Attached files
file | filename |
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EXCEL - IDEA: XBRL DOCUMENT - RANGE RESOURCES CORP | Financial_Report.xls |
EX-31.2 - EX-31.2 - RANGE RESOURCES CORP | d70383exv31w2.htm |
EX-23.4 - EX-23.4 - RANGE RESOURCES CORP | d70383exv23w4.htm |
EX-99.2 - EX-99.2 - RANGE RESOURCES CORP | d70383exv99w2.htm |
EX-23.2 - EX-23.2 - RANGE RESOURCES CORP | d70383exv23w2.htm |
EX-23.3 - EX-23.3 - RANGE RESOURCES CORP | d70383exv23w3.htm |
EX-23.1 - EX-23.1 - RANGE RESOURCES CORP | d70383exv23w1.htm |
EX-21.1 - EX-21.1 - RANGE RESOURCES CORP | d70383exv21w1.htm |
EX-31.1 - EX-31.1 - RANGE RESOURCES CORP | d70383exv31w1.htm |
EX-32.2 - EX-32.2 - RANGE RESOURCES CORP | d70383exv32w2.htm |
EX-99.1 - EX-99.1 - RANGE RESOURCES CORP | d70383exv99w1.htm |
EX-32.1 - EX-32.1 - RANGE RESOURCES CORP | d70383exv32w1.htm |
10-K - 10-K - RANGE RESOURCES CORP | d70383e10vk.htm |
EXHIBIT 99.3
February 1, 2010
Range Resources Corporation
100 Throckmorton Street
Suite 1200
Fort Worth, TX 76102
100 Throckmorton Street
Suite 1200
Fort Worth, TX 76102
ATTENTION: Mr. Alan W. Farquharson
SUBJECT: | Reasonableness Opinion of Internally Assigned | |||
Oil and Gas Reserves to the Interests of | ||||
Range Resources Corporation | ||||
In Certain Selected Properties | ||||
Pursuant to the Requirements of the | ||||
Securities and Exchange Commission | ||||
Effective December 31, 2009 | ||||
Job 10.1163 |
At the request of Range Resources Corporation (Range), Wright & Company, Inc. (Wright) has
performed an evaluation to estimate proved oil & gas reserves and associated cash flow and
economics from certain properties to the subject interests. This evaluation was authorized by Mr.
Alan W. Farquharson of Range. Projections of the reserves and cash flow to the evaluated interests
were based on specified economic parameters, operating conditions, and government regulations
considered applicable at the effective date and are pursuant to the financial reporting
requirements of the Securities and Exchange Commission (SEC). Wright was requested to compare its
results to the internal estimates made by Range as of December 31, 2009. It is the understanding
of Wright that the purpose of this evaluation was to opine as to the reasonableness of Ranges
internal projections, in the aggregate, of the selected properties.
The properties evaluated in this report are located in the states of Ohio, Pennsylvania and
Virginia. According to Range the total proved reserves subject to this evaluation and
reasonableness opinion represent approximately 52 percent of Ranges reported Total Proved
reserves.
Range provided to Wright their internal total summaries for the certain evaluated properties
by reserves categories. Range internally estimated net reserves, future net cash flows, and
discounted net cash flows as of December 31, 2009, the results of which are summarized in the
following table:
Total | Total | |||||||||||||||||||
Range Resources | Proved Developed | Proved | Proved | Total | ||||||||||||||||
Corporation | Producing | Nonproducing | Developed | Undeveloped | Proved | |||||||||||||||
SEC Parameters | (PDP) | (PNP) | (PDP & PNP) | (PUD) | (PDP, PNP & PUD) | |||||||||||||||
Net Reserves to the
Evaluated Interests |
||||||||||||||||||||
Oil, Mbbl: |
5,050.524 | 15.330 | 5,065.854 | 6,232.877 | 11,298.731 | |||||||||||||||
Gas, MMcf: |
607,905.126 | 23,901.088 | 631,806.214 | 737,355.923 | 1,369,162.137 | |||||||||||||||
Plant, Mbbl: |
9,547.481 | 193.566 | 9,741.047 | 19,441.828 | 29,182.875 | |||||||||||||||
Gas Equivalent, MMcfe
(6 Mcf = 1 bbl) |
695,493.156 | 25,154.464 | 720,647.620 | 891,404.153 | 1,612,051.773 | |||||||||||||||
Cash Flow (BTAX), M$ |
||||||||||||||||||||
Undiscounted: |
1,854,928.367 | 56,603.823 | 1,911,532.190 | 1,757,615.787 | 3,669,147.977 | |||||||||||||||
Discounted at 10%
Per Annum: |
880,823.278 | 18,838.927 | 899,662.205 | 339,977.323 | 1,239,639.528 |
Wrights projections of the net reserves and cash flow to the evaluated interests in the
certain selected properties are summarized in the following table by reserves category, effective
December 31, 2009.
Total | Total | ||||||||||||||||||||
Proved Developed | Proved | Proved | Total | ||||||||||||||||||
Wright & Company, Inc. | Producing | Nonproducing | Developed | Undeveloped | Proved | ||||||||||||||||
SEC Parameters | (PDP) | (PNP) | (PDP & PNP) | (PUD) | (PDP, PNP & PUD) | ||||||||||||||||
Net Reserves to the
Evaluated Interests |
|||||||||||||||||||||
Oil, Mbbl: |
4,788.367 | 14.411 | 4,802.778 | 5,667.440 | 10,470.218 | ||||||||||||||||
Gas, MMcf: |
592,211.186 | 27,139.702 | 619,350.888 | 736,041.014 | 1,355,391.902 | ||||||||||||||||
Plant, Mbbl: |
9,778.374 | 187.204 | 9,965.578 | 20,552.344 | 30,517.922 | ||||||||||||||||
Gas Equivalent, MMcfe
(6 Mcf = 1 bbl) |
679,611.632 | 28,349.392 | 707,961.024 | 893,359.718 | 1,601,320.742 | ||||||||||||||||
Cash Flow (BTAX), M$ |
|||||||||||||||||||||
Undiscounted: |
1,825,750.035 | 65,804.905 | 1,891,554.940 | 1,742,007.009 | 3,633,561.949 | ||||||||||||||||
Discounted at 10%
Per Annum: |
882,398.207 | 21,523.653 | 903,921.860 | 314,623.883 | 1,218,545.743 |
Proved oil and gas reserves are those quantities of oil and gas which can be estimated
with reasonable certainty to be economically producible under existing economic conditions,
operating methods, and government regulations. As specified by the SEC regulations, when
calculating economic producibility, the base product price must be the 12-month average price,
calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month
within the prior 12-month period. The benchmark base prices used for this evaluation were $3.87
per Million British Thermal Units (MMBtu) for natural gas at Henry Hub, LA, and $60.85 per barrel
for West Texas Intermediate oil at Cushing, OK. These benchmark prices were adjusted for energy
content, quality and basis differential, as appropriate. Prices for oil and gas were held constant
for the life of the properties.
Oil and other liquid hydrocarbons are expressed in thousands of United States (U.S.) barrels
(Mbbl), one barrel equaling 42 U.S. gallons. Gas volumes are expressed in millions of standard
cubic feet (MMcf) at 60 degrees Fahrenheit and at the legal pressure base that prevails in the
state in which the reserves are located. No adjustment of the individual gas volumes to a common
pressure base has been made.
Net income to the evaluated interests is the cash flow after consideration of royalty revenue
payable to others, standard state and county taxes, operating expenses, and investments as
applicable. The cash flow is before federal income tax (BTAX) and excludes consideration of any
encumbrances against the properties if such exist. The cash flow (BTAX) was discounted at an
annual rate of 10.00 percent (PCT) in accordance with the reporting requirements of the SEC.
It should be understood that this reasonableness review does not constitute a complete
reserves study of the certain oil and gas properties of Range. The estimates of reserves contained
in this report were determined by acceptable industry methods and to the level of detail that
Wright deemed appropriate. Where sufficient production history and other data were available,
reserves for producing properties were determined by extrapolation of historical production or
sales trends. Analogy to similar producing properties was used for development projects and for
those properties that lacked sufficient production history to yield a definitive estimate of
reserves. When appropriate, Wright may have also utilized volumetric calculations and log
correlations in the determination of estimated ultimate recovery (EUR). These calculations are
often based upon limited log and/or core analysis data and incomplete reservoir fluid and rock
formation data. Since these limited data must frequently be extrapolated over an assumed drainage
area, subsequent production performance trends or material balance calculations may cause the need
for significant revisions to the estimates of reserves.
Oil and gas reserves were evaluated for the proved developed producing (PDP), proved developed
non-producing (PNP) and proved undeveloped (PUD) reserves categories. The summary classification
of total proved reserves combines the PDP, PNP and PUD categories. In preparing this evaluation,
no attempt has been made to quantify the element of uncertainty associated with any category.
Reserves were assigned to each category as warranted. Wright is not aware of any local, state, or
federal regulations that would preclude Range from continuing to produce from currently active
wells or to fully develop those properties included in this report.
There are significant uncertainties inherent in estimating reserves, future rates of
production, and the timing and amount of future costs. Oil and gas reserves estimates must be
recognized as a subjective process that cannot be measured in an exact way and estimates of others
might differ materially from those of Wright. The accuracy of any reserves estimate is a function
of quantity and quality of available data and of subjective interpretations and judgments. It
should be emphasized that production data subsequent to the date of these estimates, or changes in
the analogous properties, may warrant revisions
of such estimates. Accordingly, reserves estimates
are often different from the quantities of oil and gas that
ultimately are recovered.
All data utilized in the preparation of this report were provided by Range. No inspection of
the properties was made as this was not considered to be within the scope of this evaluation.
Wright has not independently verified the accuracy and completeness of information and data
furnished by Range with respect to ownership interests, oil and gas production or sales, historical
costs of operation and development, product prices, or agreements relating to current and future
operations and sales of production. Wright requested and received detailed information allowing
Wright to check and confirm any calculations provided by Range with regard to product pricing,
appropriate adjustments, lease operating expenses, and capital investments for drilling the
undeveloped locations. Furthermore, if in the course of Wrights examination something came to our
attention that brought into question the validity or sufficiency of any information or data, we did
not rely on such information or data until we had satisfactorily resolved our questions relating
thereto or independently verified such information or data. In accordance with the requirements of
the SEC, all operating costs were held constant for the life of the properties.
It should be noted that neither salvage values nor abandonment costs were included in the
economic parameters in accordance with the instructions of Range. It was assumed that any salvage
value would be directly offset by the cost to abandon the property. Wright has not performed a
detailed study of the abandonment costs or the salvage values and offers no opinion as to Ranges
assumptions.
No consideration was given in this report to potential environmental liabilities that may
exist concerning the properties evaluated. There are no costs included in this evaluation for
potential liability for restoration and to clean up damages, if any, caused by past or future
operating practices.
Based upon the foregoing, in the opinion of Wright, Ranges previously described estimates of
proved reserves are, in the aggregate, reasonable. It is also Wrights opinion that the estimates
have been prepared in accordance with generally accepted industry methods and evaluation principles
as set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserve
Information promulgated by the Society of Petroleum Engineers (SPE Standards).
Wright is an independent petroleum consulting firm founded in 1988 and does not own any
interests in the oil and gas properties covered by this report. No employee, officer, or director
of Wright is an employee, officer, or director of Range; nor does Wright, or any of its employees
have direct financial interest in Range. Neither the employment of nor the compensation received by
Wright is contingent upon the values assigned or the opinions rendered regarding the properties
covered by this report.
This report is solely for the information of Range and for the information and assistance of
its independent public accountants in connection with their review of and report upon the financial
statements of Range and for reporting disclosures as required by the SEC. Notwithstanding, Wright
understands and authorizes that this estimation of reserves may be included along with certain
financial presentations on behalf of Range. This report should not be used, circulated or quoted
for any other purpose without the express written consent of the undersigned, an officer of Wright,
or except as required by law.
The professional qualifications of the petroleum consultants primarily responsible for the
evaluation of the reserves and economics information discussed in this report meet the standards of
Reserves Auditor as defined in the SPE Standards.
It has been a pleasure to serve you by preparing this evaluation. All related data will be
retained in our files and are available for your review.
Very truly yours, Wright & Company, Inc. |
||||
By: | /s/ D. Randall Wright | |||
D. Randall Wright | ||||
President | ||||