Range Resources expects by the end of the year it will be able to ship 70pc of the natural gas it produces to higher-priced markets in areas outside the Appalachian shale, executives said during an earnings call today.
Texas Eastern Transmission's 628mn cf/d (18mn m/d) Gulf Markets expansion project will allow the company to ship more production to the Gulf coast later this year. With other projects coming on line in late 2017 Range will be able to sell more than 80pc of its gas outside the shale.
The company is expecting better pricing and a positive impact to its sales portfolio when the majority of its gas gets out of Appalachia, chief operating officer Ray Walker said.
The Marcellus will continue to be the producer's main focus this year, as it has determined that developing the Utica costs almost two-and-a-half times what developing its Marcellus acreage costs. But the company said its third dry-gas Utica well is performing better than its first two wells and appears to be one of the top wells in the entire Utica play. The company currently expects the well to put in sales of about 12mn cf/d.
"It is great to have 400,000 net acres of dry Utica potential beneath our Marcellus acreage, which gives us options down the road," chief executive Jeff Ventura said. "The deciding factor for Range will ultimately be: what are the economics of the Utica versus the Marcellus."
During the first quarter the company produced 1.38 Bcf/d of natural gas equivalent (Bcfe/d), up by 4pc from the corresponding year-earlier period, with liquids consisting of 33pc of that output. Range's guidance for the second quarter is 1.41 Bcfe/d.
Realized sales prices dropped by 45pc in the first quarter compared with the fourth quarter of 2015, which was a main driver of the company reporting a first quarter loss of $92mn.
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