Range Resources 4Q14 Earnings Call Notes

Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.

Gas demand expected to increase, production response help bring market into balance

“Gas demand is projected to increase in 2015 from coal plant retirements, gas exports to Mexico and later this year LNG exports. Given the large capital cuts from a large number of companies in our industry which is resulting in a rapidly declining rig count and deferred completions we may see a production response in oil, natural gas and natural gas liquids later this year. The combination of slowing supply growth coupled with increasing demand should help bring the market closer in balanced this year.”

The rock rules

“Number two most importantly and one of my favorite sayings, the rock rules, and this has proven to be the case throughout history across many plays and through multiple commodity price cycles. It simply means that where you find the best reservoir quality, meaning the best rock the economics are substantially better than non-core acreage. And when a company can maintain a low cost structure in the core play that company can sustain its growth at attractive economics across the up and down cycles of commodity prices.”

Range’s core positions

“Range has what we believe is a core position in the Marcellus, Upper Devonian and Utica allowing us to focus capital in those areas with the best economics, whether they are dry, wet or super-rich and continue to achieve production growth in 2015 and beyond.”

A good year for range

“2014 was a record year for Range. Cash flow was over $1 billion for the first time in the company’s history, reserves reached a new record level of 10.3 Tcfe with the Conger-Nora swap we now have operational control over essentially all of our property. We ended the year with lower debt and improved bank facility with plenty of liquidity and no bond maturities until 2020.”