Range Resources Corporation (NYSE:RRC) Q1 2019 Earnings Conference Call - Final Transcript

Apr 23, 2019 • 09:00 am ET


Range Resources Corporation (NYSE:RRC) Q1 2019 Earnings Conference Call - Final Transcript


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Mark S. Scucchi

As disclosed in the proxy statement, 2019 estimated senior executive compensation is expected to decline approximately 30% compared to 2016. Additional savings have been identified in areas such as consultants, data subscriptions, insurance brokers, and software among others.

On the matter of equity compensation expense, it should be noted that even though potential stock Range specifically performance shares are expense, that does not mean that shares were issued. In fact, significant forfeitures have the experienced, which is evident in the 0.5% of 1% change in diluted shares outstanding over the last year. While steps have been taken to optimize spending, we continue to focus on all expenditures to enhance profitability and resiliency.

Turning to the balance sheet, free cash flow from the first quarter resulted in a $48 million reduction in revolver borrowings. While the business is seasonal, we expect to generate a material free cash flow over the balance of the year. In addition, divestiture processes continue on multiple fronts.

As we look at our debt profile, we have balance readily repayable under the revolver without early redemption cost. We remain focused on reducing debt, maintaining a comfortable maturity layer, and strengthening our balance sheet over time.

As it relates to asset sales, we are currently marketing several opportunities. These processes are in various stages from data rooms to active negotiations to diligence. We're working conscientiously and will continue to evaluate opportunities to prudently monetize inventory. As evidence of this goal, absolute debt reduction was added as an incentive performance metric detailed in the proxy.

As we look forward to the balance of 2019 and beyond, the framework through which we allocate capital remains a daily focus, the focus on creating economic value. We evaluate each reinvestment decision, weighing relative returns and optimizing for total free cash flow, absolute debt reduction, leverage ratios, capital efficiency, unit cost, margins, and base decline rate.

In balancing objectives to maximize the value from the 2019 capital program, we developed a $756 million capital plan. This budget is a 20% reduction from prior year, and we are on track to remain within this target.

In summary, we remain focused on converting consistently efficient operations on top-tier acreage into tangible shareholder returns through the application of a disciplined capital allocation framework, coupled with continued cost management efforts.

Jeff, back to you.

Jeffrey L. Ventura

Operator, let's open it up for Q&A.