Range Resources hikes capital spending

Ray Tyson

Exploration and production independent Range Resources plans to spend $254 million on capital projects in 2005, a hefty 44 percent increase over 2004 levels, the company said Jan. 11.The increase in spending reflects opportunities generated by last year’s drilling and property acquisitions, the company said. Roughly 60 percent of the increase relates to developing properties acquired in 2004.

“In total, we expect that reserves will nearly double to over 1.1 trillion cubic feet of gas equivalent,” Range President John Pinkerton said, adding that about 80 percent of this year’s spending would be financed with excess cash flow.

He said excess cash flow also may be used to finance future acquisitions, increase capital expenditures, reduce debt or to repurchase company stock.

The 2005 budget specifically includes $212 million for drilling and well re-completions, $30 million for land and seismic studies and $12 million for the expansion and enhancement of gathering systems and facilities.

In 2005, Range said it expects to drill 787 gross wells and to undertake 75 gross well re-completions. About 46 percent of the 2005 budget is earmarked for the Appalachian region, with 43 percent going to the Southwest region, which includes the Permian Basin, the Mid-continent and East Texas. The remaining 11 percent will go to onshore Gulf Coast and the Gulf of Mexico, the company said.