U.S. natural gas and NGL producer, primarily focused on the Appalachian Basin, with its headquarters in Fort Worth, Texas - Range Resources Corporation (NYSE: RRC) is a leading independent U.S. natural gas and NGL producer[31] - The company's operations are primarily focused on the Appalachian Basin[31] - The company is headquartered in Fort Worth, Texas[31] Forward-Looking Statements This report contains forward-looking statements regarding future events, well costs, asset sales, productivity, liquidity, commodity fundamentals, capital efficiency, and drilling activities, which are subject to significant business risks and uncertainties - Forward-looking statements include those regarding future well costs, anticipated asset sales, well productivity, future liquidity and financial flexibility, anticipated exports and related financial impacts, NGL market supply and demand, future commodity fundamentals and pricing, future capital efficiency, future shareholder value, emerging plays, capital expenditures, anticipated drilling and completion activities, play prospects, anticipated pipeline utilization, and future guidance information[33][34] - These statements are based on assumptions and estimates management believes are reasonable but are subject to broad business risks and uncertainties, with no guarantee that these goals and forecasts will be achieved[34] - Factors affecting ultimate recovery include the scope of drilling programs, capital availability, drilling and production costs, commodity prices, drilling services and equipment availability, drilling results, lease expirations, transportation constraints, regulatory approvals, well spacing rules, in-place natural gas recovery, actual drilling results (including geological and mechanical factors affecting recovery), and other factors[35] - Range undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events that occur after their release date, unless required by law[34] Investor and Media Contacts The report provides contact information for Range Resources' investor relations (Laith Sando, Matt Schmid) and media relations (Mark Windle) for inquiries - Investor contacts: Laith Sando (817-869-4267), Matt Schmid (817-869-1538)[37] - Media contact: Mark Windle (724-873-3223)[38] Unaudited Financial Statements Statements of Operations The statements of operations show significant year-over-year growth in total revenue and other income for Q2 2025 and year-to-date, primarily from increased natural gas, NGLs, and oil sales, and derivative fair value gains, leading to substantial net income growth Statements of Operations (Unaudited, in thousand USD) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | Year-over-Year Change (%) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | Year-over-Year Change (%) | | :------------------------------------------ | :--------------------- | :--------------------- | :------------------------ | :------------------- | :------------------- | :------------------------ | | Total Revenue and Other Income | $856,275 | $530,109 | 62% | $1,546,829 | $1,175,565 | 32% | | Natural Gas, NGLs and Oil Sales | $666,638 | $478,450 | 39% | $1,458,558 | $1,045,451 | 40% | | Fair Value Gains (Losses) on Derivatives | $154,747 | $16,808 | 821% | $(4,210) | $63,406 | -107% | | Total Costs and Expenses | $554,233 | $520,099 | 7% | $1,135,052 | $1,055,213 | 8% | | Income Before Income Taxes | $302,042 | $10,010 | 2917% | $411,777 | $120,352 | 242% | | Net Income | $237,578 | $28,704 | 728% | $334,630 | $120,842 | 177% | | Diluted Earnings Per Share | $0.99 | $0.12 | 725% | $1.39 | $0.49 | 184% | Balance Sheet As of June 30, 2025, Range Resources' total assets were $7.11 billion, a decrease from December 31, 2024, mainly due to reduced current assets, while total stockholders' equity increased to $4.13 billion Balance Sheet (Unaudited, in thousand USD) | Metric | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Total Assets | $7,105,111 | $7,347,675 | | Current Assets | $272,616 | $636,982 | | Net Natural Gas and Oil Properties | $6,535,097 | $6,421,700 | | Total Liabilities and Stockholders' Equity | $7,105,111 | $7,347,675 | | Current Liabilities | $580,744 | $1,263,247 | | Senior Notes (Excluding Current Portion) | $1,090,607 | $1,089,614 | | Total Stockholders' Equity | $4,126,694 | $3,936,657 | Cash Flows from Operating Activities Net cash provided by operating activities significantly increased to $336 million in Q2 2025 from $149 million in Q2 2024, and to $666 million year-to-date 2025 from $481 million year-to-date 2024, driven by higher net income and changes in working capital Cash Flows from Operating Activities (Unaudited, in thousand USD) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :-------------------------------- | :--------------------- | :--------------------- | :------------------- | :------------------- | | Net Income | $237,578 | $28,704 | $334,630 | $120,842 | | Net Cash Provided by Operating Activities | $336,188 | $148,775 | $666,273 | $480,705 | | Net Change in Working Capital | $43,368 | $(81,339) | $(18,042) | $(53,015) | Non-GAAP Reconciliations Reconciliation of Total Debt to Net Debt Range Resources' net debt (non-GAAP) decreased by 13% from $1.40 billion on December 31, 2024, to $1.22 billion on June 30, 2025, reflecting the company's debt reduction efforts Reconciliation of Total Debt to Net Debt (Unaudited, in thousand USD) | Metric | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | Change (%) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | | Total Reported Debt (Net of Deferred Financing Costs) | $1,211,699 | $1,697,883 | -29% | | Less: Reported Cash and Cash Equivalents | $(134) | $(304,490) | - | | Net Debt (Non-GAAP) | $1,224,866 | $1,404,212 | -13% | Reconciliation of Cash Flow from Operations Before Changes in Working Capital Cash flow from operations before changes in working capital (non-GAAP) significantly increased from $237 million in Q2 2024 to $301 million in Q2 2025, and from $545 million year-to-date 2024 to $698 million year-to-date 2025, indicating strong underlying operational cash generation Reconciliation of Cash Flow from Operations Before Changes in Working Capital (Unaudited, in thousand USD) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :---------------------------------------------------------- | :--------------------- | :--------------------- | :------------------- | :------------------- | | Reported Net Cash Provided by Operating Activities | $336,188 | $148,775 | $666,273 | $480,705 | | Cash Flow from Operations Before Changes in Working Capital (Non-GAAP) | $300,511 | $236,902 | $697,902 | $544,800 | Reconciliation of Natural Gas, NGLs and Oil Sales and Prices This reconciliation details the components of natural gas, NGLs, and oil sales, including the impact of derivative settlements and transportation costs, with the average realized price after hedging and excluding third-party transportation costs increasing by 13% to $3.49 per Mcfe in Q2 2025 Components of Natural Gas, NGLs and Oil Sales (Unaudited, in thousand USD) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | Year-over-Year Change (%) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | Year-over-Year Change (%) | | :------------------------------------------ | :--------------------- | :--------------------- | :------------------------ | :------------------- | :------------------- | :------------------------ | | Natural Gas Sales | $397,955 | $209,652 | 90% | $888,332 | $481,127 | 85% | | NGLs Sales | $238,034 | $228,285 | 4% | $513,688 | $484,361 | 6% | | Oil Sales | $30,649 | $40,513 | -24% | $56,538 | $79,963 | -29% | | Total Reported Natural Gas, NGLs and Oil Sales | $666,638 | $478,450 | 39% | $1,458,558 | $1,045,451 | 40% | Average Prices After Hedging and Excluding Third-Party Transportation Costs (per Mcfe) | Metric | Q2 2025 (per Mcfe) | Q2 2024 (per Mcfe) | Year-over-Year Change (%) | H1 2025 (per Mcfe) | H1 2024 (per Mcfe) | Year-over-Year Change (%) | | :------------------------------------------ | :----------------- | :----------------- | :------------------------ | :----------------- | :----------------- | :------------------------ | | Natural Gas (per Mcf) | $3.13 | $2.47 | 27% | $3.39 | $2.71 | 25% | | NGLs (per bbl) | $23.88 | $24.56 | -3% | $25.80 | $25.41 | 2% | | Oil (per bbl) | $54.22 | $68.12 | -20% | $57.39 | $67.63 | -15% | | Natural Gas Equivalent (per Mcfe) | $3.49 | $3.10 | 13% | $3.75 | $3.32 | 13% | Reconciliation of Income Before Income Taxes Excluding Certain Items Adjusted income before income taxes (non-GAAP) increased by 42% to $205 million in Q2 2025 and by 40% to $506 million year-to-date, excluding the impact of non-cash and special items Reconciliation of Income Before Income Taxes Excluding Certain Items (Unaudited, in thousand USD) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | Year-over-Year Change (%) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | Year-over-Year Change (%) | | :------------------------------------------ | :--------------------- | :--------------------- | :------------------------ | :------------------- | :------------------- | :------------------------ | | Reported Income Before Income Taxes from Operations | $302,042 | $10,010 | 2917% | $411,777 | $120,352 | 242% | | Adjusted Income Before Income Taxes | $204,914 | $144,030 | 42% | $506,326 | $360,811 | 40% | | Net Income Excluding Certain Items | $157,784 | $110,903 | 42% | $389,871 | $277,824 | 40% | | Non-GAAP Diluted Earnings Per Share | $0.66 | $0.46 | 43% | $1.62 | $1.14 | 42% | Reconciliation of Net Income, Excluding Certain Items and Adjusted EPS Net income excluding certain items (non-GAAP) increased by 42% to $158 million in Q2 2025, with adjusted diluted EPS of $0.66, providing a clearer view of core operational profitability by removing the impact of non-recurring or non-cash items Reconciliation of Net Income, Excluding Certain Items and Adjusted EPS (in thousand USD, except per share data) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :------------------------------------------ | :--------------------- | :--------------------- | :------------------- | :------------------- | | Reported Net Income | $237,578 | $28,704 | $334,630 | $120,842 | | Net Income Excluding Certain Items (Non-GAAP) | $157,784 | $110,903 | $389,871 | $277,824 | | Reported Diluted Earnings Per Share | $0.99 | $0.12 | $1.39 | $0.49 | | Diluted Earnings Per Share Excluding Certain Items (Non-GAAP) | $0.66 | $0.46 | $1.62 | $1.14 | Reconciliation of Cash Margin per Mcfe Cash margin (non-GAAP) increased by 27% to $305 million in Q2 2025, with cash margin per Mcfe at $1.53, reflecting an improvement in cash revenue relative to cash expenditures Reconciliation of Cash Margin per Mcfe (Unaudited, in thousand USD, except per unit data) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :------------------------------------------ | :--------------------- | :--------------------- | :------------------- | :------------------- | | Cash Revenue | $732,891 | $641,292 | $1,586,913 | $1,362,462 | | Cash Expenditures | $427,735 | $401,991 | $882,366 | $813,681 | | Cash Margin (Non-GAAP) | $305,156 | $239,301 | $704,547 | $548,781 | | Cash Margin per Mcfe | $1.53 | $1.22 | $1.77 | $1.40 |