RANGE RESOURCES CORPORATION (NYSE: RRC) today announced that the
third phase expansion of the Marcellus Shale natural gas processing
infrastructure has been completed. The third phase expansion includes an
additional 120 Mmcf per day of cryogenic natural gas processing
capacity, 20 miles of additional gathering and residue gas pipelines and
21,000 horsepower of additional compression. The phase three assets are
located in southwestern Pennsylvania and are owned and operated by
MarkWest Liberty Midstream & Resources, L.L.C., a joint venture between
MarkWest Energy Partners, L.P. (NYSE:MWE) and Midstream & Resources, a
private equity fund. MarkWest Liberty has long-term agreements with
Range to provide gathering and processing services and infrastructure
assets.
With the expansion, Range’s total Marcellus Shale infrastructure
capacity is now approximately 180 Mmcf per day. The processing capacity
for high Btu gas is approximately 155 Mmcf per day, while the gathering
capacity for dry gas (gas that does not require processing) is
approximately 25 Mmcf per day. With the completion of the additional
cryogenic gas processing facilities, all high Btu gas will be processed
through cryogenic facilities, and the existing refrigeration facilities
will be removed. The new cryogenic plant will recover approximately
twice the amount of hydrocarbon liquids versus the refrigeration
facilities. Given the high Btu content of Marcellus Shale gas in
southwestern Pennsylvania, coupled with currently strong liquids prices,
the high Btu Marcellus gas price receives a significant uplift. Based on
the current natural gas liquids and gas prices, the gross net back at
the wellhead is approximately $2.25 per Mmbtu greater than dry gas, a
45% uplift. As a result, the economics for drilling high Btu Marcellus
wells is extremely attractive.
Looking forward, additional high Btu gas expansion projects are being
developed to increase Range’s high Btu gas infrastructure capacity to
185 Mmcf per day by the third quarter of 2010 and to more than 300 Mmcf
per day by mid-2011. In addition, Range has several dry gas
infrastructure projects under consideration.
Commenting on the announcement, John Pinkerton, Range’s Chairman and
CEO, said, "MarkWest is doing a terrific job building out gas processing
infrastructure for our Marcellus production in southwestern
Pennsylvania. Range’s Marcellus team is also making significant progress
on all fronts. They have done an excellent job contracting for and
marshalling the construction of pipelines, processing and other needed
infrastructure, while balancing local community needs. In addition, we
are now at zero liquid discharge, and we are recycling and reusing 100%
of the water in our core operating area. Our Marcellus drilling
continues to generate exceptional results, and we have made excellent
headway driving down costs. We are also making great strides in
familiarizing Pennsylvanians, including landowners, elected officials,
regulators and conservation groups on modern, responsible natural gas
development. Range is well positioned to continue to ramp up its
Marcellus production, which in turn provides job opportunities and
economic stimulus for Pennsylvania.”
RANGE RESOURCES CORPORATION (NYSE: RRC) is an independent oil and
gas company operating in the Southwestern and Appalachian regions of the
United States.
Except for historical information, statements made in this release,
including those relating to anticipated production, revenues from
production, capital expenditures, the number of wells to be drilled,
anticipated timing of construction and commencement of operation of new
facilities are forward-looking statements as defined by the Securities
and Exchange Commission.
These statements are based on
assumptions and estimates that management believes are reasonable based
on currently available information; however, management’s assumptions
and the Company’s future performance are subject to a wide range of
business risks and uncertainties and there is no assurance that these
goals and projections can or will be met.
Any number of factors
could cause actual results to differ materially from those in the
forward-looking statements, including, but not limited to, the
volatility of oil and gas prices, the costs and results of drilling and
operations, the timing of production, mechanical and other inherent
risks associated with oil and gas production, weather, the availability
of drilling equipment, changes in interest rates, litigation,
uncertainties about reserve estimates, and environmental risks.
The
Company undertakes no obligation to publicly update or revise any
forward-looking statements.
Further information on risks and
uncertainties is available in the Company’s filings with the Securities
and Exchange Commission, which are incorporated by reference.
