Range Resources’ production mix
As seen in the below chart, for 3Q15, Range Resources’ (RRC) production mix was ~73% natural gas, ~23% natural gas liquids, and only ~4% crude oil. This means that RRC is mainly a natural gas producer.
Range Resources’ total liquids production comes in at ~27%. Typically, upstream companies with more liquids production have better operating margins.
RRC’s production mix trend
In 3Q15, Range Resources’ (RRC) natural gas percentage in its production mix increased by ~8% when compared with 3Q14.
Since 1Q11, RRC’s natural gas percentage in its production mix oscillated between ~65%–80%. RRC’s natural gas percentage in its production mix averaged around 74% during the same period.
RRC’s realized prices
Including the effect of hedges, Range Resources’ average realized natural gas price in 3Q15 was $2.77 per Mcf (thousand cubic feet), down ~23% from $3.63 per Mcf in 3Q14.
For 3Q15, RRC’s average realized price for natural gas liquids production decreased by ~58% to $9.45 per barrel compared to $22.53 per barrel for the same period in 2014.
For 3Q15, Range Resources’ average realized price for crude oil production decreased by ~3% to $76.25 per barrel compared to $78.66 per barrel for the same period in 2014.
RRC’s natural gas realized prices benefited from its gains on commodity hedges. We will study RRC’s hedges in the next article.