Range Resources Corporation

Good day. Welcome to the Range Resources third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. Statements made during this conference call that are not historical facts are forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements. After the speaker's remarks, there will be a question and answer period. At this time, I would like to turn the call over to Mr. Leith Sandoz, SVP, Investor Relations at Range Resources. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining Range's third quarter 2025 earnings call. With me on the call today are Dennis Degner, Chief Executive Officer, and Mark Skuki, Chief Financial Officer. Hopefully, you've had a chance to review the press release and updated investor presentation that we've posted on our website. We may reference certain slides on the call this morning. You'll also find our 10Q on-ranges website under the Investors tab, or you can access it using the SEC's EDGAR system. Please note we'll be referencing certain non-GAAP measures on today's call. Our press release provides reconciliations of these to the most comparable GAAP figures. We've also posted supplemental tables on our website that include realized pricing details by product, along with calculations of EBITDAX, cash margins, and other non-GAAP measures. With that, I'll turn the call over to Dennis.

Thanks, Leif, and thanks to all of you for joining the call today. As we report on the progress made during the third quarter and focus on the execution of the remainder of our 2025 program, the results remain consistent with what we've shared in prior cycles. During the quarter, range executed on our plans safely and efficiently, delivering consistent well results, free cash flow, returns to shareholders, and steady activity levels that support the growth plans we've previously communicated. All-in capital came in at $190 million, while generating production of 2.2 BCF equivalent per day for the quarter. Year to date, we've invested $491 million in capital. putting us right on track with the previously improved guidance of $650 to $680 million for the full year. Our year-to-date operational savings come from several differentiated aspects of our business, which include returning to pad sites for incremental development, utilization of existing infrastructure, extended reach horizontal development, and the team's dedication to continued operational improvements. I'll touch on a few of our operational highlights driving this in just a moment. As we look ahead, our previously announced growth plans will begin to gain visibility in Q4, as strong field level performance is expected to deliver production of approximately 2.3 BCF equivalent per day in the quarter and growing towards 2.6 BCF equivalent per day in 2027, an increase of approximately 20% from current levels. Importantly, range's incremental production will be transported to known end markets, as our depth and quality of inventory allowed range to secure transportation capacity that was going underutilized by others. We believe our plans align well with increasing demand in the Midwest, Gulf Coast, and global LNG markets in the years ahead, while having the flexibility to meet future in-basin demand as well. And lastly, we will add our planned 400 million cubic feet equivalent per day of growth very efficiently with relatively flat annual capital over the next two years and supported by investments in additional work in progress inventory since late 2023. This will keep RANGE's reinvestment rate at the low end of the peer group, allowing significant capital returns to shareholders while growing. Diving into the quarter, consistent with prior quarters, Range operated two horizontal rigs drilling approximately 262,000 lateral feet across 16 laterals, averaging 16,400 feet per well. This adds to Range's planned, drilled, uncompleted inventory and places us on track to exit 2025 with more than 400,000 lateral feet of growth-focused inventory supporting our development plans through 2027. For completions, the team ended the third quarter completing just over 1,000 frac stages, utilizing a combination of our full-time electric fracturing fleet and a spot frac crew for a single pad in Northeast PA that we discussed during the prior call. Completion efficiencies for the third quarter were at nearly 10 frac stages per day across all operations. Supported by a strong KPI-driven focus, efficient logistics, and a look back from prior PAD executions, our Northeast PA operations continue to deliver incredibly efficient results and strong returns utilizing existing infrastructure on our occasional return trips to the area. Cash operating expenses for the third quarter finished at 11 cents per MCFE, firmly within our previously improved guidance for the year. The team continues to see efficiencies within the field, especially when focusing on multi-operational project scheduling to improve production downtime, reduce spending, and maximizing field runtime from the wellhead to the burner tip. Shifting over to marketing, the third quarter of 2025 was an exciting time for U.S. energy marketing, as we saw the commissioning of new NGL export capacity the ramp-up of recently commissioned LNG export capacity, and strong interest in new natural gas supply for power generation within the Appalachian Basin. Highlighting some specifics, starting with natural gas. The U.S. exported record volumes of LNG in the third quarter, as new capacity continued to be commercialized and international demand for clean, reliable American energy remained strong. Three additional LEG projects reached FID in the third quarter, with additional projects recently sanctioned, bringing the year-to-date total to approximately 9 BCF per day of incremental feed gas demand, making this a record-breaking year for FIDs in the U.S. Based on projects under construction, LEG feed gas demand is expected to exceed 30 BCF per day by 2031. more than doubling the export capacity versus current levels. We are confident of the world's strong appetite for U.S. natural gas, as long-term global gas demand is underpinned by rising incomes and population growth. Looking at in-basin opportunities, we continue to be encouraged by early phase activity in Pennsylvania toward gas-fired powder generation data center projects. Numerous projects are progressing and the past few months have provided us with even more conviction that consensus estimates for approximately 2.5 BCF per day of northeastern demand potential from data centers by the end of the decade is becoming more real. We are continuing to make progress on the Fort Cherry joint venture project with Liberty and Imperial announced earlier this year. In addition, ranges in conversations with multiple other potential projects that could benefit from ranges asset location in Southwest PA, our pipe access across the US, our marketing acumen, and importantly, our depth of high quality inventory and financial strength that can support long-term supply agreements that end users are looking for. As we look forward, We believe there will be a clear call for Appalachia to play a key role in supplying U.S. markets with affordable, reliable natural gas supply. And we believe that expanding infrastructure from Appalachia and sourcing more power demand within Appalachia is the most effective way for America to fuel its long-term energy needs. We remain very constructive on the setup for natural gas. with storage levels at or below average and last year in terms of days of supply. And as we move into 2026, a further 4 BCF per day of LNG export capacity is expected to come online, leading to tightening gas marketing fundamentals. Turning to NGLs, similar to our outlook for natural gas, we're encouraged by the fundamental setup for ethane and LPG, Ethane and propane are both expected to see substantial increases in export capacity out of the Gulf Coast into continuing strong international demand. And we expect this to improve NGO pricing relative to WTI in the coming quarters. Specific to range, our geographically advantaged access via exports to the European market continues to support a premium versus the Montbellevue index. We see continued strong demand for Northeastern US LPG, as Europe continues to secure long-term supply from reliable producers. During the quarter, Range once again leveraged its flexible transportation and marketing portfolio to respond to market dynamics and enhance margins. These optimization efforts for Range led to a strong seasonal natural gas price differential, minus 49 cents per MCF versus the 9X index, coupled with a continued premium on our NGLs. And we've improved our full-year guidance accordingly. The future of natural gas and NGLs is strong, with significant demand continuing to materialize in the near and medium term, both globally and within Appalachia. Range is poised to help meet this future demand while creating outsized value for shareholders with the strongest financial position in company history, a large contiguous inventory measured in decades, and a proven track record of delivering through-cycle returns of capital, all investing in the long-term success and the optionality of the business. I'll now turn it over to Mark to discuss the financials. Thanks, Dennis. The first nine months of 2025 have underscored the stability and profitability of Range's business. During this period, NYMEX natural gas prices averaged $3.39, while Range achieved an average realized price of $3.59 per unit of production, a 20-cent premium created by our diversified commodity mix and sales strategy. Strong pricing realizations combined with low full-cycle costs that provided range the ability to continue progress along our three-year growth plan while returning capital to shareholders. Year-to-date, we have repurchased $177 million in shares, paid dividends of nearly $65 million, while reducing net debt $175 million since year-end. Each of these actions reinforcing our commitment to delivering on our stated capital allocation priorities. While front-month gas prices fluctuate, our business model, sitting atop a high-quality resource base, has consistently generated free cash flow, enabling capital allocation options of executing a market-driven, growth-oriented operational plan alongside current capital returns to investors. Range is proving the free cash flow resilience of its business and enhancing that resilience through targeted capital investments. The specific attributes of Range's business that provide a stable base and enable through cycle investments and returns include a high quality, long duration inventory that enables a low reinvestment rate, a strong balance sheet to allow value capturing opportunistic investments, a diverse portfolio of natural gas and natural gas liquids transportation that links Range to customers in key U.S. and global markets, delivering roughly 90% of revenue from outside Appalachia. While building cost-effective duck inventory to meet future demand, our opportunistic investments and returns in 2025 have grown from prior years in the form of share buybacks and dividends, given the strength of Range's balance sheet. In other words, while investing at a maintenance plus level, we are generating healthy free cash flow and diligently redeploying that capital to harvest value from Ranges Resource Base. As the U.S. and global natural gas markets continue to integrate with commissioning of new LNG facilities alongside substantial domestic demand growth, primarily from electricity, we believe Ranges' long-life, low-cost inventory creates enormous option value to play an integral role as a key supplier. Our durable free cash flow, evidenced through cycles in recent years, Position range to consistently deliver value to its shareholders. Dennis, back to you. Thanks, Mark. Range's year-to-date results reflect a consistent theme, strong operational performance against our stated multi-year plan, consistent free cash flow generation, and prudent allocation of that cash flow, bouncing returns of capital, balance sheet strength, and the optimal development of our world-class asset base. You've heard us state this before, but we continue to believe the results communicated today showcase that Range's business is in the best place in company history, having de-risked a high-quality inventory measured in decades and translated that into a business capable of generating significant free cash flow through cycles. With that, let's open the line for questions.