Range Resources lost $119 million in the second quarter despite cutting back on the number of rigs deployed and the amount of money spent to drill each well.
The Fort Worth-based energy company lost 71 cents per diluted share versus earnings of $171 million, or $1.04 per diluted share, in the second quarter of 2014. The results were released Tuesday after the stock markets had closed.
Revenue for the period was $248 million, a 68 percent decline from last year.
This comes after Range slashed its drilling budget to $870 million this year, a $700 million reduction from 2014. The company is running only 10 rigs, five fewer than at the first of the year. Range plans to end 2015 with only six rigs in the field, the company reported.
Along with the help of lower service costs, Range has reduced its well costs per lateral foot by about 43 percent since 2008, from $4.30 per thousand cubic feet to an estimated $2.42.
At the same time, Range’s wells produced record volumes, averaging 1,373 million cubic feet of gas a day, a 24 percent increase over the same quarter last year. Most of that activity was in the Marcellus Shale in the Northeast.
Even with the challenges presented by the lower prices and revenue, President and CEO Jeff Ventura said he is pleased with the company’s performance.
“Operational results in the second quarter continued to be excellent, as we lowered costs, improved capital efficiencies, exceeded production guidance and achieved great drilling results,” Ventura said in a statement.
“We think this makes Range one of the most capital efficient producers in the industry,” allowing it to “maximize returns throughout any commodity cycle,” Ventura said.
Part of Ventura’s optimism comes from the prospect of completing two pipeline projects this year, including Mariner East 1, which will send products from southwest Pennsylvania to the Marcus Hook export facility near Philadelphia. The other pipeline will move natural gas to the Midwest, where the company believes it will receive better prices.
This year, Range announced it was shutting down its Oklahoma City office and laying off at least 60 employees because of lower prices for oil and natural gas. Range offered to move 30 employees to its Cowtown headquarters.
Previously, Ventura said he was optimistic about the company’s future because Range had lowered its debt and had no bond maturities coming due until 2020.
This article was written by Max B. Baker from Fort Worth Star-Telegram and was legally licensed through the NewsCred publisher network.