Range Resources (RRC) reported earnings for the first quarter of 2010, and held a conference call on April 28, 2010 to discuss the results. The company made extensive commentary on is activity in the Marcellus Shale in Pennsylvania, and defended the area as having the best economics of any large scale manufacturing natural gas play in North America.
“Range's Marcellus production has the best economics of any large scale, repeatable gas play in the U.S. There are basically four reasons for this.”
“The first is this discovery in the Appalachian Basin, which is in close proximity to the best gas markets in the U.S. Therefore, the gas produced here is advantaged versus other gas in the U.S. It doesn't have to be transported forward to get to the end users.”
“Second, not all layers in the Marcellus or any other gas play for that matter are equal. To have the best economics, you will have to be in the core part of the play where the rock quality is the best.”
“The third reason is that Range discovered the modern Marcellus Shale play and has a strategic first mover advantage. Since we were the first to pursue the play, our acreage acquisition cost is very low, which significantly impacts our economics in a positive way.”
“The fourth reason, our economics is so good perhaps the best in the Marcellus play so that we are in the wet gas portion of the play, which relatively speaking is a small part of the total Marcellus acreage. It exists in the Western half of the Southwest portion of the play, primarily in Southwest Pennsylvania and into the West Virginia Panhandle.”
Source: Seeking Alpha
