Executive Summary / Key Takeaways

• Disciplined Growth into Expanding Demand: Range Resources is strategically positioned for a 20% production increase to 2.6 Bcfe/day by 2027, driven by robust demand for natural gas (LNG, power, data centers) and NGLs (exports, petrochemicals), supported by secured transportation and processing capacity.
• Operational Excellence and Low Capital Intensity: The company's class-leading drilling and completion costs, achieved through advanced horizontal drilling and electric fracturing fleets, enable a low reinvestment rate (below 50% at $3.75 NYMEX) and a competitive breakeven of approximately $2 per NYMEX.
• Diversified Revenue Streams and Premium Realizations: Range's balanced production mix (70% gas, 30% liquids) and diversified market access, including East Coast NGL exports to Europe and gas sales to the Midwest and Gulf Coast, consistently generate premium pricing, with a $0.20 premium over NYMEX natural gas in the first nine months of 2025.
• Strong Financial Foundation and Shareholder Returns: With a robust balance sheet, ample liquidity ($1.20 billion as of September 30, 2025), and a commitment to returning capital, Range has repurchased $176.6 million in shares and paid $64.4 million in dividends in the first nine months of 2025, while also reducing debt.
• Long-Duration Inventory and Future Optionality: Decades of high-quality Marcellus inventory provide significant long-term optionality for further growth beyond 2027, allowing Range to respond flexibly to emerging demand without compromising its low-cost structure.

RRC's Enduring Appalachian Advantage and Strategic Evolution

Range Resources Corporation, an independent natural gas, natural gas liquids (NGLs), and oil company, has carved a formidable niche in the Appalachian region of the United States since its inception as Lomak Petroleum Inc. in 1976. The company's strategic journey, marked by its pivotal role in the Marcellus discovery well over two decades ago, laid the groundwork for its extensive and high-quality asset base. This foundational expertise in the Appalachian Basin has been consistently leveraged through a returns-focused development strategy, emphasizing internally generated drilling projects complemented by opportunistic acquisitions and divestitures, such as the strategic sale of its North Louisiana assets in 2020.

A significant strategic pivot occurred in 2016 when Range entered the international NGL export market, participating in the first-ever export of ethane. This move proved prescient, establishing a cornerstone of Range's diversified revenue stream and contributing to some of the highest NGL premiums in the company's history. This diversification is critical, as approximately 90% of Range's revenue is derived from markets outside the Appalachia basin.

The company's overarching strategy is to build stockholder value by generating consistent cash flows from its reserves and production. This is underpinned by a commitment to operational excellence and a low capital intensity model, which are crucial in the volatile energy sector. Range's dedication to environmental stewardship is also a core tenet, evidenced by achieving net zero for its combined Scope 1 and 2 greenhouse gas emissions in early 2025 and an 83% reduction in methane emissions intensity over the last five years. These efforts, coupled with MIQ certification for all its Pennsylvania assets, underscore a commitment to sustainable energy production.

The broader energy landscape presents a compelling backdrop for Range's strategy. Global demand for natural gas is on a significant upward trajectory, fueled by the commissioning of new U.S. liquefied natural gas (LNG) export facilities and increasing global power demand. LNG feed gas demand is projected to exceed 30 Bcf per day by 2031, more than doubling current export capacity. Domestically, the emergence of data centers and gas-fired power generation projects in the Northeast, particularly in Pennsylvania, is creating substantial in-basin demand, with consensus estimates pointing to approximately 2.5 Bcf per day of Northeastern demand potential from data centers by the end of the decade. Similarly, the NGL market is experiencing robust growth, with substantial increases in export capacity for ethane and LPG expected to drive stronger international demand and improved NGL pricing relative to WTI.

Technological Edge and Operational Prowess

Range Resources' competitive advantage is deeply rooted in its differentiated operational methodology, which combines advanced drilling and completion techniques with strategic infrastructure utilization. This approach, rather than a single proprietary technology, forms the bedrock of its efficiency and cost leadership.

The company excels in extended-reach horizontal drilling, consistently pushing the boundaries of lateral lengths. In 2024, Range drilled over 800,000 lateral feet, with an average horizontal length exceeding 14,000 feet. This momentum continued into 2025, with drilling teams setting new program records by averaging approximately 6,250 lateral feet per day in Q2 2025 and 5,961 feet per day in Q1 2025. Crucially, this efficiency is achieved while maintaining exceptional precision, with 98% accuracy within a narrow geosteered landing target window. The tangible benefit of these long laterals is the ability to access more reserves from a single location, reducing the overall surface footprint and consolidating infrastructure requirements.

Complementing its drilling prowess, Range has embraced electric fracturing fleets since early 2024. This technology has contributed to strong safety performance and significant efficiency gains. In 2024, the completions team executed 3,300 stages, marking a 6% increase in frac stages per day compared to 2023. This trend continued in 2025, with a new company record of 812 frac stages completed by a single crew in Q2 2025, and an average of nearly 10 frac stages per day in Q3 2025. These efficiencies translate directly into lower operational costs and faster well turn-in-lines.

Range's strategy of pad site development and infrastructure optimization further enhances its operational efficiency. By returning to existing pad sites and leveraging existing infrastructure, the company minimizes new construction and associated costs. Multi-operational project scheduling and a relentless focus on reducing non-productive time contribute to lower lease operating expenses (LOE), which stood at $0.11 per Mcfe in Q3 2025 and $0.13 per Mcfe in Q1 2025. The company has also achieved a 13% annual improvement in winter runtime over the past four years through equipment optimization and enhanced maintenance.

For investors, these technological and operational advantages are paramount. They form a robust competitive moat, enabling Range to be a low-cost producer with superior margins and strong free cash flow generation. The ability to hold current production flat (2.2 Bcfe/day) while simultaneously building a substantial drilled uncompleted (DUC) inventory with just two drilling rigs and one frac crew underscores the capital efficiency inherent in Range's operations. This operational dexterity allows Range to efficiently add "wedges of growth" as market demand dictates, ensuring that its long-term growth strategy is both sustainable and highly profitable.

Financial Performance: Resilience and Growth Momentum

Range Resources has demonstrated remarkable financial resilience and a clear trajectory of growth, particularly evident in its recent performance. In the third quarter of 2025, the company reported a 15% increase in revenue from natural gas, NGLs, and oil sales compared to the same period in 2024, reaching $748.5 million. This growth was primarily driven by a 13% increase in average realized prices (before derivative cash settlements) and a 1% increase in production volumes. For the first nine months of 2025, total revenues from natural gas, NGLs, and oil sales surged by 31% year-over-year to $2.30 billion, attributed to a 29% increase in average realized prices and a 2% rise in production volumes.

Profitability metrics reflect this strong top-line performance. Net income in Q3 2025 climbed to $144.3 million, or $0.60 per diluted common share, a significant increase from $50.7 million, or $0.21 per diluted common share, in Q3 2024. Similarly, for the first nine months of 2025, net income reached $478.9 million ($1.99 per diluted common share), up from $171.5 million ($0.70 per diluted common share) in the prior-year period. These improvements were largely due to higher realized prices and an increased unrealized derivative fair value gain.

Operational costs are managed with discipline. Direct operating expense remained flat at $0.12 per Mcfe for both Q3 and the first nine months of 2025. While transportation, gathering, processing, and compression expense decreased in Q3 2025 due to lower NGL prices, it increased for the first nine months of 2025, primarily due to higher NGL volumes and electricity costs. Interest expense saw a decrease in both periods, reflecting lower average outstanding debt balances. Depletion, depreciation, and amortization (DDA) expense increased, consistent with a higher depletion rate and increased production volumes.

Range maintains a robust liquidity position and a disciplined capital allocation strategy. As of September 30, 2025, the company had approximately $1.20 billion in liquidity, comprising $175,000 in cash and $1.20 billion available under its bank credit facility. The bank credit facility was recently amended on October 2, 2025, maintaining a maximum facility of $4 billion and an initial borrowing base of $3 billion, while increasing bank commitments from $1.50 billion to $2 billion, with a maturity date of October 2, 2030. Range was in compliance with all financial and non-financial covenants as of September 30, 2025.

The company's commitment to shareholder returns and debt reduction is evident. In the first nine months of 2025, Range repurchased $176.6 million worth of its common stock (4.9 million shares) and paid $64.4 million in dividends. A dividend of $0.09 per share was approved on August 29, 2025, with the intention for future dividends to grow slowly but steadily. The remaining share repurchase authorization stood at approximately $839.50 million. Debt management is also a priority, with $606.5 million of 4.88% senior notes due 2025 repaid in May 2025, utilizing cash on hand and a modest draw on the credit facility. As of September 30, 2025, total debt included $1.10 billion in senior notes (averaging 6.70% fixed interest) and $129 million in bank debt (6% floating rate).

These financial actions underscore Range's ability to generate significant free cash flow and allocate it prudently across capital investment, debt reduction, and shareholder returns.

Competitive Positioning: A Differentiated Appalachian Leader

Range Resources occupies a distinct and advantageous position within the highly competitive U.S. oil and gas exploration and production (E&P) sector, particularly in the Appalachian Basin. Its competitive standing is defined by a unique combination of asset quality, operational efficiency, and strategic market access, which collectively form a robust competitive moat.

Range's inventory quality and duration are paramount differentiators. With decades of high-quality Marcellus inventory, Range stands out against competitors who may face inventory exhaustion, ensuring long-term, reliable supply. This extensive resource base is crucial for securing long-term supply agreements, especially with emerging demand centers like data centers and power generation facilities that require "99.999% reliability."

The company's cost leadership is another significant advantage. Range consistently achieves class-leading drilling and completion costs, contributing to a low full-cycle cost structure and a competitive breakeven of approximately $2 per NYMEX. This efficiency translates into a low reinvestment rate, expected to remain well below 50% at a $3.75 natural gas price level, allowing for substantial capital returns to shareholders. This contrasts with other basins where primary growth sources require higher gas prices (e.g., $4) just to achieve a 70% reinvestment rate for LNG supply, making Range's growth more capital-efficient.

Range's diversified product mix and strategic marketing portfolio further enhance its competitive edge. With a production mix of approximately 70% natural gas and 30% liquids, Range benefits from the NGL uplift, which has historically generated premium pricing. This diversification, coupled with its ability to market roughly 90% of its revenue outside Appalachia, provides resilience against regional price fluctuations. Range has secured transportation capacity to premium markets in the Midwest and Gulf Coast, and its access to East Coast NGL export facilities (including the new Repauno terminal by late 2026/early 2027) makes it a preferred supplier to European markets, often securing premiums over the Mont Belvieu index. This flexible portfolio allows Range to optimize sales mix and enhance margins, as evidenced by its $0.20 premium over NYMEX natural gas in the first nine months of 2025.

When comparing Range to key competitors like EQT Corporation , Chesapeake Energy Corporation , and CNX Resources Corporation , several distinctions emerge. While EQT may possess a larger overall scale, Range's focused Appalachian expertise and superior cost efficiency in its core operating areas provide a competitive counterpoint. Range's NGL diversification also offers a more balanced portfolio compared to EQT's (EQT) predominantly gas-centric approach. Against CHK (CHK), which often pursues more dynamic and aggressive expansion strategies, Range offers long-term stability and reliability, a critical factor for industrial and power generation customers seeking consistent supply. While CNX (CNX) is recognized for its cost leadership, Range's combination of diversified product mix, operational efficiencies, and extensive inventory allows it to compete effectively while mitigating risks associated with over-reliance on a single commodity. Management emphasizes that Range's credit rating has not been a factor in discussions with customers for long-term supply agreements, as its leverage is below that of investment-grade peers and its bonds trade at investment-grade levels, highlighting its perceived financial strength.

The broader industry trend of increasing demand for natural gas, particularly from LNG exports and new power generation/data centers, plays directly into Range's strengths. The company's ability to offer reliable, long-term supply from its low-cost, low-emission Marcellus assets positions it as a key supplier for these emerging markets. Range's management believes that the risk of industry oversupply is mitigated by the disciplined capital allocation seen across the sector and Range's unique ability to grow efficiently into known demand.

Strategic Initiatives and Forward Outlook

Range Resources is embarking on a strategic growth trajectory, aiming to significantly enhance shareholder value through disciplined expansion into well-defined demand markets. The company's previously announced growth plans project an increase in daily production by approximately 400 million cubic feet equivalent (MMcfe) over three years, reaching 2.6 Bcfe per day by 2027. This represents a substantial 20% increase from current levels and is underpinned by a clear line of sight to incremental demand for both natural gas and NGLs.

The capital required to achieve this growth is remarkably efficient. Range's all-in capital budget for the full year 2025 is guided between $650 million and $680 million, with year-to-date investments of $491 million keeping the company on track. Crucially, annual capital expenditures are expected to remain relatively flat over the next two years, ranging from $650 million to $700 million, to support this growth. This capital efficiency is a direct result of strategic investments in drilled uncompleted (DUC) inventory since late 2023, allowing Range to leverage existing assets for future production. The company is on track to exit 2025 with over 400,000 lateral feet of growth-focused DUC inventory.

The production cadence for this growth is carefully staged. After being roughly flat in Q3 2025 at 2.2 Bcfe per day, production is expected to step up to approximately 2.3 Bcfe per day in Q4 2025, demonstrating initial progress towards the planned expansion. A fairly ratable increase is anticipated, reaching 2.4 Bcfe per day in 2026 and then 2.6 Bcfe per day by 2027. A significant step-up in production is expected around mid-2026, coinciding with the commissioning of the MPLX (MPLX) Harmon Creek III processing facility and associated gathering support.

Operationally, Range plans to maintain its efficient two-drilling-rig program, while completion activity will see an uptick. In 2026, drilling activity will be reduced, but a second frac crew will be deployed for continuous activity to work through the accumulated DUC inventory. This strategic shift in capital allocation towards completions will maximize the utilization of previously drilled wells.

The demand drivers supporting this growth are robust and diversified. For natural gas, an additional 4 Bcf per day of LNG export capacity is expected to come online in 2026, further tightening gas market fundamentals. Longer-term, LNG feed gas demand is projected to exceed 30 Bcf per day by 2031. On the NGL front, ethane and propane are anticipated to see substantial increases in export capacity from the U.S. Gulf Coast, leading to stronger international demand and improved NGL pricing relative to WTI. Ethane exports are projected to double by the end of 2026, and LPG demand is expected to grow by 700,000 barrels per day by the same period. Domestically, in-basin opportunities are materializing rapidly, with an estimated 2.5 Bcf per day of Northeastern demand potential from data centers by the end of the decade. Range is actively involved in the Fort Cherry joint venture project with Liberty and Imperial, aiming to supply natural gas to a planned power generation facility in Washington County, PA, a project that could serve as a catalyst for attracting more industrial and data center operations. State-level support, such as the $400 million Site Act in Pennsylvania, further de-risks these in-basin industrial developments.

Range's reinvestment rate is expected to remain well below 50% at a $3.75 natural gas price level over the three-year period, enabling increasing returns of capital while growing the business. Post-2027, Range projects it can maintain 2.6 Bcfe per day of production with approximately $570 million to $600 million of annual drilling and completions capital, equivalent to a highly efficient $0.60 per Mcfe. This low maintenance capital requirement, coupled with its 30-plus years of high-quality Marcellus inventory, provides significant long-term optionality for additional growth as market conditions warrant.

Risks and Challenges

While Range Resources presents a compelling investment thesis, it operates within an industry inherently exposed to various risks and challenges. The most significant of these is commodity price volatility for natural gas, NGLs, and oil. Fluctuations in these prices directly impact Range's revenues, profitability, and cash flow, as well as its ability to fund capital programs and return capital to shareholders. Although Range employs strategies like capital discipline, diversified sales outlets, and partial hedging to manage this risk, it remains a fundamental exposure.

Geopolitical disruptions, supply chain issues, cost inflation, and the potential for economic recession also pose risks, as these factors can impact global demand for Range's commodities and influence operating costs. The company is also exposed to counterparty credit risk on its derivative obligations and the risk of non-collection of accounts receivable. While Range mitigates this by selecting and monitoring investment-grade financial institutions and utilizing master netting agreements, these risks persist.

Basis risk, which arises from the differential between commodity futures prices and local cash market prices, can limit the effectiveness of derivative hedges if regional price changes are not reflected in futures markets. Furthermore, the Appalachian region faces infrastructure constraints for ethane, and if Range cannot sell or store NGLs, it may be required to curtail production or shift drilling activities to dry gas areas. The company cannot guarantee the continued availability of existing ethane agreements.

Regulatory and permitting challenges for new infrastructure, despite noted state support for in-basin projects, could also delay or increase the cost of future growth initiatives. Finally, the industry constantly faces the risk of an oversupply response to strong demand signals. However, Range believes its low-cost structure, long-duration inventory, and disciplined approach to growth mitigate this risk for its own operations, distinguishing it from competitors who might be more susceptible to irrational production increases.

Conclusion

Range Resources Corporation stands as a compelling investment opportunity, uniquely positioned to capitalize on the evolving energy landscape. The company's core investment thesis is firmly rooted in its unparalleled Appalachian asset base, characterized by decades of high-quality Marcellus inventory and a demonstrated ability to operate with industry-leading efficiency and low capital intensity. This operational prowess, driven by advanced horizontal drilling and electric fracturing fleets, translates directly into superior financial performance, enabling consistent free cash flow generation even through challenging commodity cycles.

Range's strategic foresight in diversifying its product mix and securing broad market access, particularly for NGL exports to Europe and natural gas sales to the Midwest and Gulf Coast, ensures premium price realizations and resilience against regional market fluctuations. The company's disciplined growth plan, targeting a 20% production increase by 2027 with relatively flat capital expenditures, aligns perfectly with the burgeoning demand from LNG exports, power generation, and data centers. With a strong balance sheet, a commitment to shareholder returns through opportunistic buybacks and a growing dividend, and a clear technological roadmap focused on continuous efficiency gains, Range Resources is well-equipped to drive significant per-share value. The interplay of its operational excellence, financial prudence, and strategic market positioning solidifies its competitive advantage, making it a differentiated leader poised for sustained success in the dynamic energy sector.