Fort Worth-based Range Resources to sell off West Texas properties

by PegNews wire

FORT WORTH — Range Resources Corporation today announced that it has executed a definitive agreement to sell its West Texas Fuhrman Mascho properties located in Andrews County, Texas to Energen Resources Corporation for $182 million. The transaction is expected to close in June and is subject to standard industry closing adjustments.

The properties include Range’s interests in 445 producing wells and 54 water injection wells located on approximately 13,200 acres. Net daily production from the properties averaged 15.5 Mmcfe in the first quarter of 2009, comprised of 2,131 barrels of oil and 2.7 million cubic feet of natural gas.

The properties are part of a field that was discovered in the late 1930’s and acquired by Range in 1996. Range increased production from the properties by almost seven times, utilizing waterflood rejuvenation and tighter well spacing. In 2005, Oil and Gas Investor magazine awarded Range the “Best Field Rejuvenation Award” for its redevelopment of the field.

Commenting on the announcement, John Pinkerton, Range’s Chairman and CEO, said, “We believe the Fuhrman property still holds excellent development potential, and its sale represents a win-win situation for Range and Energen. We are now directing most of our capital into the Barnett, Nora and Marcellus Shale plays. Given that Fuhrman’s development cost and lease operating costs per unit of production are substantially higher than our Barnett, Nora and Marcellus Shale properties, our further development of Furhman would likely have been delayed several years. Energen is focused on Permian Basin properties and will likely develop Fuhrman faster than Range. Three years ago we made the decision to begin selling our non-core properties and redirecting the capital to higher-return projects. As a result, our technical teams are more focused on our key projects, our cost structure is lower, our property base has been high graded and we are generating higher returns on capital expended. We will use the sales proceeds to maintain our strong balance sheet and to help fund our 2009 and 2010 capital programs.”

Range Resources Corporation is an independent oil and gas company operating in the Southwestern, Appalachian and Gulf Coast regions of the United States.

Source: Range Resources Corporation