Range Resources (NYSE:RRC) saw a large increase in oil and natural gas liquids production in the third quarter of 2010, as the company benefited from a shift in development to these types of plays.
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Range Resources reported average production of 503 million cubic feet equivalent per day during the third quarter of 2010, a 15% increase from the same quarter of 2009. Range Resources also saw a shift in production away from natural gas, with 77% of total company production here during the quarter, compared to 84% in the third quarter of 2009.
The company's production of oil and natural gas liquids increased 62% in the third quarter of 2010 compared to last year, as the company advanced development of its properties in the Permian Basin and other areas.
Range Resources also announced that the company is putting its Barnett Shale properties up for sale. The company has 360 producing wells on 53,000 net acres, and expects its net production from the Barnett Shale to average from 120 to 130 million cubic feet equivalent per day during the fourth quarter of 2010. This sale will help Range Resources fund its capital plan in 2011, and assuage fears about a possible dilutive equity offering.
In the Marcellus Shale, Range Resources exited the quarter producing 191 million cubic feet equivalent per day, or about 35% of total company production. Range Resources has shifted much of its development of this popular play to areas in southwestern Pennsylvania where wells have high proportions of oil and natural gas liquids.
Range Resources brought 18 wells onto sales during the quarter, with a 7 day average production rate of 8.5 million cubic feet equivalent per day. The company also has another 23 wells in inventory that are already drilled and awaiting completion.
Another large operator in the Marcellus Shale is CONSOL Energy (NYSE:CNX) which has 750,000 net acres that are prospective for the play. The company plans to grow production by a 20% compound annual growth rate (CAGR) through 2015.
Range Resources has also pushed oil and natural gas liquids development in other parts of its portfolio. In West Texas, Range Resources reported four wells into the Wolfcamp and Strawn formations, with liquids production from these wells ranging from 80% to 92%.
In the Woodford Shale, the company reported two wells with initial production of 1,514 and 1,176 BOE per day. Production from these wells was 70% liquids. Another company involved with the Woodford Shale is Cimarex Energy (NYSE:XEC), which has drilled 57 gross wells in the Cana Woodford Shale during the first nine months of the year.
Range Resources also reported a completion into a new Mississippian play in Oklahoma. Sixty three percent of the production from this well was composed of liquids, and the well came in with an initial production rate of 410 BOE per day.
Sandridge Energy (NYSE:SD) has 300,000 net acres exposed to this play, and has drilled more than two dozen wells here. The company reported that production from wells here are composed 50% of oil.
Range Resources continued to rapidly grow its production during the third quarter of 2010, and shifted ever so slightly away from natural gas towards oil and liquids, as the company moved to develop plays in the Permian Basin and other areas. (For related reading, take a look at How Does Crude Oil Affect Gas Prices?)
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