Range Announces Third Quarter Results

October 21, 2009 7:08 PM EDT

FORT WORTH, Texas--(BUSINESS WIRE)-- RANGE RESOURCES CORPORATION (NYSE: RRC) today announced third quarter financial and operating results. Natural gas and oil production averaged 437 Mmcfe per day, representing a record high for Range and a 13% increase over third quarter 2008. This represents Range's 27th consecutive quarter of sequential production growth and was achieved despite losing 15 Mmcfe per day of production due to asset sales, which closed on June 30, 2009. While production increased 13%, realized prices fell 30% compared to the same period in 2008. Range's average realized price (including all derivative settlements) for oil and gas was $6.35 per mcfe in third quarter 2009, compared to $9.02 per mcfe in the third quarter of 2008. This compares to average price realizations of $6.18 per mcfe for second quarter 2009. As a result, oil and gas sales (including cash-settled derivatives a non-GAAP measure reconciled in the attached tables), totaled $255 million, a 21% decrease compared to third quarter 2008. For the quarter, Range reported, for GAAP purposes, a loss of $29.8 million, which included a non-cash mark-to-market hedging loss of $53 million. Diluted GAAP earnings (loss) per share was $(0.19) per share compared to $1.81 per share in third quarter 2008. Adjusting for certain non-cash items, net income comparable to analysts' estimates (a non-GAAP measure reconciled in the attached tables) would have been $41 million compared to $82.8 million in third quarter 2008 with the most significant difference being realized gas prices between the two periods. Diluted earnings per share using net income comparable to analysts' estimates would have been $0.26 in third quarter of 2009 and $0.53 in third quarter 2008. Cash flow from operations before changes in working capital (a non-GAAP measure reconciled in the tables attached) declined 25% from the same period in 2008 to $171 million. Adjusted earnings and cash flow both exceeded the average analysts' estimates. (See the accompanying tables reconciling the non-GAAP measures discussed in this release to the most directly comparable GAAP measures.)

Commenting on the announcement, John H. Pinkerton, Range's Chairman and CEO, said, "While our financial results suffered from lower commodity prices, our operating results were the best in our Company's history. Despite losing 15 Mmcfe per day at the close of the second quarter due to asset sales, we were able to more than overcome the loss and post our 27th consecutive quarter of sequential production growth in the third quarter. The production increase was driven by the terrific results of our drilling program, as we have not made a producing property acquisition in nearly two years. The impact of selling higher cost properties, combined with lower service costs and increasing production in our core areas with low operating costs helped us drive down operating costs by 25% per mcfe. All of this was accomplished while maintaining a capital spending program that was less than cash flow, allowing us to protect and strengthen our financial position. The third quarter results are an exciting reflection of the progress we have made in high grading our drilling inventory and the continued focus on our low-cost structure. Our key projects, and in particular the Marcellus Shale play, are having a profound impact on Range Resources. As a result, we are extremely well-positioned to continue to provide low-cost, per-share growth for our shareholders, even in this period of low natural gas prices."

Financial Discussion -

(Excludes non-cash mark-to-market and non-cash stock-based compensation items shown separately in attached tables.)

Direct operating expenses for the quarter were $0.75 per mcfe, a 25% decrease compared to $1.00 in the third quarter of 2008 and a 13% decrease compared to $0.86 in the second quarter of 2009. Production taxes were $0.19 per mcfe, a 56% decline versus third quarter 2008 due to lower commodity prices and level with the $0.19 per mcfe of taxes in second quarter 2009. Exploration expense in the third quarter totaled $10 million, down 44% from $18 million in the same period of 2008 due primarily to lower seismic expenses. General and administrative expenses were $0.57 per mcfe, an increase of $0.03 per mcfe from the prior-year quarter and $0.06 per mcfe higher than second quarter 2009. The increase was due primarily to one-time charges associated with closing our Houston office and an allowance for bad debt. Interest expense rose to $31 million compared to $25 million in third quarter 2008, primarily due to the replacement of short-term floating rate bank debt with long-term fixed rate subordinated notes in the second quarter of 2009. Depreciation, depletion and amortization averaged $2.42 per mcfe, versus $2.15 per mcfe in the third quarter of 2008 as of result of the changing mix of production for the various cost centers. Third quarter lease abandonment and impairment expense was $24 million compared to $5 million in the third quarter of 2008 as Range elected not to renew certain leases, including those outside the core of our North Texas Barnett Shale play and certain shallow, tight gas sand leases in Appalachia.

Third quarter development expenditures of $143 million funded the drilling of 128 (76.9 net) wells and no recompletions. A 100% success rate was achieved. For the first nine months of 2009, 297 (186.5 net) wells have been successfully drilled and are now on production, while 76 (50.0 net) wells are currently in various stages of completion or waiting on pipeline connection. Third quarter cash capital expenditures totaled $167 million. Third quarter cash flow of $171 million was sufficient to fund all of the cash capital expenditures for the quarter. For the year, cash flow and the proceeds from already completed asset sales are expected to fully fund capital expenditures. For the fourth quarter of 2009, Range has approximately two-thirds of its gas production hedged at an average floor price of $7.79 and an average cap price of $8.53. Range has hedged 53% of its first half 2010 gas production at a $5.50 floor and a $7.45 cap and 42% of its second half 2010 gas production at a $5.59 floor and a $7.50 cap. Details of the hedge positions are posted on the Range's website at www.rangeresources.com.

Due to the drilling success and funds available from already completed asset sales, Range's Board of Directors has increased the 2009 capital budget from $700 million to $740 million. The increase will provide funds to acquire additional leases in areas where we have had drilling success this year. While capital expenditures were increased 6%, the 2009 production growth target was increased from 10% to 13%, a 30% increase.

Operational Discussion -

Range is currently running 15 rigs versus 23 rigs at this time last year. During the third quarter, the Marcellus Shale division continued to make excellent progress. The Marcellus Division is continuing to delineate and de-risk its large land position. We now have two rigs in northeast Pennsylvania in Lycoming County drilling two horizontal wells offsetting our high-rate vertical wells. We expect initial results from these two wells by early next year. We also plan to drill a Utica Shale horizontal and an upper Devonian horizontal before year-end. Results of these two wells should be available by early first quarter 2010.

Marcellus Shale production is on plan and now exceeds 80 Mmcfe per day net and is expected to approach the higher end of the previously increased target of 90 - 100 Mmcfe per day net by year-end 2009. From inception, Range has drilled 77 horizontal Marcellus Shale wells, of which 60 have been completed and 54 are on production. The Company expects to drill and case approximately 20 additional horizontal wells in the Marcellus Shale play during the fourth quarter 2009 and carry over approximately 20 for completion in 2010. The Marcellus division is currently running a total of five horizontal rigs. We anticipate entering 2010 with six custom-built horizontal rigs.

The build-out of the Marcellus midstream infrastructure in southwest Pennsylvania is progressing as scheduled. By December 2009 or January 2010, gross cryogenic processing capacity is expected to increase to 155 Mmcf per day. An additional 30 Mmcf per day of processing capacity is expected to be added in mid-2010 and another 150 Mmcf per day has been ordered for start-up in mid-2011, increasing gross cryogenic processing capacity to more than 300 Mmcf per day. The current 65 Mmcf per day refrigeration processing is expected to be suspended during 2010 as the new cryogenic processing is brought on.

The Southwest division also delivered strong drilling results in the quarter. Production in the Barnett averaged 123 Mmcfe net per day during the third quarter and is currently producing approximately 130 Mmcfe net per day. The highlight of the quarter has been the completion of eight wells in southern Tarrant County for a combined production rate of 32 (20.4 net) Mmcfe per day. Also in Hood County, Range's Barnett team completed four wells for a combined rate of 8 (6.0 net) Mmcfe per day.

During the third quarter 2009, Range's Appalachian division continued to focus on its key coal bed methane, shale and tight gas sand drilling projects in the Nora area of Virginia. During the quarter, Range drilled five horizontal Huron Shale wells, two horizontal Big Lime wells and one horizontal Berea well. Year-to-date, 15 horizontal wells have been completed in these three target zones, of which 10 are currently online and producing on par with expectations. In addition, during the third quarter of 2009, 71 coal bed methane and 20 vertical tight gas sand wells were drilled in the Nora field.

Conference Call Information

A conference call to review the third quarter financial results is scheduled on Thursday, October 22 at 1:00 p.m. ET. To participate in the call, please dial 877-407-0778 and ask for the Range Resources third quarter 2009 financial results conference call. A replay of the call will be available through October 28. To access the phone replay dial 877-660-6853. The account number is 286 and the conference ID is 335439. Additional financial and statistical information about the period not included in this release but to be presented in the conference call will be available on our home page at www.rangeresources.com.

A simultaneous webcast of the call may be accessed over the Internet at www.rangeresources.com or www.vcall.com. To listen, please go to either website in time to register and install any necessary software. The webcast will be archived for replay on Range's website for 15 days.

Non-GAAP Measures and Supplemental Tables:

Net Income Comparable To Analysts' Estimates

Third quarter 2009 results included several non-cash items: a $54 million non-cash mark-to-market loss on unrealized derivatives, a $24 million impairment of unproved properties, a $16 million expense recorded for the mark-to-market in the deferred compensation plan, $10 million of non-cash stock compensation expense and $840,000 associated with closing the Houston office. Excluding these items, net income would have been $41 million or $0.27 per share ($0.26 fully diluted). This compares favorably to average analysts' estimates of $0.22 per share. Excluding similar non-cash items from the third quarter of 2008, net income would have been $82.8 million or $0.54 per share ($0.53 fully diluted). By excluding these non-cash items from our earnings, we believe we present our earnings in a manner consistent with the presentation used by analysts in their projection of Range's earnings. A supplemental table is included with this release which reconciles these non-GAAP measures to the most directly comparable GAAP measures.

Cash Flow From Operations Before Changes In Working Capital

"Cash flow from operations before changes in working capital" used in this release represents net cash provided by operations before changes in working capital and exploration expense adjusted for certain non-cash compensation items. Cash flow from operations before changes in working capital is widely accepted by the investment community as a financial indicator of an oil and gas company's ability to generate cash to internally fund exploration and development activities and to service debt. Cash flow from operations before changes in working capital is also useful because it is widely used by professional research analysts in valuing, comparing, rating and providing investment recommendations of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Cash flow from operations before changes in working capital is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operations, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity. A supplemental table is included which reconciles net cash provided by operations to cash flow from operations before changes in working capital as used in this release. On its website, Range provides additional comparative information on prior periods.

Hedging and Derivatives

In this news release, Range has reclassified within total revenues its financial reporting of the cash settlement of its commodity derivatives. Under this presentation those hedges considered "effective" under the derivatives and hedging topic of the Accounting Standards Codification (formerly SFAS No. 133) (Appalachia oil and gas hedges and Southwest oil hedges) are included in "Oil and gas sales" when settled. For those hedges designated to regions where the historical correlation between NYMEX and regional prices is "non-highly effective" (Southwest gas) or is "volumetric ineffective" due to sale of the underlying reserves (Southwest oil), they are deemed to be "derivatives" and the cash settlements are included in a separate line item shown as "Derivative fair value income (loss)" in Form 10-Q along with the change in mark-to-market valuations of such unrealized derivatives. The Company has provided additional information regarding oil and gas sales in a supplemental table included with this release, which would correspond to amounts shown by analysts for oil and gas sales realized, including cash-settled derivatives.

RANGE RESOURCES CORPORATION (NYSE: RRC) is an independent oil and gas company operating in the Southwestern and Appalachian regions of the United States.

Except for historical information, statements made in this release, including those relating to estimated reserves, potential, future or expected earnings, rates of return, expected debt reduction, asset sales, cash flow, targeted capital expenditures, production growth, processing capacity, planned number of wells to be drilled, assessments of financial condition and liquidity, drilling inventory, unrisked resource potential and emerging plays resource potential are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and Range's future performance are subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the volatility of oil and gas prices, the results of our hedging transactions, the costs and results of drilling and operations, the timing of production, mechanical and other inherent risks associated with oil and gas production, weather, the availability of drilling equipment, changes in interest rates, litigation, uncertainties about reserve estimates and environmental risks. Range undertakes no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in Range's filings with the Securities and Exchange Commission, which are incorporated by reference.

The Securities and Exchange Commission permits oil and gas companies, in filings made with the SEC, to disclose only proved reserves, which are estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Range uses the terms "probable" and "possible" reserves, "unproven" or "unrisked resource potential" or "upside" or other descriptions of volumes of reserves or resources potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines strictly prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by Range. Resource potential refers to Range's internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques. Resource potential does not constitute reserves within the meaning of the Society of Petroleum Engineer's Petroleum Resource Management System and does not include any proved reserves. Area wide unproven, unrisked resource potential has not been risked by Range's management. Actual quantities that may be ultimately recovered from Range's interests will differ substantially. Factors affecting ultimate recovery include the scope of Range's drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of resource potential may change significantly as development of our resource plays provides additional data. Investors are urged to consider closely the disclosure in our most recent Annual Report on Form 10-K, available from our website at www.rangeresources.com or by written request to 100 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102. You can also obtain this form by calling the SEC at 1-800-SEC-0330.

RANGE RESOURCES CORPORATION

STATEMENTS OF
INCOME

Based on GAAP
reported
earnings with
additional      Three Months Ended September 30,  Nine Months Ended September 30,
details of
items included
in each line
in Form 10-Q

(Unaudited, in
thousands,      2009         2008 (a)             2009         2008 (a)
except per
share data)

Revenues

Oil and gas     $ 202,122    $ 347,720            $ 597,834    $ 1,002,726
sales (b)

Cash-settled
derivative        53,227       (26,001 )            149,085      (46,260   )
gain (b)(d)

Transportation    2,659        1,643                4,769        4,234
and gathering

Transportation
and gathering
- non-cash        (215    )    (106    )            (678    )    (344      )
stock
compensation
(c)

Change in
mark-to-market
on unrealized     (53,323 )    294,317              (83,393 )    (3,184    )
derivatives
(d)

Ineffective
hedging gain      (386    )    4,553                (483    )    1,862
(loss) (d)

Gain (loss) on
sale of           32           3                    39           20,050
properties (e)

Other (e)         (475    )    541                  (6,663  )    727

                  203,641      622,670    -67  %    660,510      979,811      -33  %

Expenses

Direct            30,313       35,770               99,123       104,659
operating

Direct
operating -
non-cash stock    798          762                  2,357        2,051
compensation
(c)

Production and
ad valorem        7,600        15,210               23,421       45,106
taxes

Exploration       10,123       18,129               32,876       52,076

Exploration -
non-cash stock    979          1,020                2,933        3,128
compensation
(c)

Abandonment
and impairment    24,053       5,055                84,579       10,653
of unproven
properties

General and       23,022       19,110               61,875       48,884
administrative

General and
administrative
- non-cash        7,546        5,540                22,706       17,116
stock
compensation
(c)

Deferred
compensation      16,445       (37,515 )            29,635       (9,365    )
plan (f)

Interest          30,633       25,373               86,817       72,361

Depletion,
depreciation      97,208       76,690               270,241      218,938
and
amortization

                  248,720      165,144    51   %    716,563      565,607      27   %

Income from
operations        (45,079 )    457,526    -110 %    (56,053 )    414,204      -114 %
before income
taxes

Income taxes

Current           (695    )    2,374                (76     )    4,209

Deferred          (14,566 )    170,202              (18,884 )    152,551

                  (15,261 )    172,576              (18,960 )    156,760

Net income      $ (29,818 )  $ 284,950    -110 %  $ (37,093 )  $ 257,444      -114 %

Earnings per
share

Basic           $ (0.19   )  $ 1.87       -110 %  $ (0.24   )  $ 1.71         -114 %
operations

Diluted         $ (0.19   )  $ 1.81       -111 %  $ (0.24   )  $ 1.65         -115 %

Weighted
average shares
outstanding,
as reported

Basic             154,653      152,765    1    %    154,257      150,487      3    %

Diluted           154,653      157,729    -2   %    154,257      155,896      -1   %

(a) Certain minor amounts were restated in 2008 and prior. See 8-K filed on August 10, 2009.

(b) See separate oil and gas sales information table.

(c) Costs associated with stock compensation and restricted stock amortization, which have been reflected in the categories associated with the direct personnel costs, which are combined with the cash costs in the 10-Q.

(d) Included in Derivative fair value income in the 10-Q.

(e) Included in Other revenues in the 10-Q.

(f) Reflects the change in the market value of the vested Company stock held in the deferred compensation plan.

RANGE RESOURCES CORPORATION

BALANCE SHEETS

(Audited, in thousands)

                                                 September 30,  December 31,
                                                 2009           2008 (a)

                                                 Unaudited

Assets

Current assets                                   $ 118,766      $ 182,881

Current unrealized derivative gain                 78,410         221,430

Oil and gas properties                             4,871,939      4,842,046

Transportation and field assets                    94,278         86,228

Unrealized derivative gain                         -              5,231

Other                                              232,989        214,063

                                                 $ 5,396,382    $ 5,551,879

Liabilities and Stockholders' Equity

Current liabilities                              $ 234,674      $ 351,449

Current asset retirement obligation                2,118          2,055

Current unrealized derivative loss                 9,573          10

Bank debt                                          398,000        693,000

Subordinated notes                                 1,383,480      1,097,668

Total long-term debt                               1,781,480      1,790,668

Deferred taxes                                     759,406        779,218

Unrealized derivative loss                         5,301          -

Deferred compensation liability                    132,517        93,247

Long-term asset retirement obligation and other    85,984         83,890

Common stock and retained earnings                 2,374,484      2,382,392

Treasury stock                                     (8,557    )    (8,557    )

Other comprehensive income                         19,402         77,507

Total stockholders' equity                         2,385,329      2,451,342

                                                 $ 5,396,382    $ 5,551,879

(a) Certain minor amounts were restated in 2008 and prior. See 8-K filed on August 10, 2009.

RANGE RESOURCES CORPORATION

CASH FLOWS FROM OPERATIONS

(Unaudited, in thousands)    Three Months Ended         Nine Months Ended
                             September 30,              September 30,

                             2009         2008 (a)      2009         2008 (a)

Net income (loss)            $ (29,818 )  $ 284,950     $ (37,093 )  $ 257,444

Adjustments to reconcile
net income to net cash
provided by operations:

Loss (gain) from equity        1,022        (151     )    6,548        (170    )
investment

Deferred income tax expense    (14,566 )    170,202       (18,884 )    152,551
(benefit)

Depletion, depreciation and    97,208       76,690        270,241      218,938
amortization

Exploration dry hole costs     211          81            342          9,337

Abandonment and impairment     24,053       5,055         84,579       10,653
of unproved properties

Mark-to-market losses on
oil and gas derivatives not    53,323       (294,317 )    83,393       3,184
designated as hedges

Ineffective hedging (gain)     386          (4,553   )    483          (1,862  )
loss

Allowance for bad debts        1,151        450           1,151        450

Amortization of deferred       1,409        649           3,742        2,137
financing costs and other

Deferred and stock-based       26,050       (30,188  )    58,844       13,413
compensation

(Gain) loss on sale of         (434    )    107           1,509        (19,865 )
assets and other

Changes in working capital:

Accounts receivable            (8,080  )    30,189        38,373       (64,468 )

Inventory and other            1,347        24,576        (807    )    (5,263  )

Accounts payable               4,932        (19,457  )    (67,076 )    2,927

Accrued liabilities            17,140       11,243        18,423       20,982

Net changes in working         15,339       46,551        (11,087 )    (45,822 )
capital

Net cash provided from       $ 175,334    $ 255,526     $ 443,768    $ 600,388
operations

RECONCILIATION OF NET CASH
PROVIDED FROM CONTINUING
OPERATIONS, AS REPORTED TO
CASH FLOW FROM OPERATIONS
BEFORE CHANGES IN WORKING
CAPITAL, a non-GAAP measure

(Unaudited, in thousands)     Three Months Ended        Nine Months Ended
                              September 30,             September 30,

                              2009         2008 (a)     2009         2008 (a)

Net cash provided from
continuing operations, as     $ 175,334    $ 255,526    $ 443,768    $ 600,388
reported

Net change in working           (15,339 )    (46,551 )    11,087       45,822
capital

Exploration expense             9,912        18,048       32,534       42,739

Other                           1,175        (199    )    (1,243  )    (604    )

Cash flow from operations
before changes in working     $ 171,082    $ 226,824    $ 486,146    $ 688,345
capital, non-GAAP measure

ADJUSTED WEIGHTED AVERAGE
SHARES OUTSTANDING

(Unaudited, in thousands)     Three Months Ended        Nine Months Ended
                              September 30,             September 30,

                              2009         2008 (a)     2009         2008 (a)

Basic:

Weighted average shares         157,407    155,169        156,820      152,775
outstanding

Stock held by deferred          (2,754  )  (2,404    )    (2,563  )    (2,288  )
compensation plan

                                154,653    152,765        154,257      150,487

Dilutive:

Weighted average shares         157,407    155,169        156,820      152,775
outstanding

Dilutive stock options under
treasury method unless          (2,754  )  2,560          (2,563  )    3,121
anti-dilutive

                                154,653    157,729        154,257      155,896

(a) Certain minor amounts were restated in 2008 and prior. See 8-K filed on August 10, 2009.

RANGE RESOURCES CORPORATION

OIL AND GAS
SALES
INFORMATION

A Non-GAAP
Measure

(Unaudited, in
thousands,       Three Months Ended                     Nine Months Ended
except per unit  September 30,                          September 30,
data)

                 2009            2008                    2009             2008

Oil and gas
sales
components:

Oil sales        $ 33,870        $ 86,506                $ 101,892        $ 257,640

NGL sales          16,886          20,162                  36,455           55,241

Gas sales          97,004          282,243                 300,646          775,813

Cash-settled
hedges
(effective):

Crude oil          240             (28,002    )            12,247           (76,427     )

Natural gas        54,122          (13,189    )            146,594          (9,541      )

Total oil and
gas sales, as    $ 202,122       $ 347,720       -42 %   $ 597,834        $ 1,002,726      -40 %
reported

Derivative fair
value income
(loss)
components:

Cash-settled
derivatives
(ineffective):

Crude oil        $ 27            $ (7,318     )          $ 7,575          $ (17,043     )

Natural gas        53,200          (18,683    )            141,510          (29,217     )

Change in
mark-to-market     (53,323    )    294,317                 (83,393     )    (3,184      )
on unrealized
derivatives

Unrealized         (386       )    4,553                   (483        )    1,862
ineffectiveness

Total
derivative fair
value income     $ (482       )  $ 272,869               $ 65,209         $ (47,582     )
(loss), as
reported

Oil and gas
sales,
including
cash-settled
derivatives:

Oil sales        $ 34,137        $ 51,186                $ 121,714        $ 164,170

Natural gas        16,886          20,162                  36,455           55,241
liquid sales

Gas sales          204,326         250,371                 588,750          737,055

Total            $ 255,349       $ 321,719       -21 %   $ 746,919        $ 956,466        -22 %

Production
during the
period:

Oil (bbl)          534,399         759,449       -30 %     1,987,603        2,343,138      -15 %

Natural gas        543,005         345,635       57  %     1,492,259        993,366        50  %
liquid (bbl)

Gas (mcf)          33,747,972      29,053,832    16  %     96,205,898       84,029,611     14  %

Equivalent         40,212,396      35,684,336    13  %     117,085,070      104,048,635    13  %
(mcfe) (a)

Production -
average per
day:

Oil (bbl)          5,809           8,255         -30 %     7,281            8,552          -15 %

Natural gas        5,902           3,757         57  %     5,466            3,625          51  %
liquid (bbl)

Gas (mcf)          366,826         315,803       16  %     352,403          306,677        15  %

Equivalent         437,091         387,873       13  %     428,883          379,740        13  %
(mcfe) (a)

Average prices
realized,
including
cash-settled
hedges and
derivatives:

Crude oil (per   $ 63.88         $ 67.40         -5  %   $ 61.24          $ 70.06          -13 %
bbl)

Natural gas
liquid (per      $ 31.10         $ 58.33         -47 %   $ 24.43          $ 55.61          -56 %
bbl)

Gas (per mcf)    $ 6.05          $ 8.62          -30 %   $ 6.12           $ 8.77           -30 %

Equivalent (per  $ 6.35          $ 9.02          -30 %   $ 6.38           $ 9.19           -31 %
mcfe) (a)

(a) Oil and natural gas liquids are converted to gas equivalents on a basis of six mcf per barrel.

RANGE RESOURCES CORPORATION

RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES
AS REPORTED TO INCOME FROM OPERATIONS BEFORE INCOME TAXES
EXCLUDING CERTAIN NON-CASH ITEMS, a non-GAAP measure

(Unaudited, in
thousands,      Three Months Ended                 Nine Months Ended
except per      September 30,                      September 30,
share data)

                2009         2008 (a)              2009         2008 (a)

As reported     $ (45,079 )  $ 457,526     -110 %  $ (56,053 )  $ 414,204    -114 %

Adjustment for
certain
non-cash items

(Gain) loss on
sale of           (32     )    (3       )            (39     )    (20,050 )
properties

Change in
mark-to-market    53,323       (294,317 )            83,393       3,184
on unrealized
derivatives

Ineffective
hedging (gain)    386          (4,553   )            483          (1,862  )
loss

Abandonment
and impairment    24,053       5,055                 84,579       10,653
of unproven
properties

Equity method     -            -                     2,950        -
impairment

Houston office
severance         840          -                     840          -
accrual

Transportation
and gathering
- non-cash        215          106                   678          344
stock
compensation

Direct
operating -       798          762                   2,357        2,051
non-cash stock
compensation

Exploration
expenses -        979          1,020                 2,933        3,128
non-cash stock
compensation

General &
administrative
- non-cash        7,546        5,540                 22,706       17,116
stock
compensation

Deferred
compensation
plan -            16,445       (37,515  )            29,635       (9,365  )
non-cash stock
compensation

As adjusted       59,474       133,621     -55  %    174,462      419,403    -58  %

Income taxes,
adjusted

Current           (695    )    2,374                 (76     )    4,209

Deferred          19,205       48,402                61,456       157,874

Net income
excluding
certain items,  $ 40,964     $ 82,845      -51  %  $ 113,082    $ 257,320    -56  %
a non-GAAP
measure

Non-GAAP
earnings per
share

Basic           $ 0.27       $ 0.54        -50  %  $ 0.73       $ 1.71       -57  %

Diluted         $ 0.26       $ 0.53        -51  %  $ 0.71       $ 1.65       -57  %

GAAP diluted
shares            158,865      157,729               158,391      155,896
outstanding
(b)

(a) Certain minor amounts were restated in 2008 and prior. See 8-K filed on August 10, 2009.

(b) GAAP diluted shares outstanding for 2009 have been adjusted for dilutive stock options due to adjustments which adjust to non-GAAP income

HEDGING POSITION

As of October 21, 2009  Gas                       Oil

(Unaudited)             Volume     Average        Volume   Average

                        Hedged     Hedge          Hedged   Hedge

                        (Mmbtu/d)  Prices         (Bbl/d)  Prices

4Q 2009 Swaps           76,739     $8.16          -        -

4Q 2009 Collars         184,837    $7.64 - $8.53  6,000    $63.43 - $76.01

2010    Swaps           -          -              -        -

2010    Collars         189,836    $5.54 - $7.47  -        -

Note: Details as to the Company's hedges are posted on its website and are
updated periodically.

    Source: Range Resources Corporation RANGE RESOURCES CORPORATION

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