Range Resources: DUG East Conference & Exhibition L November 4, 2010 L 1

DUG East Conference & Exhibition
John Pinkerton
Chairman & Chief Executive Officer
November 4, 2010
RANGE RESOURCES
DUG East Conference & Exhibition l November 4, 2010 l 1

Why Natural Gas?
CLEAN ABUNDANT
DOMESTIC JOBS

The Shale Gas Revolution
Cody Bakken
Gammon
Mowry Antrim
Baxter-Mancos
Marcellus/
Niobrara
Devonian/Utica
Mancos
Pierre Mulky New Albany

Lewis
Fayetteville
Woodford
Barnett- Floyd-Neal
Woodford Barnett Haynesville
Eagle Ford

Natural Gas in the United States Today
 U.S. is the world’s largest natural gas producer(1)
 U.S. gas resource potential - 1,836 Tcf(2)
 U.S. gas proved reserves - 238 Tcf(2)
 Unconventional resources have dramatically altered

the U.S. gas potential
 U.S. reserve life has increased dramatically
(1) US Department of Energy

(2) Potential Gas Agency, Colorado School of Mines, December 2009

Jobs, Jobs, Jobs
Top 10 States for Natural Gas Jobs

% of Total
State Jobs
Employment
Texas 1,269,130 12.0
Louisiana 266,591 13.7
California 255,214 1.7
Oklahoma 174,519 10.9
Colorado 137,726 5.9
Wyoming 62,306 20.9
Pennsylvania 53,554 0.9
New Mexico 46,062 5.4
Illinois 45,790 0.8
Ohio 40,374 0.8
Source: IHS Global Insight, 2009

Pennsylvania’s History – Drake’s Well
 Discovered 1859
 Long history in
Pennsylvania
 The Commonwealth also

has a significant
industrial past

Range Renz Well #1 – Marcellus Discovery Well
 Discovered 2004
 Marcellus Shale likely the

largest gas field in the
U.S.
 The industry must have a

commitment to “getting it
right”
 Work with all

stakeholders, not against
them

Range Resources – Pioneer of the Marcellus Shale
 Range recognized that the Marcellus Shale had several

characteristics similar to the Barnett Shale
 Marcellus Shale covers roughly 28 million acres
 The Appalachian Basin services the best natural gas

market in the world
 Range has operated in Appalachia for 30+ years
 Range was convinced it could overcome the technical

and operational challenges

Marcellus Milestones in 2010
 Range announced plans to exit 2010 by doubling Marcellus net

production to 180-200 Mmcfe/day – recently increased to 200-
210 Mmcfe/day
 EUR’s increased in the SW to 5 Bcfe at $4 million cost
 First two horizontal wells in Northern PA completed at a seven

day IP rate of 13.6 and 13.3 Mmcf/day
 Infrastructure plan in Northern PA announced. Initial

production expected late 2010
 Marcellus economics recognized by many as #1 or #2,

especially in the wet gas area in SW PA

Marcellus Timeline – Where is Range Today?
 Production target for 2011 is to double again – exiting

2011 at 400+ Mmcfe/day
 Range’s Marcellus resource potential increased to 20-27

Tcfe
 Utica and Upper Devonian Shale wells completed
 Currently recycling 100% of produced water in SW PA
 First company to disclose components of fluid used in

fracing

Well Performance Continues to Improve
Marcellus Zero Time Plot of Gas Only by Well Type – As of June 30, 2010
4,000
Type Curve Gas Liquids

3,500 (BCFE) (BCF) (MBBLS)
2009/2010 Long Laterals 5.0 3.6 239
3,000
4.5 3.2 214
Gross Well Head Gas MCFD
3.5 2.5 167

2,500
2009 Short Laterals

2,000
2008 Avg.
1,500
1,000
500
0
1 51 101 151 201 251 301 351 401 451 501 551
# of Days
2008 (15 wells) 2009 Short Laterals (30 wells)

2009/2010 Long Laterals (45 wells) Type Curve (5.0 BCFE)
Type Curve (4.5 BCFE) Type Curve (3.5 BCFE)

Marcellus – Where is the Industry Today?
 Total Production ~ 1.4 bcf/d
 Total reserve potential - 489(1) Tcf
 100+ rigs running
 Second most active drilling play today
(1) Dr. Terry Engelder, Penn State University-from August 2009 issue of Fort Worth Basin Oil & Gas Magazine

World’s 10 Largest Natural Gas Fields (1)
Field Name Country Recoverable Reserves, Tcf
1 South Pars/North Dome Iran and Qatar 1,235
MARCELLUS UNITED STATES OF AMERICA 489 (2)
2 Urengoy Russia 222
3 Yamburg Russia 138
4 Hassi R’Mel Algeria 123
5 Shtokman Russia 110
6 South Iolotan-Osman Turkmenistan 98
7 Zapolyarnoye Russia 95
8 Hugoton Unites States of America 81
9 Groningen Netherlands 73
10 Bovanenko Russia 70
(1) Rafael Sandres, Global Natural Gas Reserves – A Heuristic Viewpoint, March 2006
(2) Dr. Terry Engelder, Penn State University – from August 2009 issue of Fort Worth Basin Oil & Gas Magazine

What Can It Lead To?
 Marcellus Job Creation and Economic Impact - Penn

State Study (May 2010)
̶ 2010 – 88,000 jobs – $8 billion in value added
̶ 2011 – 111,000 jobs – $10 billion in value added
 Move Towards Energy Independence

̶ Natural gas generated electricity
̶ Fleet conversions to natural gas
̶ Natural Gas Vehicles

Challenges – Perceived and Real
 Environmental – water
consumption, usage, treatment and
protection
 Political – large legislature,

complex state, local governments,
government budget crisis
 Other – industry partnership,

activism, and transparency

Water Requirements Per One Million BTUs
Gallons of Water
Range Mid Point of Range
 Deep Shale Natural Gas 1-6 3
 Nuclear (Uranium ready to use in a power plant) 8-14 11
 Conventional Oil 8-20 14
 Synfuel – coal gasification 11-26 18
 Coal (ready to use in a power plant) 13-32 23
 Oil Shale 22-56 39
 Tar Sands 27-68 47
 Fuel ethanol from corn 2,510 – 29,100 15,805
 Biodiesel from soy 14,000 – 75,000 44,500
Source: Ground Water Protection Counsel and the United States Department of Energy

Water Challenges – Consumptive Use
Millions of gallons per day
 Estimated water use at

twice the expected
peak of 3,000 wells per year
1,680
1,550
268
182 60
Source: USGS, Pennsylvania Water Consumption

Water Challenges – Protection
 Greater efforts to demonstrate

the depths of the Marcellus
Shale versus fresh water
zones
 Perceived concerns on
hydraulic fracturing are not
unique to Pennsylvania, but
the “newness” of the industry
in the Commonwealth has
added new challenges

 99.75% environmental record
according to the DEP
 More than 34,000 wells were drilled

in Pennsylvania over the last 15 years
 The likelihood of negative

groundwater impacts from all
industry related activity is 0.25%,
primarily related to improper design
or setting of casing
 Better wellbore construction can

prevent this
 No ground water pollution or

disruption of underground sources of
drinking water has been attributed to
hydraulic fracturing
According to a June 1, 2009 letter from the Pennsylvania Department of Environmental Protection to the Groundwater Protection Council

 Range and other producers,

through the Marcellus Shale
Coalition have advocated for
modernized well casing regulations
and standards in Pennsylvania
 New rules in the regulatory

process, voluntary efforts to date
 Unique and varying geologic

conditions
 Three million pounds of steel and

concrete to isolate wellbore

Water Challenges – Pre Existing Issues
 Center for Rural Pennsylvania

study concluded more than 40% of
all drinking water wells do not
meet recommended safe drinking
water standards
 Pennsylvania among only states

with no regulations for water well
construction
 Range and others voluntarily

expand pre-test to 2,500 feet and
provide written results
January 2009 : Center for Rural Pennsylvania: Drinking Water Quality in Rural Pennsylvania and the Effect of Management Practices

Pennsylvania Political Challenges – Navigating Legislature
 Size – largest general assembly in the

country (203 H, 50 S)
 Annual Cost of Legislature – $312

million total, second highest to
California at $321 million, New York
third at $213 million; third highest
cost per capita
 Opportunity – Extensive outreach in

Harrisburg, House Natural Gas
Caucus is the second largest

Pennsylvania Local Government – Complex
Municipalities Other Selected Entities
Municipality Type No. Entity Type No.

1st Class Cities 1 Fire Department (total) 2,448
2nd Class Cities 1 Paid 22
2nd Class A Cities 1 Paid/volunteer 72
3rd Class Cities 53 Volunteer 2,354
Boroughs 961 Police Department (total) 1,251
1st Class Townships >300 residents/mi 91 Traditional 1,055
2nd Class Townships 1,456 Regional (total) 196
Towns 1 Consolidated (108 Municipalities) 33
Total Municipalities 2,565 Contractual (163 Municipalities) 163
Total Counties 67 Local Authorities (Active) 1,663

School Districts 501
 Opportunity – model drilling Councils of Governments 87
ordinances, severance tax Planning Commissions (total) (1995) 1,691
revenues, building relationships County 67

Municipal 1,615
Regional 9

Regulatory Environment
Been there, done that – often forgotten that Pennsylvania revamped regulatory
program in 2008
Consistency – still work to be done, but huge leaps in permitting process
Staffing Up – new permit fee structure allows for sustainable regulatory staffing
increases
Opportunity – Pennsylvania recently recognized as exceptional regulatory

program for hydraulic fracturing

Get The Facts Out
 Facts – Let the

science speak for
itself

What will it take?
 The industry must reach out, if we don’t people only

hear one side
 Conducted work shops with leading environmental,

conservation and sportsmen’s groups
 Honest, open and transparent is the only way

What Will It Take? - Transparency
Range Resources Announces Voluntary Disclosure of Marcellus

Shale Hydraulic Fracturing
Canonsburg, Pa., Jul 14, 2010 (Business Wire) --
“Citing the extraordinary potential of responsibly developing natural gas from the Marcellus
Shale, Range Resources Corporation (NYSE: RRC) today announced a voluntary disclosure
initiative of Marcellus Shale Hydraulic fracturing additives. Beginning immediately, Range will
voluntarily submit to the Pennsylvania Department of Environmental Protection (DEP)
additional information about additives used in the process of hydraulic fracturing of natural
gas wells in Pennsylvania operated by Range.
Range’s disclosure initiative will provide regulators, landowners and citizens of the
Commonwealth an accounting of the highly diluted additives used at each well site, along
with their classifications, volumes, dilution factors, and specific and common purposes. The
information will be submitted to the DEP as part of Range’s well completion reports and on
the company website”…

What will it take? – Being Accessible

What will it take? – Training and Outreach

What will it take? – Giving Back

What will it take? – Community Support

Natural Gas – The Energy Solution
North America Energy Consumption
68% for electric

generation and
transportation
(189 Bcfe per day
market)
Transportation Electric Generation

Industrial Residential
Commercial
Natural gas is a clean, domestic, low cost solution for

generating electricity and fueling transportation
Forward-Looking Statements
 Statements concerning future capital expenditures, production volumes, reserve volumes, reserve values, resource
potential, number of development and exploration projects, finding costs, operating costs, overhead costs, cash flow and
earnings are forward-looking statements. These statements are based on assumptions concerning commodity prices,
recompletions and drilling results, lease operating expenses, administrative expenses, interest expense, financing costs
and other costs that management believes are reasonable based on currently available information; however,
management’s assumptions and the Company’s future performance are both subject to a wide range of business risks
and there is no assurance that these results, goals and projections can or will be met. This presentation includes certain
non-GAAP financial measures. Reconciliation and calculation schedules for the non-GAAP financial measures can be
found on our website at www.rangeresources.com.
 The “SEC” permits oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are estimates
that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions. Beginning with year-end reserves for 2009, the SEC
permits the optional disclosure of probable and possible reserves. Range has elected not to disclose the Company’s
probable and possible reserves in its filings with the SEC. Range uses certain broader terms such as "resource
potential," or "unproven resource potential" or "upside" or other descriptions of volumes of resources potentially
recoverable through additional drilling or recovery techniques that may include probable and possible reserves as
defined by the SEC's guidelines. Range has not attempted to distinguish probable and possible reserves from these
broader classifications. The SEC’s rules prohibit us from including in filings with the SEC these broader classifications of
reserves. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves
and accordingly are subject to substantially greater risk of being actually realized. Unproved resource potential refers to
Range's internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or
recovered with additional drilling or recovery techniques and have not been reviewed by independent engineers.
Unproved resource potential does not constitute reserves within the meaning of the Society of Petroleum Engineer's
Petroleum Resource Management System and does not include proved reserves. Area wide unproven, unrisked resource
potential has not been fully risked by Range's management. Actual quantities that may be ultimately recovered from
Range's interests will differ substantially. Factors affecting ultimate recovery include the scope of Range's drilling
program, which will be directly affected by the availability of capital, drilling and production costs, commodity prices,
availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory
approvals, field spacing rules, recoveries of gas in place, length of horizontal laterals, actual drilling results, including
geological and mechanical factors affecting recovery rates and other factors. Estimates of resource potential may change
significantly as development of our resource plays provides additional data.

Range Resources: DUG East Conference & Exhibition L November 4, 2010 L 1

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Range Resources: DUG East Conference & Exhibition L November 4, 2010 L 1

Uploaded by

Copyright:

Available Formats

DUG East Conference & Exhibition

DUG East Conference & Exhibition l November 4, 2010 l 1

DUG East Conference & Exhibition l November 4, 2010 l 2

Pierre Mulky New Albany

DUG East Conference & Exhibition l November 4, 2010 l 3

 U.S. is the world’s largest natural gas producer(1)

 U.S. gas resource potential - 1,836 Tcf(2)

 U.S. gas proved reserves - 238 Tcf(2)

 Unconventional resources have dramatically altered

 U.S. reserve life has increased dramatically

(1) US Department of Energy

DUG East Conference & Exhibition l November 4, 2010 l 4

Top 10 States for Natural Gas Jobs

Source: IHS Global Insight, 2009

DUG East Conference & Exhibition l November 4, 2010 l 5

 The Commonwealth also

DUG East Conference & Exhibition l November 4, 2010 l 6

 Marcellus Shale likely the

 The industry must have a

 Work with all

DUG East Conference & Exhibition l November 4, 2010 l 7

 Range recognized that the Marcellus Shale had several

 Marcellus Shale covers roughly 28 million acres

 The Appalachian Basin services the best natural gas

 Range has operated in Appalachia for 30+ years

 Range was convinced it could overcome the technical

DUG East Conference & Exhibition l November 4, 2010 l 8

 Range announced plans to exit 2010 by doubling Marcellus net

 EUR’s increased in the SW to 5 Bcfe at $4 million cost

 First two horizontal wells in Northern PA completed at a seven

 Infrastructure plan in Northern PA announced. Initial

 Marcellus economics recognized by many as #1 or #2,

DUG East Conference & Exhibition l November 4, 2010 l 9

 Production target for 2011 is to double again – exiting

 Range’s Marcellus resource potential increased to 20-27

 Utica and Upper Devonian Shale wells completed

 Currently recycling 100% of produced water in SW PA

 First company to disclose components of fluid used in

DUG East Conference & Exhibition l November 4, 2010 l 10

Type Curve Gas Liquids

3.5 2.5 167

2009 Short Laterals

2008 (15 wells) 2009 Short Laterals (30 wells)

DUG East Conference & Exhibition l November 4, 2010 l 11

 Total Production ~ 1.4 bcf/d

 Total reserve potential - 489(1) Tcf

 100+ rigs running

 Second most active drilling play today

DUG East Conference & Exhibition l November 4, 2010 l 12

Field Name Country Recoverable Reserves, Tcf

1 South Pars/North Dome Iran and Qatar 1,235

MARCELLUS UNITED STATES OF AMERICA 489 (2)

2 Urengoy Russia 222

3 Yamburg Russia 138

4 Hassi R’Mel Algeria 123

5 Shtokman Russia 110

6 South Iolotan-Osman Turkmenistan 98

8 Hugoton Unites States of America 81

DUG East Conference & Exhibition l November 4, 2010 l 13

 Marcellus Job Creation and Economic Impact - Penn

 Move Towards Energy Independence

DUG East Conference & Exhibition l November 4, 2010 l 14