Range Resource Corporation (RRC)

Range Resource Corporation – Q1 2025 Financial Analysis

Report Date: 2025-04-28
Period Covered: Quarter ended March 31, 2025

1. Executive Summary

Range Resource Corporation delivered net income of $97.1 million ($0.40 per diluted share) in Q1 2025, up 5.3% from $92.1 million ($0.38) in Q1 2024.
Revenue from sales of natural gas, NGLs and oil (including cash settlements on derivatives) increased 6.9% to $690.6 million. The company generated $330.1 million of operating cash flow, repurchased $675 million of shares and reduced debt marginally, while maintaining a cash balance of $344.6 million and $1.0 billion of undrawn credit capacity.

2. Profit & Loss Analysis

• Total Revenue: $690.6M vs. $645.5M in Q1 2024 (+6.9%)
  • Natural gas & NGLs sales: $791.9M (+39.6%)
  • Oil sales: $84.6M (+42.1%)
  • Derivative fair-value loss: $159.0M vs. $46.6M
  • Brokered natural gas marketing revenue: $54.4M vs. $28.8M
• Operating Expenses: $580.8M vs. $535.1M (+8.5%)
  • Direct operating: $25.4M vs. $22.2M
  • Transportation/gathering/processing: $306.1M vs. $290.9M
  • G&A: $41.7M vs. $43.9M
  • Stock-based comp.: $11.8M vs. $11.5M
• Non-Operating Items:
  • Interest expense decreased to $29.2M from $30.5M
  • Gain on early extinguishment of debt: $3.0M vs. $64.0M in Q1 2024
• Income Tax: $12.7M vs. $18.2M (effective rate benefit from credits and state taxes)
• Net Income: $97.1M vs. $92.1M (+5.3%)

Drivers of Q1 2025 Performance

• Higher realized prices (including derivatives) and modest volume growth (2%) in total production (198.0 MMcfe/day vs. 194.9 MMcfe/day).
• Increased cash settlements on derivatives versus higher mark-to-market losses, reflecting rising commodity prices.
• Tight control on G&A and interest costs.

3. Debt & Liquidity

• Total Debt (net of deferred financing costs): $1,696.5M at March 31, 2025 vs. $1,697.9M at Dec. 31, 2024 (-0.08%).
• Credit Facility: $1.0B committed, $1.641M letters of credit, leaving ~$1.0B available.
• Cash & Equivalents: $344.6M.
• Cash Flow Funding: Operating cash flow fully funded $154.4M of capex; no material draws on the credit facility.

4. Pros & Cons

Pros

• Consistent cash flow generation supports dividends (raised to $0.009/share) and share repurchases ($675M repurchased).
• Strong liquidity and modest leverage with flexible credit facility.
• Commodity hedges mitigate downside and improve cash-flow visibility.

Cons

• Significant mark-to-market derivative losses introduce earnings volatility.
• Exposure to commodity price swings and basis risk despite hedging.
• Infrastructure constraints and market differentials in Appalachian region could pressure realized prices.

Prepared by Financial Analyst

Revenue Breakdown (Q1 2025):

• Natural Gas Sale: $490.4 M (135.96 Bcf)
• NGLs Sale: $275.7 M (9.92 MMbbl)
• Oil Sale: $25.9 M (0.424 MMbbl)
• Brokered Natural Gas Marketing Revenue: $54.4 M
• Derivative Fair-Value (Loss): $(158.96) M

Volume Production (Q1 2025):

• Natural Gas: 1.510 Bcf/day
• NGLs: 110.2 Mbbl/day
• Oil: 4.7 Mbbl/day

Range Resource is positioned for stable mid-term growth, with a cash-flow funded capital program and disciplined cost structure. Liquidity remains robust to pursue opportunistic acquisitions, hedges reset to preserve downside protection. Key challenges include derivative volatility, commodity cycles and regional basis differentials. Future opportunities lie in expanded infrastructure, continued debt reduction and potential dividend growth as commodity markets normalize.