Range Announces Sharply Higher Third Quarter Results

RANGE RESOURCES CORPORATION (NYSE: RRC) today announced third quarter results. Range reported its 23^rd consecutive quarter of sequential production growth as production for the third quarter averaged 388 Mmcfe per day, a 19% increase over the prior year. The increase was driven by exceptional drilling results across the Company’s core properties, which more than offset hurricane-related curtailments. Oil and gas sales, including cash-settled derivatives, a non-GAAP measure, reached $322 million, a 38% increase over the prior year. Cash flow from operations before changes in working capital, a non-GAAP measure, rose 37% to $227 million. Net income increased 384% to $285 million. The reported net income of $285 million included non-cash revenues of $299 million for the mark-to-market accounting on commodity derivatives, $7 million of non-cash stock expense and a $38 million mark-to-market gain in the deferred compensation plan. Adjusting for these and other items, net income comparable to analyst estimates was $80 million, or diluted earnings per share of $0.51, 21% greater than the prior year and $0.02 above analysts’ estimates (see the accompanying tables reconciling these non-GAAP measures).

Commenting on the announcement, John Pinkerton, Range’s Chairman and CEO, said, "Overcoming the impact of the hurricanes, our operations teams did a tremendous job driving up production to achieve our 23^rd consecutive quarter of sequential production growth. We continue to be on track to achieve our 19% production growth target for the year and break through the 400 Mmcfe per day benchmark sometime later this year. Our diversified portfolio of quality drilling projects and our highly focused operating teams continue to be the keys to our success. Importantly, we continue to make solid progress with our emerging plays, building infrastructure, drilling successful delineation wells and increasing our acreage positions. With the announcement earlier today that the first phase of the Marcellus pipeline and gas processing facilities are now operational, we will begin to ramp up production from our Marcellus Shale play. The Marcellus Shale play will enhance our reserve and production efficiency, while further lowering our cost structure. Looking to 2009, we are extremely well positioned to add substantial shareholder value in a low commodity price environment. Our attractive hedge position coupled with the premium prices we receive for the Appalachian production will help combat low prices. Our long reserve life, low cost structure and deep drilling inventory allows us to replace production with roughly one-third of cash flow, leaving the remaining two-thirds of our cash flow to grow reserves and production. Financially, we have maintained a simple capital structure and a strong liquidity position. As a result, we will not have to rely on the capital markets or acquisitions to continue to execute our plan and extend our track record of consistent, double-digit growth.”

For the quarter, production totaled 388 Mmcfe per day, comprised of 316 Mmcf per day of gas (81%) and 12,012 barrels per day of oil and liquids. Wellhead prices, including cash-settled derivatives, averaged $9.02 per mcfe, a 16% increase over the prior-year period. The average gas price was $8.62 per mcf, a 20% increase, and the average oil price rose 5% to $67.40 a barrel.

Direct operating expenses, excluding stock-based compensation for the quarter were $1.00 per mcfe, $0.08 per mcfe higher than the prior-year quarter but $0.05 less than the second quarter of 2008. Exploration expense in the third quarter totaled $18 million, up from $5 million in the prior-year quarter due primarily to seismic expenditures during the quarter of $14 million. General and administrative expenses were $0.54 per mcfe, an increase of $0.09 from the prior-year quarter and $0.05 higher than the second quarter of 2008 due to higher personnel costs, in particular, those incurred in anticipation of the ramp up of Marcellus Shale drilling and production and bad-debt expense. Interest expense rose to $25 million compared to $20 million in the prior-year quarter, due to higher debt outstanding and the refinancing of floating bank debt to longer term fixed rate debt. Depreciation, depletion and amortization rose to $2.27 per mcfe, versus $1.90 in the prior-year quarter due to higher depletion rates and valuation adjustments to the Company’s growing leasehold inventory.

Third quarter development and exploration expenditures totaled $242 million, funding the drilling of 158 (118 net) wells and 6 (5 net) recompletions. A 99% success rate was achieved with 157 (117 net) wells productive. In the first nine months, 417 (308 net) newly drilled wells had been placed on production, with 102 (84 net) in various stages of completion or waiting on pipeline connection. In addition, $367 million was spent on acreage and $7 million on expanding gas gathering systems. Drilling activity in the fourth quarter has 23 rigs currently running.

During the third quarter 2008, Range’s Appalachian division continued to focus on its key coal bed methane, tight gas sand and shale drilling projects in our Nora and Widen fields with 63 wells drilled. In the Nora field in Virginia, the division drilled 34 coal bed methane wells on 60-acre spacing and nine infill wells on 30-acre spacing. In addition, Range drilled 17 tight gas sand wells in Nora during the quarter, achieving above average initial production results. Including the downspacing of coal bed methane and tight gas sand wells, the number of remaining drilling locations in Nora could exceed 6,000. On the horizontal drilling front, Range has completed its fifth horizontal Huron Shale well to date in Nora and plans to drill five additional horizontal Huron Shale wells and two horizontal Berea wells by year-end. Several of these wells will not be completed until early 2009. Of the four horizontal Huron Shale wells that are currently on production, the average cost was $1.7 million per well, while the average initial production rate was 1.1 Mmcfe per day, and they continue to produce in line with expectations. If the Huron Shale program is successful, it will de-risk approximately 1.5 Tcf of net gas reserves to Range.

In the Appalachian Basin Marcellus Shale play, Range is ramping up production, expanding infrastructure and adding acreage in key areas. Our acreage position in the fairway is now approaching 900,000 net acres, which equates to more than 15 to 22 Tcfe of net unrisked resource potential. Of that, 10 to 15 Tcfe are located in the southwest part of the play, with the remainder in the northeast. Range’s average leasehold cost is $404 per acre. For the leasehold acquired in 2008, the average cost per acre is $1,300. The technical team is making tremendous progress in the area of delineation, well performance and cost improvements. Earlier today, we announced that the first phase of the pipeline and gas processing plant infrastructure is now operational, approximately three months sooner than expected. During 2009, additional infrastructure will be installed, greatly expanding capacity. We currently anticipate exiting 2008 with 30 Mmcfe per day of production and ramping it up to a 80 to 100 Mmcfe per day exit rate at year-end 2009.

In the Fort Worth Basin, third quarter activity was highlighted by drilling success in Hood County where a seven-well package averaged 11.4 days from spud to rig release and achieved average initial production of 2.0 Mmcfe per day per well. These wells were drilled and completed for $1.9 million per well. The effort has been extended onto a new 3,000 acre block immediately adjacent where Range plans to actively drill and complete additional wells. The first two wells on this new acreage block have been completed with initial rates averaging 2.6 Mmcf per day. In southwestern Tarrant County, the Company has spud a 250 foot spaced pilot and is participating in a 330 foot spaced development well in northwestern Ellis County.

Third quarter activity for the Midcontinent division included the drilling of 23 (18 net) wells with a 100% success rate. In the Texas Panhandle, an exploratory test yielded production from the St. Louis Lime at a rate of 2.7 (1.9 net) Mmcfe per day. Several offsets are planned for this discovery in addition to continued development of the Granite Wash play.

Conference Call Information

The Company will host a conference call on Thursday, October 23 at 1:00 p.m. ET to review these results. To participate in the call, please dial 877-407-8035 and ask for the Range Resources third quarter financial results conference call. A replay of the call will be available through October 30 at 877-660-6853. The account number is 286 and the conference ID for the replay is 300174. Additional financial and statistical information about the period not included in this release but to be presented in the conference call will be available on our home page at www.rangeresources.com.

A simultaneous webcast of the call may be accessed over the Internet at www.rangeresources.com or www.vcall.com. To listen, please go to either website in time to register and install any necessary software. The webcast will be archived for replay on the Company’s website for 15 days.

In concert with the opening of Pennsylvania’s first large-scale natural gas processing plant for the Marcellus Shale play, Range Resources and MarkWest Energy are co-sponsoring an investor tour of the new facility on Tuesday, October 28, 2008. For further information about the event or to register to attend, please visit the Range Resources website at www.rangeresources.com or call Ronda Palmer at (817) 869-4268. The companies will conduct a pre-tour question and answer presentation covering all previously released information.

Non-GAAP Financial Measures and Supplemental Tables:

Third quarter 2008 results included several non-cash items. A $299 million non-cash mark-to-market gain on unrealized derivatives, a $38 million gain for mark-to-market in the deferred compensation plan and $7 million of non-cash stock compensation expense were recorded. Excluding these items, net income would have been $80 million or $0.52 per share ($0.51 fully diluted). Excluding similar non-cash items from the prior-year quarter, net income would have been $64 million or $0.44 per share ($0.42 fully diluted). By excluding these non-cash items from our earnings, we believe we present our earnings in a manner consistent with the presentation used by analysts in their projection of the Company’s earnings (see accompanying table for calculation of these non-GAAP measures).

Range has reclassified within total revenues its financial reporting of the cash settlement of its commodity derivatives. Under this presentation those hedges considered "effective” under SFAS No. 133 (Appalachia oil and gas hedges and most of Southwest oil hedges) are included in "Oil and gas sales” when settled. For those hedges designated to regions where the historical correlation between NYMEX and regional prices is "non-highly effective” (Southwest gas) or is "volumetric ineffective” due to sale of the underlying reserves (Gulf Coast oil and gas), they are deemed to be "derivatives” and the cash settlements are included in a separate line item shown as "Derivative fair value income (loss)” in Form 10-Q along with the change in mark-to-market valuations of such unrealized derivatives. The Company has provided additional information regarding oil and gas sales in a supplemental table included with this release, which would correspond to amounts shown by analysts for oil and gas sales realized, including cash-settled derivatives.

Under GAAP, due to the sale of all the Company’s Gulf of Mexico properties at the end of the first quarter of 2007, all Gulf of Mexico operations during the first quarter 2007 were reclassified to "Discontinued operations” in the reported GAAP financial statements. The Company has presented a supplemental table which reconciles these reported GAAP financial amounts to the amounts if the operations of the Gulf of Mexico properties for the 2007 period were combined with the amounts from the continuing operations. The Company believes that the combined results, by including the Gulf of Mexico properties, corresponds to the methodology used by professional research analysts and, therefore, are useful in evaluating operational trends of the Company and its actual historical performance relative to other oil and gas producing companies by investors in making investment decisions (see the reconciliation of reported continuing operations under GAAP to the combined operations, a non-GAAP presentation in the accompanying table).

"Cash flow from operations before changes in working capital” as defined in this release represents net cash provided by operations before changes in working capital and exploration expense adjusted for certain non-cash compensation items. Cash flow from operations before changes in working capital is widely accepted by the investment community as a financial indicator of an oil and gas company’s ability to generate cash to internally fund exploration and development activities and to service debt. Cash flow from operations before changes in working capital is also useful because it is widely used by professional research analysts in valuing, comparing, rating and providing investment recommendations of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Cash flow from operations before changes in working capital is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operations, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity. A table is included which reconciles cash flow from operations before changes in working capital as used in this release to net cash provided by operations, its most directly comparable GAAP financial measure. On its website, the Company provides additional comparative information on prior periods.

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 those relating to anticipated reserve potential, production, drilling results, capital expenditures, the number of wells to be drilled, future realized prices and financial results 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 herein by reference.

Range’s internal estimates of reserves may be subject to revision and may be different from estimates by our external reservoir engineers at year-end. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. The Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves, which are estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Range uses the terms "probable” and "possible” reserves, resource "potential” or "upside” or other descriptions of volumes of reserves or resources potentially recoverable through additional drilling or recovery techniques that the SEC’s guidelines strictly prohibit Range from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by Range. Resource potential refers to Range’s internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques. Resource potential does not constitute reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System and does not include any proved reserves. Area wide unrisked resource potential has not been risked by Range’s management. Actual quantities that may be ultimately recovered from Range’s interests will differ substantially. Factors affecting ultimate recovery include the scope of Range’s ongoing drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of resource potential may change significantly as development of our resource plays provides additional data. Investors are urged to consider closely the disclosure in our most recent Annual Report on Form 10-K, available from our website at www.rangeresources.com or by written request to 100 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102. You can also obtain this form by calling the SEC at 1-800-SEC-0330.

(a) See separate oil and gas sales information table.

(b) Costs associated with FASB 123R and restricted stock amortization, which have been reflected in the categories associated with the direct personnel costs, which are combined with the cash costs in the 10-Q.

(c) Included in Derivative fair value income in 10-Q.

(d) Included in Other revenues in the 10-Q.

(e) Reflects the change in the market value of the vested Company stock and, in the prior year, other investments during the period held in the deferred compensation plan.

(a) See separate oil and gas sales information table.

(b) Oil and natural gas liquids are converted to gas equivalents on a basis of six mcf per barrel.

(c) Average prices, including all cash-settled derivatives.

(d) Excludes non-cash stock compensation.

(a) Oil and natural gas liquids are converted to gas equivalents on a basis of six mcf per barrel.

Note: Details as to the Company’s hedges are posted on its website and are updated periodically.