Range Resources to sell Pennsylvania assets

Independent producer Range Resources wants to sell some Pennsylvania assets by the end of the year to lower debt and boost its investment rating.

The company is looking to sell assets in the northeast and southeast portions of the state. Range at the beginning of the third quarter closed on a $23mn sale of assets in the midcontinent representing about 11mn cf/d (311,300 m³/d) of production. The company is now looking to make larger divestitures from its Appalachian acreage.

Earlier this year Range said its assets in Louisiana's Terryville complex were less productive than expected. The company then said it would look at selling some of its "underappreciated inventory," while declining to say if that inventory would be located in Louisiana or elsewhere.

Range is focused on its Pennsylvania acreage but will not rule out a Louisiana sale, chief executive Jeffrey Ventura said.

"When projects are not competitive, then we tend to sell them," Ventura said. On Terryville, "we will look at how those returns are either later this year or early next year and make that decision."

The company has only one rig in the Terryville and one fracturing crew on call. Range completed four wells in Louisiana during the second quarter, with two wells scheduled to begin flowing this quarter.

Range's Marcellus activity has been more robust, with 39 wells brought on line in the second quarter, 28 of which were located in the dry-gas area.

Range's total output topped 2.2 Bcf/d during the second quarter, up by 13pc from a year earlier, and in line with the company's goal of 11pc year-over-year growth for 2018.

Range reached its production goals for the quarter despite a 7 June rupture and subsequent force majeure on Columbia Gas Transmission's Leach XPress pipeline, which resulted in about 1.5 Bcf/d of gas being diverted back into the Appalachian shale region until 15 July.

Those diverted flows included about 289mn cf/d of Range's production, but the company's marketers were able to reroute its output via other transportation options and customer outlets in the company's portfolio, selling more gas in Appalachia to minimize the effects of the shut line.

The producer's sales differentials are improving compared with its expectations earlier this year, as more gas is transported to markets with high demand and as prices in Appalachia improve. Range's gas sales discount to the Henry Hub narrowed to about 10¢/mmBtu in the second quarter, compared with a 32¢/mmBtu discount a year earlier.

"These benefits are being realized as southwest Appalachian gas markets start to benefit from new pipeline capacity after years of constraint," Ventura said.