RANGE RESOURCES CORPORATION (NYSE: RRC) today announced that it
has executed a definitive agreement to sell its West Texas Fuhrman
Mascho properties located in Andrews County, Texas to Energen Resources
Corporation (NYSE: EGN) for $182 million. After the transaction closes,
Range plans to monetize certain oil hedges associated with the
properties with a current mark-to-market value of approximately $8
million. The transaction is expected to close in June and is subject to
standard industry closing adjustments.
The properties include Range’s interests in 445 producing wells and 54
water injection wells located on approximately 13,200 acres. Net daily
production from the properties averaged 15.5 Mmcfe in the first quarter
of 2009, comprised of 2,131 barrels of oil and 2.7 million cubic feet of
natural gas. The properties are part of a field that was discovered in
the late 1930’s and acquired by Range in 1996. Range increased
production from the properties by almost seven times, utilizing
waterflood rejuvenation and tighter well spacing. In 2005, Oil and
Gas Investor magazine awarded Range the "Best Field Rejuvenation
Award” for its redevelopment of the field.
Commenting on the announcement, John Pinkerton, Range’s Chairman and
CEO, said, "We believe the Fuhrman property still holds excellent
development potential, and its sale represents a win-win situation for
Range and Energen. We are now directing most of our capital into the
Barnett, Nora and Marcellus Shale plays. Given that Fuhrman’s
development cost and lease operating costs per unit of production are
substantially higher than our Barnett, Nora and Marcellus Shale
properties, our further development of Furhman would likely have been
delayed several years. Energen is focused on Permian Basin properties
and will likely develop Fuhrman faster than Range. Three years ago we
made the decision to begin selling our non-core properties and
redirecting the capital to higher-return projects. As a result, our
technical teams are more focused on our key projects, our cost structure
is lower, our property base has been high graded and we are generating
higher returns on capital expended. We will use the sales proceeds to
maintain our strong balance sheet and to help fund our 2009 and 2010
capital programs.”
RANGE RESOURCES CORPORATION (NYSE: RRC) is an independent oil and
gas company operating in the Southwestern, Appalachian and Gulf Coast
regions of the United States.
Except for historical information, statements made in this release,
including expected closing of the sale, the timing of the closing,
future potential of properties and increased shareholder value 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 Range’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,
environmental risks and other risks and uncertainties set forth in Item
1.A. of Range’s 2008 Annual Report Form 10-K filed with the Securities
and Exchange Commission.
Range undertakes no obligation to
publicly update or revise any forward-looking statements.
Further
information on risks and uncertainties is available in Range’s filings
with the Securities and Exchange Commission, which are incorporated by
reference.
