Range Resources Corp. executives said the company was not looking for any merger and acquisition deals in response to rumors that Pioneer Natural Resources Co. was considering buying the Marcellus Shale driller.
"The good news there is Pioneer confirmed their position that they're not considering a deal," Range CEO Jeffrey Ventura said on a Feb. 28 earnings call. "We're in a great position where we don't need to pursue any sort of M&A."
On Feb. 24, Reuters reported that Pioneer had said it was not pursuing any mergers, in response to a Bloomberg News story that said the oil and gas company was thinking about acquiring Range.
The company will also stick to its hedging and debt reduction plans in the near future, Ventura said. "Looking forward into 2023 and 2024, the natural gas market is in a different place, but our hedge program is once again positioned for success," the CEO said. "As a reminder, our priority remains further improving the balance sheet to within our stated target range of $1 billion to $1.5 billion net debt, which we have the potential to reach in coming months based on recent strip pricing," CFO Mark Scucchi said.
Even with low natural gas prices, Range Resources is still able to generate favorable levels of free cash flow, Scucchi said.
"We're coming into this market where prices may be softer this year, but we're still generating extremely competitive returns and are able to reduce debt and return capital to shareholders," Scucchi said. "But all that being said, under virtually any reasonable pricing scenario, we've got a variety of scenarios down to $2.50."
As of Feb. 20, NYMEX gas futures contract prices were not expected to go above $5/MMBtu through 2024, according to S&P Global Market Intelligence.
Pointing to indicators of gas demand, Range COO Dennis Degner cited the restart of Freeport LNG Development LP's liquefied natural gas export terminal and the next wave of LNG export facilities.
"You've got Freeport LNG now starting to see feedgas come through the facility and ships start to leave the docks," Degner said. "And then we've, of course, got the next wave of LNG that will be coming online starting sometime in the balance of 2024."
In a Feb. 27 earnings release, Range reported net income of $814.2 million for the fourth quarter of 2022, compared to $891.4 million in the same period in 2021. It reported net income of $1.18 billion for the full-year 2022, compared to $411.8 million in 2021.
The shale gas driller produced 1.52 Bcf/d of natural gas in the fourth quarter of 2022, less than expected, down from the 1.53 Bcf/d of natural gas per day produced in the fourth quarter of 2021, according to the earnings release. Range reported an average natural gas price, excluding derivative settlements and before third-party transportation costs, of $5.52/Mcf for the quarter ending Dec. 31, 2022, up from the average natural gas price of $5.27/Mcf in the same quarter in 2021.
As of market close Feb. 27, Range Resources' stock has done better than the S&P 500 year over year.