Range Resources Q4 2024: Unpacking Contradictions in Growth Strategy, Dividends, and Production Outlook

These are the key contradictions discussed in Range Resources' latest 2024Q4 earnings call, specifically including: Growth Strategy and Production Ramp-Up, Dividend Growth Expectations, Growth Plans and Hedge Strategy, NGL Price and Market Dynamics, and Production Outlook:



Production and Drilling Efficiency:
- For 2024, Range Resources ran two rigs and one completion crew, achieving capital investments of $654 million and production of approximately 2.18 Bcf equivalent per day.
- Efficiency improvements were evident with the drilling of over 800,000 feet of lateral footage and completion of 3300 stages for the year.
- The increase in efficiency is attributed to long lateral development on contiguous acreage and the use of electric fracturing fleets.

2025 Production and Capital Plan:
- Range plans to maintain an efficient two drilling rig and one frac crew program for 2025, with an all-in capital budget of $650 million to $690 million.
- The plan includes maintenance capital of $530 million, incremental drilling and completions capital of $70 million to $100 million, and $20 million to $30 million for emissions reduction projects.
- The goal is modest production growth to 2.2 Bcfe per day, with a focus on maintaining low capital intensity and increasing inventory for future growth.

Three-Year Outlook and Growth Strategy:
- Range plans to add 400 million cubic feet equivalent of daily production over the next three years, reaching 2.6 Bcfe per day by 2027.
- The company will utilize additional transportation and processing capacity, including a new east coast terminal.
- The strategy is supported by a reinvestment rate below 50% at $3.75 natural gas, allowing for additional growth without compromising returns.

Financial Performance and Capital Returns:
- Range generated $453 million in free cash flow in 2024, repurchased $65 million in shares, and reduced net debt by $172 million.
- The company is positioned to increase its quarterly dividend by $0.01 per share, a 12.5% increase.
- Range's financial strength is attributed to its high-quality inventory, low decline rates, and efficient operations that support consistent cash flow generation.