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Range Resources’ Free Cash Flow in 1Q18

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Range Resources’ 1Q18 operating cash flow

In 1Q18, Range Resources (RRC) reported operating cash flow of ~$371 million, beating analysts’ expectation of ~$312 million. RRC’s 1Q18 operating cash flow was ~64% higher than the ~$226 million it generated in 1Q17 and ~72% higher than the ~$216 million it generated in 4Q17. Range Resources’ cash flow increase can be attributed to higher production and higher realized prices, which we discussed in Parts 2 and 3.

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Range Resources’ free cash flow in 1Q18

In 1Q18, Range Resources had ~$334 million in capital expenditure, meaning RRC’s free cash flow was positive, at ~$37 million. Peer Southwestern Energy (SWN) reported ~$62 million in free cash flow in 1Q18, with operating cash flow of ~$364 million and capital expenditure of ~$302 million.

Range Resources’ 2018 capital expenditure guidance

In fiscal 2018, Range Resources expects capital expenditure of ~$941 million, much lower than its 2017 capital expenditure of ~$1.3 billion. In 2018, RRC plans to use its free cash flow and asset sales to reduce its debt. Range Resources plans to allocate ~85% of its capital budget to the Appalachia region and the remaining ~15% to North Louisiana. RRC’s 2018 capital budget includes ~$857.4 million for drilling and recompletion activities.

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