Range Resources (RRC) Gets Approval To Spud Trinidad Well

Independent oil and gas company Range Resources Corp. (NYSE:RRC) announced that it has received approval from the regulatory bodies in Trinidad to spud the MD 51-2 development well. The directional well would be drilled to a total depth of 3,900 feet to test the Middle and Upper Cruse sands. The initial log evaluation identified multiple hydrocarbon bearing zones, with an estimated net pay of over 140 feet.

The company expects to spud MD 51-2 in Jul 2016, with production testing operations scheduled to be performed when all drilling operations on the pad area are completed. This is the second of a six well drilling program which Range Resources has planned for 2016. The remaining scheduled wells include two development wells in Morne Diablo, one development well in Beach Marcelle and one exploration well in the Guayaguayare block.

Range Resources’ diversified asset portfolio is spread between low-risk/long reserve-life Appalachian assets and large-volume/rapid-payout Gulf Coast properties. The company has an impressive inventory in the Marcellus Shale, one of the prominent emerging shale plays in the U.S. Lower 48. The company is advantageously positioned to benefit in the long run from these projects. Given its dominant position in the Marcellus Shale play and its continuous endeavor to control costs, we believe that Range Resources will be capable of long-term shareholder value creation.

For the second quarter, the company estimates production of 1.410 billion cubic feet equivalent (Bcfe) per day, of which liquids are expected in the 32–35% range. The company anticipates direct operating expenses in the range of $0.22–$0.23 per Mcfe. Transportation, gathering and compression expenses are expected in the range of $1.03–$1.05 per Mcfe, while exploration expenses are projected in the $5–$7 million range.

Currently, Range Resources carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are CVR Refining, LP (NYSE:CVRR) , FutureFuel Corp. (NYSE:FF) and ReneSola Ltd. (NYSE:SOL) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).