3 unchanged sentences
(In thousands, except per share data)
+Added: September 30,
Current assets:
31 unchanged sentences
Common stock, $ 0.01 par, 475,000,000 shares authorized, 259,787,004 issued at
−Removed: June 30, 2021 and 256,353,887 issued at December 31, 2020
−Removed: Common stock held in treasury, 10,004,683 shares at June 30, 2021 and 10,005,795
+Added: September 30, 2021 and 256,353,887 issued at December 31, 2020
+Added: Common stock held in treasury, 10,002,646 shares at September 30, 2021 and 10,005,795
shares at December 31, 2020
8 unchanged sentences
(Unaudited, in thousands, except per share data)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Revenues and other income:
14 unchanged sentences
Depletion, depreciation and amortization
−Removed: Impairment of proved properties
+Added: Impairment of proved properties and other assets
(Gain) loss on the sale of assets
Total costs and expenses
−Removed: (Loss) income before income taxes
+Added: Loss before income taxes
Income tax expense (benefit):
5 unchanged sentences
(Unaudited, in thousands)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Other comprehensive loss:
8 unchanged sentences
(Unaudited, in thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Operating activities:
Adjustments to reconcile net loss to net cash provided from operating activities:
−Removed: Deferred income tax (benefit) expense
+Added: Deferred income tax benefit
Depletion, depreciation and amortization and impairment of proved properties
2 unchanged sentences
Cash settlements on derivative financial instruments
−Removed: Divestiture contract obligation accretion, net of gain
+Added: Divestiture contract obligation, including accretion, net of gain
Allowance for bad debt
28 unchanged sentences
Proceeds from the sales of common stock held by the deferred compensation
−Removed: Net cash (used in) provided from financing activities
−Removed: Increase in cash and cash equivalents
+Added: Net cash used in financing activities
+Added: Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
19 unchanged sentences
Balance as of June 30, 2021
+Added: Issuance of common stock
+Added: Stock-based compensation
+Added: Treasury stock
+Added: Other comprehensive income
+Added: Balance as of September 30, 2021
The accompanying notes are an integral part of these consolidated financial statements.
17 unchanged sentences
Balance as of June 30, 2020
+Added: Issuance of common stock
+Added: Stock-based compensation
+Added: Treasury stock
+Added: Other comprehensive income
+Added: Balance as of September 30, 2020
The accompanying notes are an integral part of these consolidated financial statements.
11 unchanged sentences
These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2020 Annual Report on Form 10-K filed with the SEC on February 23, 2021.
−Removed: The results of operations for second quarter and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.
+Added: The results of operations for third quarter and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year.
As more fully described in Note 2 and Note 18 of our 2020 Annual Report on Form 10-K filed with the SEC, deferred tax expense (benefit) for the first, second and third quarters 2020 was corrected through a restatement.
3 unchanged sentences
(4) DISPOSITIONS
−Removed: We recognized a pretax net gain of $ 2.5 million on the sale of assets in second quarter 2021 compared to a pretax net loss of $ 426,000 in second quarter 2020 and a pretax net gain of $ 646,000 in first six months 2021 compared to a pretax net gain of $ 121.7 million in first six months 2020.
+Added: We recognized a pretax net gain of $ 78,000 on the sale of assets in third quarter 2021 compared to a pretax net loss of $ 9.2 million in third quarter 2020 and a pretax net gain of $ 724,000 in first nine months 2021 compared to a pretax net gain of $ 112.4 million in first nine months 2020.
See discussion below for further details.
2 unchanged sentences
In second quarter 2021, we recorded an additional gain on the sale of our North Louisiana assets, which closed in third quarter 2020, of $ 2.4 million, which is primarily related to final closing adjustments.
−Removed: In first quarter 2021, we recorded an additional loss on the sale of these North Louisiana assets of $ 1.9 million generally related to the settlement of a royalty underpayment claim related to these assets.
+Added: In first quarter 2021, we recorded an additional loss on the sale of these North Louisiana assets of $ 1.9 million.
2020 Dispositions
+Added: North Louisiana.
+Added: In August 2020, we completed the sale of our North Louisiana assets for total consideration having an estimated fair value of $ 260.0 million.
+Added: This estimated fair value reflected (i) cash proceeds of $ 245.0 million, before normal closing adjustments and (ii) $ 15.0 million in contingent consideration which represents the estimated fair value, on August 14, 2020, of the contingent consideration we are entitled to receive in the future should certain commodity price thresholds be met.
+Added: We recorded a pretax loss of $ 8.1 million, after closing adjustments, in third quarter 2020.
+Added: Divestiture contingent consideration.
+Added: We are entitled to receive contingent consideration, annually through 2023, based on future achievement of certain natural gas and oil prices based on published indexes along with the realized NGLs price of the buyer.
+Added: The fair value of the contingent consideration is classified as current and noncurrent derivative asset on our consolidated balance sheet.
+Added: We revalue the contingent consideration each reporting period, with any valuation changes being recorded as derivative fair value income or loss in our consolidated statements of operations.
+Added: See also Note 11 for additional information.
+Added: Divestiture contract obligation.
+Added: As part of the sale of our North Louisiana assets, we retained certain midstream gathering, transportation and processing obligations through 2030.
+Added: The divestiture contract obligation is included in current or non-current liabilities in our consolidated balance sheet based on the forecasted timing of payments.
+Added: These costs are recognized in exit and termination costs in our consolidated statements of operations.
+Added: See also Note 14 for additional information.
Pennsylvania .
−Removed: In first six months 2020, we completed the sale of our shallow legacy assets in northwestern Pennsylvania for proceeds of $ 1.0 million.
+Added: In first quarter 2020, we completed the sale of our shallow legacy assets in northwestern Pennsylvania for proceeds of $ 1.0 million.
Based upon the receipt of approval from state governmental authorities of a change in operatorship during first quarter, we recognized a pretax gain of $ 122.5 million primarily due to the elimination of the asset retirement obligation associated with these properties.
2 unchanged sentences
We have three material revenue streams in our business:
−Removed: natural gas sales, NGLs sales and crude oil and condensate sales (referred to below as oil sales).
+Added: natural gas sales, NGLs sales and condensate sales (referred to below as oil sales).
Brokered revenue attributable to each product sales type is included here because the volume of product that we purchase is subsequently sold to separate counterparties in accordance with existing sales contracts under which we also sell our production.
−Removed: Accounts receivable attributable to our revenue contracts with customers was $ 291.5 million at June 30, 2021 and $ 237.8 million at December 31, 2020.
+Added: Accounts receivable attributable to our revenue contracts with customers was $ 361.9 million at September 30, 2021 and $ 237.8 million at December 31, 2020.
Revenue attributable to each of our identified revenue streams is disaggregated below (in thousands):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Natural gas sales
3 unchanged sentences
Other marketing revenue (1)
−Removed: (1) The six months ended June 30, 2021 includes $ 8.8 million received as part of a capacity release agreement.
+Added: The nine months ended September 30, 2021 includes $ 8.8 million received as part of a capacity release agreement.
(6) INCOME TAXES
3 unchanged sentences
Income taxes for discrete items are computed and recorded in the period that a specific transaction occurs.
−Removed: For the three months and six months ended June 30, 2021 and 2020, our overall effective tax rate was different than the federal statutory rate due primarily to state income taxes, equity compensation, valuation allowances and other tax items.
+Added: For the three months and nine months ended September 30, 2021 and 2020, our overall effective tax rate was different than the federal statutory rate due primarily to state income taxes, equity compensation, valuation allowances and other tax items.
+Added: Current income taxes reflect estimated state income taxes due for 2021 which is based on our estimated earnings, taking into account state tax rates and laws regarding NOL limitations.
(7) INCOME (LOSS) PER COMMON SHARE
3 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: Net (loss) income, as reported
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
+Added: Net loss, as reported
Participating earnings (a)
−Removed: Basic net (loss) income attributed to common shareholders
+Added: Basic net loss attributed to common shareholders
Reallocation of participating earnings (a)
−Removed: Diluted net (loss) income attributed to common
−Removed: Net (loss) income per common share:
−Removed: (a) Restricted Stock Awards represent participating securities because they participate in nonforfeitable dividends or distributions with common equity owners.
+Added: Diluted net loss attributed to common
+Added: Net loss per common share:
+Added: Restricted Stock Awards represent participating securities because they participate in nonforfeitable dividends or distributions with common equity owners.
Income allocable to participating securities represents the distributed and undistributed earnings attributable to the participating securities.
2 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Weighted average common shares outstanding –
basic and diluted
−Removed: Weighted average common shares outstanding-basic for second quarter 2021 excludes 7.1 million shares of restricted stock held in our deferred compensation plan compared to 6.4 million shares in second quarter 2020 (although all awards are issued and outstanding upon grant).
−Removed: Weighted average common shares outstanding-basic for first six months 2021 excludes 6.6 million shares of restricted stock compared to 4.8 million for first six months 2020.
−Removed: Due to our net loss for second quarter and first six months 2021 and 2020, we excluded all equity-grants from the computation of diluted loss per share because the effect would have been anti-dilutive to the computations.
+Added: Weighted average common shares outstanding-basic for third quarter 2021 excludes 6.5 million shares of restricted stock held in our deferred compensation plan compared to 6.2 million shares in third quarter 2020 (although all awards are issued and outstanding upon grant).
+Added: Weighted average common shares outstanding-basic for first nine months 2021 excludes 6.6 million shares of restricted stock compared to 5.3 million for first nine months 2020.
+Added: Due to our net loss for third quarter and first nine months 2021 and 2020, we excluded all equity-grants from the computation of diluted loss per share because the effect would have been anti-dilutive to the computations.
(8) Capitalized Costs and Accumulated Depreciation, Depletion and Amortization (a)
+Added: September 30,
(in thousands)
4 unchanged sentences
Net capitalized costs
−Removed: (a) Includes capitalized asset retirement costs and the associated accumulated amortization.
+Added: Includes capitalized asset retirement costs and the associated accumulated amortization.
(9) INDEBTEDNESS
−Removed: We had the following debt outstanding as of the dates shown below (bank debt interest rate at June 30, 2021 is shown parenthetically).
−Removed: No interest was capitalized during the six months ended June 30, 2021 or the year ended December 31, 2020 (in thousands).
+Added: We had the following debt outstanding as of the dates shown below (bank debt interest rate at September 30, 2021 is shown parenthetically).
+Added: No interest was capitalized during the nine months ended September 30, 2021 or the year ended December 31, 2020 (in thousands).
+Added: September 30,
Bank debt ( 2.4 %)
22 unchanged sentences
The bank credit facility also provides for a borrowing base subject to periodic redeterminations and for event-driven unscheduled redeterminations.
−Removed: As of June 30, 2021, our bank group was composed of twenty-five financial institutions.
+Added: As of September 30, 2021, our bank group was composed of twenty-five financial institutions.
The borrowing base may be increased or decreased based on our request and sufficient proved reserves, as determined by the bank group.
−Removed: commitment amount may be increased to the borrowing base, subject to payment of a mutually acceptable commitment fee to those banks agreeing to participate in the facility increase.
+Added: The commitment amount may be increased to the borrowing base, subject to payment of a mutually acceptable commitment fee to those banks agreeing to participate in the facility increase.
Borrowings under the bank credit facility can either be at the alternate base rate (ABR, as defined in the bank credit facility agreement) plus a spread ranging from 0.25 % to 1.25 % or LIBOR borrowings at the LIBOR Rate (as defined in the bank credit facility agreement) plus a spread ranging from 1.25 % to 2.25 %.
1 unchanged sentence
We may elect, from time to time, to convert all or any part of our LIBOR loans to base rate loans or to convert all or any of the base rate loans to LIBOR loans.
−Removed: The weighted average interest rate was 2.0 % for second quarter 2021 compared to 2.7 % for second quarter 2020.
−Removed: The weighted average interest rate was 2.1 % for first six months 2021 compared to 2.9 % for first six months 2020.
+Added: The weighted average interest rate was 2.0 % for third quarter 2021 compared to 2.4 % for third quarter 2020.
+Added: The weighted average interest rate was 2.1 % for first nine months 2021 compared to 2.7 % for first nine months 2020.
A commitment fee is paid on the undrawn balance based on an annual rate of 0.30 % to 0.375 %.
−Removed: At June 30, 2021, the commitment fee was 0.30 % and the interest rate margin was 1.75 % on our LIBOR loans and 0.75 % on our ABR loans.
−Removed: As part of our redetermination completed in March 2021, our borrowing base was reaffirmed for $ 3.0 billion and our bank commitment was also reaffirmed at $ 2.4 billion.
−Removed: On June 30, 2021, bank commitments totaled $ 2.4 billion and the outstanding balance under our bank credit facility was $ 121.0 million, before deducting debt issuance costs.
+Added: At September 30, 2021, the commitment fee was 0.30 % and the interest rate margin was 1.75 % on our LIBOR loans and 0.75 % on our ABR loans.
+Added: As part of our redetermination completed in September 2021, our borrowing base was reaffirmed for $ 3.0 billion and our bank commitment was also reaffirmed at $ 2.4 billion.
+Added: On September 30, 2021, bank commitments totaled $ 2.4 billion and the outstanding balance under our bank credit facility was $ 30.0 million, before deducting debt issuance costs.
Additionally, we had $ 334.6 million of undrawn letters of credit, leaving $ 2.0 billion of committed borrowing capacity available under the facility.
4 unchanged sentences
persons outside the United States in compliance with Rule 144A and Regulation S of the Securities Act of 1933, as amended (the Securities Act).
−Removed: Interest due on the 8.25% Notes is payable semi-annually in January and July and is unconditionally guaranteed on a senior unsecured basis by all of our subsidiary guarantors.
+Added: Interest due on the 8.25%
+Added: Notes is payable semi-annually in January and July and is unconditionally guaranteed on a senior unsecured basis by all of our subsidiary guarantors.
On or after January 15, 2027, we may redeem the 8.25% Notes, in whole or in part and from time to time, at 100 % of the principal amounts plus accrued and unpaid interest.
16 unchanged sentences
The guarantees by our subsidiaries, which are directly or indirectly owned by Range, of our senior notes and our bank credit facility are full and unconditional and joint and several, subject to certain customary release provisions.
−Removed: liabilities and results of operations of Range and our guarantor subsidiaries are not materially different than our consolidated financial statements.
+Added: The assets, liabilities and results of operations of Range and our guarantor subsidiaries are not materially different than our consolidated financial statements.
A subsidiary guarantor may be released from its obligations under the guarantee:
5 unchanged sentences
In addition, the ratio of the present value of proved reserves (as defined in the bank credit facility agreement) to total debt must be equal to or greater than 1.5 until Range has two investment grade ratings.
−Removed: We were in compliance with applicable covenants under the bank credit facility at June 30, 2021.
+Added: We were in compliance with applicable covenants under the bank credit facility at September 30, 2021.
(10) ASSET RETIREMENT OBLIGATIONS
2 unchanged sentences
The inputs are calculated based on historical data as well as current estimated costs.
−Removed: A reconciliation of our liability for plugging and abandonment costs for the six months ended June 30, 2021 and the year ended December 31, 2020 is as follows (in thousands):
+Added: A reconciliation of our liability for plugging
+Added: and abandonment costs for the nine months ended September 30, 2021 and the year ended December 31, 2020 is as follows (in thousands):
+Added: September 30,
Beginning of period
11 unchanged sentences
We do not enter into these arrangements for speculative or trading purposes.
−Removed: We utilize commodity swaps, collars, three-way collars or swaptions to (1) reduce the effect of price volatility of the commodities we produce and sell and (2) support our annual capital budget and expenditure plans.
−Removed: The fair value of our derivative contracts, represented by the estimated amount that would be realized upon termination, based on a comparison of the contract price and a reference price, generally the New York Mercantile Exchange (NYMEX) for natural gas and crude oil or Mont Belvieu for NGLs, approximated a net loss of $ 287.7 million at June 30, 2021.
+Added: We utilize commodity swaps, calls, collars, three-way collars or swaptions to (1) reduce the effect of price volatility of the commodities we produce and sell and (2) support our annual capital budget and expenditure plans.
+Added: The fair value of our derivative contracts, represented by the estimated amount that would be realized upon termination, based on a comparison of the contract price and a reference price, generally the New York Mercantile Exchange (NYMEX) for natural gas and crude oil or Mont Belvieu for NGLs, approximated a net loss of $ 776.1 million at September 30, 2021.
These contracts expire monthly through December 2023.
−Removed: The following table sets forth our commodity-based derivative
−Removed: volumes by year as of June 30, 2021, excluding our basis and freight swaps and divestiture contingent consideration which are discussed separately below:
+Added: The following table sets forth our commodity-based derivative volumes by year as of September 30, 2021, excluding our basis and freight swaps and divestiture contingent consideration which are discussed separately below:
Contract Type
10 unchanged sentences
251,781 Mmbtu/day
−Removed: Crude Oil (1)
+Added: January - March 2022
+Added: 80,000 Mmbtu/day
+Added: 60,000 Mmbtu/day
7,500 bbls/day
2 unchanged sentences
6,000 bbls/day
−Removed: July –
−Removed: September 2021
4,000 bbls/day
+Added: $ 1.20 /gallon
NGLs (NC4-Normal Butane)
4 unchanged sentences
3,000 bbls/day
+Added: January - March 2022
2,656 bbls/day
+Added: January - March 2022
2,000 bbls/day
−Removed: (1) We also sold natural gas call swaptions of 180,000 Mmbtu/day for 2022 at a weighted average price of $ 2.86 .
−Removed: In addition, we sold oil call swaptions of 1,000 bbls per day for 2022 at a weighted average price of $ 54.00 .
+Added: We also sold natural gas call swaptions of 80,000 Mmbtu/day for 2022 at a weighted average price of $ 2.80 and 70,000 Mmbtu/day for 2023 at a weighted average price of $3.04 .
Every derivative instrument is required to be recorded on the balance sheet as either an asset or a liability measured at its fair value.
1 unchanged sentence
Basis Swap Contracts
−Removed: In addition to the swaps, collars and swaptions described above, at June 30, 2021, we had natural gas basis swap contracts which lock in the differential between NYMEX Henry Hub and certain of our physical pricing indices.
+Added: In addition to the swaps, collars and swaptions described above, at September 30, 2021, we had natural gas basis swap contracts which lock in the differential between NYMEX Henry Hub and certain of our physical pricing indices.
These contracts settle monthly through December 2024 and include a total volume of 204,967,500 Mmbtu.
−Removed: The fair value of these contracts was a gain of $ 25.7 million at June 30, 2021.
−Removed: At June 30, 2021, we also had propane spread swap contracts which lock in the differential between Mont Belvieu and international propane indices.
+Added: The fair value of these contracts was a gain of $ 8.5 million at September 30, 2021.
+Added: At September 30, 2021, we also had propane spread swap contracts which lock in the differential between Mont Belvieu and international propane indices.
The contracts settle monthly through 2022.
−Removed: The fair value of these contracts was a gain of $ 376,000 at June 30, 2021.
+Added: The fair value of these contracts was a gain of $ 394,000 at September 30, 2021.
Freight Swap Contracts
In connection with our international propane sales, we utilize propane swaps.
−Removed: To further hedge our propane price, at June 30, 2021, we had freight swap contracts on the Baltic Exchange which lock in the freight rate for a specific trade route.
−Removed: These contracts settle monthly and cover 10,000 metric tons per month in third quarter 2021 and 12,000 metric tons for the remainder of 2021.
−Removed: The fair value of these contracts equal to a gain of $ 37,000 at June 30, 2021.
+Added: To further hedge our propane price, at September 30, 2021, we had freight swap contracts on the Baltic Exchange which lock in the freight rate for a specific trade route.
+Added: These contracts settle monthly and cover 12,000 metric tons for the remainder of 2021 and cover 7,000 metric tons for first quarter 2022.
+Added: The fair value of these contracts equal to a loss of $ 26,000 at September 30, 2021.
Divestiture Contingent Consideration
1 unchanged sentence
The remaining contingent consideration of up to $ 75.0 million is based on future achievement of natural gas and oil prices based on published indexes and realized NGLs prices of the buyer for the years 2021, 2022 and 2023.
−Removed: All changes in the
−Removed: fair value are recognized as a gain or loss in earnings in the period they occur in derivative fair value income or loss in our consolidated statements of operations.
−Removed: For first six months 2021, this fair value has increased $ 21.4 million.
+Added: All changes in the fair value are recognized as a gain or loss in earnings in the period they occur in derivative fair value income or loss in our consolidated statements of operations.
+Added: For first nine months 2021, this fair value has increased $ 34.3 million for a fair value of $ 50.2 million as of September 30, 2021.
Derivative Assets and Liabilities
−Removed: The combined fair value of derivatives included in the accompanying consolidated balance sheets as of June 30, 2021 and December 31, 2020 is summarized below.
+Added: The combined fair value of derivatives included in the accompanying consolidated balance sheets as of September 30, 2021 and December 31, 2020 is summarized below.
The assets and liabilities are netted where derivatives with both gain and loss positions are held by a single counterparty and we have master netting arrangements.
The tables below provide additional information relating to our master netting arrangements with our derivative counterparties (in thousands):
−Removed: June 30, 2021
+Added: September 30, 2021
Offset in the
9 unchanged sentences
–C3 propane spread swaps
−Removed: –C3 propane collars
−Removed: –NC4 butane collars
−C5 natural gasoline swaps
−Removed: −C5 natural gasoline collars
−swaps
Divestiture contingent consideration
−Removed: June 30, 2021
+Added: September 30, 2021
(Liabilities)
8 unchanged sentences
–three-way collars
+Added: –calls
–basis swaps
–swaps
−Removed: –swaptions
–C3 propane spread swaps
50 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Commodity swaps
13 unchanged sentences
These standards establish a fair value hierarchy that prioritizes the inputs used in applying the various valuation techniques.
−Removed: Inputs broadly refer to the assumptions that market participants use to make pricing decisions, including assumptions about risk.
+Added: Inputs broadly refer to the assumptions that market participants use to make
+Added: pricing decisions, including assumptions about risk.
Level 1 inputs are given the highest priority in the fair value hierarchy while Level 3 inputs are given the lowest priority.
20 unchanged sentences
The following tables present the fair value hierarchy for assets and liabilities measured at fair value, on a recurring basis (in thousands):
−Removed: Fair Value Measurements at June 30, 2021 using:
+Added: Fair Value Measurements at September 30, 2021 using:
Quoted Prices
Identical Assets
+Added: September 30,
Trading securities held in the deferred compensation
3 unchanged sentences
–three-way collars
+Added: –calls
–basis swaps
17 unchanged sentences
Derivatives in Level 2 are measured at fair value with a market approach using third-party pricing services which have been corroborated with data from active markets or broker quotes.
−Removed: As of June 30, 2021, a portion of our natural gas and oil derivative instruments contain swaptions where the counterparty has the right, but not the obligation, to enter into a fixed price swap on a pre-determined date.
−Removed: In addition to our swaptions in Level 3 at June 30, 2021, we have NGLs collars.
+Added: As of September 30, 2021, a portion of our natural gas and oil derivative instruments contain swaptions where the counterparty has the right, but not the obligation, to enter into a fixed price swap on a pre-determined date.
+Added: If exercised, the swaption contract becomes a swap treated consistently with our fixed-price swaps.
+Added: In addition to our swaptions in Level 3 at September 30, 2021, we have NGLs collars.
Derivatives in Level 3 are also measured at fair value with a market approach using third-party pricing services which have been corroborated with data from active markets or broker quotes.
However, the subjectivity in the volatility factors utilized can cause a significant change in the fair value measurement of our derivatives in Level 3 and is considered a significant unobservable input.
−Removed: For our swaptions, we used a weighted average implied volatility of 23 % for natural gas and 31 % for crude oil.
+Added: At September 30, 2021, for our swaptions, we used a weighted average implied volatility of 40 % for natural gas.
We also utilized a range of implied volatilities from 36 % to 55 % for our NGLs collars with a weighted average implied volatility of 42 %.
The following is a reconciliation of the beginning and ending balances for derivative instruments classified as Level 3 in the fair value hierarchy (in thousands):
+Added: September 30,
Balance at December 31, 2020
2 unchanged sentences
Transfers out of Level 3
−Removed: Balance at June 30, 2021
+Added: Balance at September 30, 2021
Divestiture Contingent Consideration.
5 unchanged sentences
Interest, dividends, and mark-to-market gains or losses are included in deferred compensation plan expense in the accompanying consolidated statements of operations.
−Removed: For second quarter 2021, interest and dividends were $ 118,000 and the mark-to-market adjustment was a gain of $ 2.3 million compared to interest and dividends of $ 124,000 and a mark-to-market gain of $ 7.6 million in second quarter 2020.
−Removed: For first six months 2021, interest and dividends were $ 227,000 and the mark-to-market adjustment was a gain of $ 4.3 million compared to interest and dividends of $ 227,000 and a mark-to-market adjustment of a loss of $ 3.0 million in first six months 2020.
+Added: For third quarter 2021, interest and dividends were $ 314,000 and the mark-to-market adjustment was a loss of $ 1.2 million compared to interest and dividends of $ 114,000 and a mark-to-market gain of $ 3.2 million in third quarter 2020.
+Added: For first nine months 2021, interest and dividends were $ 541,000 and the mark-to-market adjustment was a gain of $ 3.1 million compared to interest and dividends of $ 385,000 and a mark-to-market adjustment of a gain of $ 234,000 in first nine months 2020.
Fair Values –
5 unchanged sentences
These assets were sold in third quarter 2020.
−Removed: There were no proved property impairment charges in second quarter or first six months 2021.
+Added: In conjunction with the sale of our North Louisiana assets in third quarter 2020, we recorded impairment expense associated with our headquarters office lease of $ 2.0 million.
+Added: There were no proved property impairment charges in third quarter or first nine months 2021.
Fair Values –
−Removed: The following presents the carrying amounts and the fair values of our financial instruments as of June 30, 2021 and December 31, 2020 (in thousands):
−Removed: June 30, 2021
+Added: The following presents the carrying amounts and the fair values of our financial instruments as of September 30, 2021 and December 31, 2020 (in thousands):
+Added: September 30, 2021
December 31, 2020
17 unchanged sentences
Deferred compensation plan (c)
−Removed: (a) Marketable securities, which are held in our deferred compensation plans, are actively traded on major exchanges.
−Removed: (b) The book value of our bank debt approximates fair value because of its floating rate structure.
+Added: Marketable securities, which are held in our deferred compensation plans, are actively traded on major exchanges.
+Added: The book value of our bank debt approximates fair value because of its floating rate structure.
The fair value of our senior notes and our senior subordinated notes is based on end of period market quotes which are Level 2 inputs.
−Removed: (c) The fair value of our deferred compensation plan is updated to the closing price on the balance sheet date which is a Level 1 input.
+Added: The fair value of our deferred compensation plan is updated to the closing price on the balance sheet date which is a Level 1 input.
Our current assets and liabilities include financial instruments, the most significant of which are trade accounts receivable and payable.
3 unchanged sentences
Concentrations of Credit Risk
−Removed: As of June 30, 2021, our primary concentrations of credit risk are the risks of not collecting accounts receivable and the risk of a counterparty’s failure to perform under derivative obligations.
+Added: As of September 30, 2021, our primary concentrations of credit risk are the risks of not collecting accounts receivable and the risk of a counterparty’s failure to perform under derivative obligations.
Most of our receivables are from a diverse group of companies, including major energy companies, pipeline companies, local distribution companies, financial institutions and end-users in various industries.
Letters of credit or other appropriate assurances are obtained as deemed necessary to limit our risk of loss.
−Removed: Our allowance for uncollectable receivables was $ 393,000 at June 30, 2021 compared to $ 3.0 million at December 31, 2020.
+Added: Our allowance for uncollectable receivables was $ 373,000 at September 30, 2021 compared to $ 3.0 million at December 31, 2020.
Our derivative exposure to credit risk is diversified primarily among major investment grade financial institutions, where we have master netting agreements which provide for offsetting payables against receivables from separate derivative contracts.
1 unchanged sentence
We may also limit the level of exposure with any single counterparty.
−Removed: At June 30, 2021, our derivative counterparties include nineteen financial institutions, of which all but five are secured lenders in our bank credit facility.
−Removed: At June 30, 2021, our net derivative asset includes a net receivable of $ 9.7 million from four of these counterparties that are not participants in our bank credit facility and an aggregate net payable of $ 5.6 million to one of these counterparties.
+Added: At September 30, 2021, our derivative counterparties include nineteen financial institutions, of which all but five are secured lenders in our bank credit facility.
+Added: At September 30, 2021, our net derivative liability includes a net
+Added: receivable of $ 2.4 million from four of these counterparties that are not participants in our bank credit facility and an aggregate net payable of $ 9.2 million to one of these counterparties.
Allowance for Expected Credit Losses.
11 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Direct operating expense
2 unchanged sentences
General and administrative expense
+Added: Termination costs
Total stock-based compensation expense
19 unchanged sentences
In first quarter 2021, our internal performance metrics were changed to focus on debt reduction and to include an environmental component.
−Removed: For shares granted in first quarter 2021, the performance conditions will be measured against internal metrics of Debt/EBITDAX (earnings before interest, taxes, depreciation, amortization and exploration expense) and emission intensity performance.
+Added: For shares granted in first quarter 2021, the performance conditions will be measured against internal metrics of Debt/EBITDAX (earnings before
+Added: interest, taxes, depreciation, amortization and exploration expense) and emission intensity performance.
These shares will vest at the end of three years and the three-year performance target was set in first quarter 2021.
6 unchanged sentences
Equity Awards
−Removed: In first six months 2021, we granted 2.3 million restricted stock Equity Awards to employees at an average grant date fair value of $ 10.20 which generally vest over a three-year period compared to 4.5 million at an average grant date fair value of $ 3.42 in first six months 2020.
−Removed: We recorded compensation expense for these outstanding awards of $ 10.3 million in first six months 2021 compared to $ 10.0 million in the same period of 2020.
+Added: In first nine months 2021, we granted 2.3 million restricted stock Equity Awards to employees at an average grant date fair value of $ 10.20 which generally vest over a three-year period compared to 4.5 million at an average grant date fair value of $ 3.42 in first nine months 2020.
+Added: We recorded compensation expense for these outstanding awards of $ 15.0 million in first nine months 2021 compared to $ 13.4 million in the same period of 2020.
Restricted stock Equity Awards are not issued to employees until such time as they are vested.
2 unchanged sentences
Liability Awards
−Removed: In first six months 2021, we granted 1.2 million shares of restricted stock Liability Awards as compensation to employees at an average grant date fair value of $ 9.30 which generally vest at the end of a three-year period and 97,000 shares were granted to non-employee directors at an average price of $ 11.99 with vesting at the end of a one-year period.
−Removed: In first six months 2020, we granted 3.3 million shares of restricted stock Liability Awards as compensation to employees at an average grant date fair value of $ 3.03 with vesting generally over a three-year period and 217,000 were granted to non-employee directors at an average price of $ 5.38 with vesting at the end of a one-year period.
−Removed: We recorded compensation expense for these Liability Awards of $ 5.7 million in first six months 2021 compared to $ 5.4 million in first six months 2020.
+Added: In first nine months 2021, we granted 1.2 million shares of restricted stock Liability Awards as compensation to employees at an average grant date fair value of $ 9.30 which generally vest at the end of a three-year period and 102,000 shares were granted to non-employee directors at an average price of $ 12.49 with vesting at the end of a one-year period.
+Added: In first nine months 2020, we granted 3.3 million shares of restricted stock Liability Awards as compensation to employees at an average grant date fair value of $ 3.03 with vesting generally over a three-year period and 217,000 were granted to non-employee directors at an average price of $ 5.38 with vesting at the end of a one-year period.
+Added: We recorded compensation expense for these Liability Awards of $ 8.4 million in first nine months 2021 compared to $ 7.9 million in first nine months 2020.
The majority of these awards are held in our deferred compensation plan, are classified as a liability and are remeasured at fair value each reporting period.
This mark-to-market amount is reported as deferred compensation expense in our consolidated statements of operations (see additional discussion below).
−Removed: The following is a summary of the status of our non-vested restricted stock outstanding at June 30, 2021:
+Added: The following is a summary of the status of our non-vested restricted stock outstanding at September 30, 2021:
Restricted Stock
7 unchanged sentences
Outstanding at December 31, 2020
−Removed: Outstanding at June 30, 2021
+Added: Outstanding at September 30, 2021
Stock-Based Performance Units
4 unchanged sentences
See additional information above for shares granted in first quarter 2021.
−Removed: The following is a summary of our non-vested internal performance awards outstanding at June 30, 2021:
+Added: The following is a summary of our non-vested internal performance awards outstanding at September 30, 2021:
Average Grant
3 unchanged sentences
Vested and issued (b)
−Removed: Outstanding at June 30, 2021
−Removed: (a) Amounts granted reflect the number of performance units granted;
+Added: Outstanding at September 30, 2021
+Added: Amounts granted reflect the number of performance units granted;
however, the actual payout of shares will be between zero and 200 % depending on achievement of specifically identified performance targets.
Units granted in first quarter 2021 were to our CEO, CFO and COO only.
−Removed: (b) For certain of the PS-PSUs and RS-PSUs awards issued during 2018 the aggregate payout was approximately 137 % of target for the March 2018 grants with a positive performance adjustment of 290,140 shares.
−Removed: We recorded compensation expense of $ 1.8 million in first six months 2021 compared to expense of $ 1.8 million in first six months 2020.
+Added: For certain of the PS-PSUs and RS-PSUs awards issued during 2018 the aggregate payout was approximately 137 % of target for the March 2018 grants with a positive performance adjustment of 290,140 shares.
+Added: We recorded compensation expense of $ 3.8 million in first nine months 2021 compared to expense of $ 2.3 million in first nine months 2020.
TSR-PSUs granted are earned, or not earned, based on the comparative performance of Range’s common stock measured against a predetermined group of companies in the peer group over a three-year performance period.
−Removed: The fair value of the TSR-PSUs is estimated on the date of grant using a Monte Carlo simulation model which utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair
−Removed: value of the award.
+Added: The fair value of the TSR-PSUs is estimated on the date of grant using a Monte Carlo simulation model which utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award.
The fair value is recognized as stock-based compensation expense over the three-year performance period.
1 unchanged sentence
The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the life of the grant.
−Removed: The following assumptions were used to estimate the fair value of TSR-PSUs granted during first six months 2021 and 2020:
−Removed: Six Months Ended
+Added: The following assumptions were used to estimate the fair value of TSR-PSUs granted during first nine months 2021 and 2020:
+Added: Nine Months Ended
+Added: September 30,
Risk-free interest rate
5 unchanged sentences
Vested and issued (b)
−Removed: Outstanding at June 30, 2021
−Removed: (a ) These amounts reflect the number of performance units granted.
+Added: Outstanding at September 30, 2021
+Added: These amounts reflect the number of performance units granted.
The actual payout of shares may be between zero and 200 % of the performance units granted depending on the total shareholder return ranking compared to our peer companies at the vesting date.
−Removed: (b) Includes TSR-PSUs awards issued related to the 2018 performance period where the return on our common stock was was negative and therefore, the performance multiple and actual payout was reduced to 100 %.
−Removed: We recorded TSR-PSUs compensation expense of $ 1.2 million in first six months 2021 compared to $ 1.5 million in the same period of 2020.
+Added: Includes TSR-PSUs awards issued related to the 2018 performance period where the return on our common stock was negative and therefore, the performance multiple and actual payout was reduced to 100 %.
+Added: We recorded TSR-PSUs compensation expense of $ 1.9 million in first nine months 2021 compared to $ 1.9 million in the same period of 2020.
Fair value is amortized over the performance period with no adjustment to the expense recorded for actual targets achieved.
2 unchanged sentences
These benefits are not funded in advance and are provided up to age 65 or at the date they become eligible for Medicare, subject to various cost-sharing features.
−Removed: There was approximately $ 90,000 of estimated prior service costs amortized from accumulated other comprehensive income into general and administrative expense in both the three months ended June 30, 2021 and 2020 and approximately $ 185,000 amortized in both the six months ended June 30, 2021 and 2020.
+Added: There was approximately $ 90,000 of estimated prior service costs amortized from accumulated other comprehensive income into general and administrative expense in both the three months ended September 30, 2021 and 2020 and approximately $ 275,000 amortized in both the nine months ended September 30, 2021 and 2020.
Those employees that qualify for this retirement health care plan are required to provide reasonable notice of retirement and provide one year of service after an equity grant date to be fully vested in the grant.
5 unchanged sentences
Our stock held in the Rabbi Trust is treated as a liability award as employees are allowed to take withdrawals from the Rabbi Trust either in cash or in Range stock.
−Removed: The liability for the vested portion of the stock held in the Rabbi Trust is reflected as deferred compensation liability in the accompanying consolidated balance sheets and is adjusted to fair value each reporting period by a charge or credit to deferred compensation plan expense on our consolidated statements of operations.
+Added: The liability for the vested portion of the stock held in the Rabbi Trust is reflected as deferred compensation liability in the accompanying consolidated balance sheets and is adjusted to fair value each
+Added: reporting period by a charge or credit to deferred compensation plan expense on our consolidated statements of operations.
The assets of the Rabbi Trust, other than our common stock, are invested in marketable securities and reported at their market value as other assets in the accompanying consolidated balance sheets.
The deferred compensation liability reflects the vested market value of the marketable securities and Range stock held in the Rabbi Trust.
−Removed: Changes in the market value of the marketable securities and changes in the fair value of the deferred compensation plan liability are charged or credited to deferred
−Removed: compensation plan expense each quarter.
−Removed: We recorded a mark-to-market loss of $ 35.5 million in second quarter 2021 compared to a mark-to-market loss of $ 12.6 million in second quarter 2020.
−Removed: We recorded mark-to-market loss of $ 55.3 million in first six months 2021 compared to a loss of $ 4.1 million in first six months 2020.
−Removed: The Rabbi Trust held 6.5 million shares ( 5.0 million of which were vested) of Range stock at June 30, 2021 compared to 6.1 million shares ( 5.0 million of which were vested) at December 31, 2020.
+Added: Changes in the market value of the marketable securities and changes in the fair value of the deferred compensation plan liability are charged or credited to deferred compensation plan expense each quarter.
+Added: We recorded a mark-to-market loss of $ 34.3 million in third quarter 2021 compared to a mark-to-market loss of $ 6.2 million in third quarter 2020.
+Added: We recorded mark-to-market loss of $ 89.6 million in first nine months 2021 compared to a loss of $ 10.3 million in first nine months 2020.
+Added: The Rabbi Trust held 6.4 million shares ( 5.3 million of which were vested) of Range stock at September 30, 2021 compared to 6.1 million shares ( 5.0 million of which were vested) at December 31, 2020.
(14) EXIT AND TERMINATION COSTS
2 unchanged sentences
The estimated obligations are included in current and long-term divestiture contract obligation in our consolidated balance sheets.
−Removed: In first six months 2021, we recorded accretion expense of $ 25.0 million.
+Added: In first nine months 2021, we recorded accretion expense of $ 36.6 million.
In second quarter 2021, we recorded a net favorable adjustment of $ 28.2 million to reduce this obligation due to a reduction of certain contractual payments compared to those originally estimated and a change to our estimated drilling plans of the buyer.
−Removed: The estimated discounted divestiture contract obligation was $ 436.1 million at June 30, 2021.
+Added: The estimated discounted divestiture contract obligation was $ 426.6 million at September 30, 2021.
In second quarter 2020, we negotiated capacity releases on certain transportation pipelines in Pennsylvania effective May 31, 2020 and extending through the remainder of the contract.
We recorded termination costs of $ 10.4 million which represented the discounted present value of our remaining obligation to the third-party.
−Removed: The estimated remaining discounted obligation for these transportation capacity releases as of June 30, 2021 was $ 8.4 million.
+Added: The estimated remaining discounted obligation for these transportation capacity releases as of September 30, 2021 was $ 7.9 million.
Termination Costs
+Added: In third quarter 2020, we completed the sale of our North Louisiana assets.
+Added: We recorded $ 2.5 million of severance costs and stock-based compensation expense associated with this sale.
+Added: In third quarter 2020, we also announced an additional reduction in our work force and recorded $ 3.7 million of severance costs and stock-based compensation expense related to this reduction in force.
In first quarter 2020, we completed the sale of our shallow legacy assets in northwestern Pennsylvania and we recorded $ 1.6 million of severance costs which is primarily related to the sale of these assets.
−Removed: The following summarizes our exit and termination costs for the three and six months ended June 30, 2021 and 2020 (in thousands):
+Added: The following summarizes our exit and termination costs for the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Severance costs
2 unchanged sentences
Divestiture contract obligation (including accretion of
−Removed: The following details the accrued exit and termination cost liability activity for the six months ended June 30, 2021 (in thousands):
+Added: One-time minimum volume commitment contract
+Added: Stock-based compensation
+Added: The following details the accrued exit and termination cost liability activity for the nine months ended September 30, 2021 (in thousands):
Balance at December 31, 2020
2 unchanged sentences
Divestiture contract obligation - changes in estimate
−Removed: Balance at June 30, 2021
+Added: Balance at September 30, 2021
Includes the divestiture contract obligation and the transportation contract capacity release obligation.
3 unchanged sentences
The following is a schedule of changes in the number of common shares outstanding since the beginning of 2020:
+Added: September 30,
Beginning balance
8 unchanged sentences
Under this program, we may repurchase shares in open market transactions, from time to time, in accordance with applicable SEC rules and federal securities laws.
−Removed: The following is a schedule of the change in treasury shares for the three and six months ended June 30, 2021:
+Added: The following is a schedule of the change in treasury shares for the three and nine months ended September 30, 2021:
+Added: September 30,
+Added: September 30,
Beginning balance
3 unchanged sentences
(16) SUPPLEMENTAL CASH FLOW INFORMATION
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
(in thousands)
Net cash provided from operating activities included:
−Removed: Income taxes refunded from taxing authorities
+Added: Income taxes (paid) refunded from taxing authorities
Interest paid
1 unchanged sentence
Increase in asset retirement costs capitalized
−Removed: Increase (decrease) in accrued capital expenditures
+Added: Decrease in accrued capital expenditures
(17) COMMITMENTS AND CONTINGENCIES
−Removed: We are the subject of, or party to, a number of pending or threatened legal actions and administrative proceedings arising in the ordinary course of our business including, but not limited to, royalty claims, contract claims and environmental claims.
+Added: We are the subject of, or party to, a number of pending or threatened legal actions, administrative proceedings or investigations arising in the ordinary course of our business including, but not limited to, royalty claims, contract claims and environmental claims.
While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these actions, proceedings or claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future annual results of operations.
1 unchanged sentence
The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management.
−Removed: While management believes these reserves to be adequate, it is reasonably possible we could incur additional losses with respect to those matters in
−Removed: which reserves have been established.
+Added: While management believes these reserves to be adequate, it is reasonably possible we could incur additional losses with respect to those matters in which reserves have been established.
We will continue to evaluate our litigation on a quarterly basis and will establish and adjust any litigation reserves as appropriate to reflect our assessment of the then current status of litigation.
We have incurred and will continue to incur capital, operating and remediation expenditures as a result of environmental laws and regulations.
−Removed: As of June 30, 2021, liabilities for remediation were not material.
−Removed: We are not aware of any environmental claims existing as of June 30, 2021 that have not been provided for or would otherwise have a material impact on our financial position or results of operations.
+Added: As of September 30, 2021, liabilities for remediation were not material.
+Added: We are not aware of any environmental claims existing as of September 30, 2021 that have not been provided for or would otherwise have a material impact on our financial position or results of operations.
Environmental liabilities normally involve estimates that are subject to revision until final resolution, settlement or remediation occurs.
10 unchanged sentences
We also maintain that the market fully absorbed the information disclosed by the DEP on February 10, 2021 and the stock price on that day did not decrease.
−Removed: Given our view of the litigation as baseless, we plan to vigorously defend the litigation.
+Added: Given our view of the litigation as baseless, we plan to vigorously defend the litigation and moved for its dismissal.
( 18) SUSPENDED EXPLORATORY WELL COSTS
2 unchanged sentences
If an exploratory well is determined to be impaired, the well costs are charged to exploration expense in the accompanying consolidated statements of operations.
−Removed: The following table reflects the changes in capitalized exploratory well costs for the six months ended June 30, 2021 (in thousands):
+Added: The following table reflects the changes in capitalized exploratory well costs for the nine months ended September 30, 2021 (in thousands):
Balance at beginning of period
10 unchanged sentences
(19) Costs Incurred for Property Acquisition, Exploration and Development (a)
+Added: September 30,
(in thousands)
5 unchanged sentences
Total costs incurred
−Removed: (a) Includes costs incurred whether capitalized or expensed.
−Removed: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
+Added: Includes costs incurred whether capitalized or expensed.
+Added: MANAGEMENT’S DISCUSSION AND ANA LYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview of Our Business
1 unchanged sentence
We operate in one segment and have a single company-wide management team that administers all properties as a whole rather than by discrete operating segments.
−Removed: We track only basic operational data by area.
−Removed: We do not maintain complete separate financial statement information by area.
We measure financial performance as a single enterprise and not on a geographical or an area-by-area basis.
6 unchanged sentences
operate safely and efficiently;
−Removed: target limiting capital spending at or below cash flow;
−Removed: reduce direct emissions and target net zero direct emissions by 2025;
+Added: target capital spending at or below operating cash flow;
+Added: reduce emissions and target net zero direct greenhouse gas emissions by 2025;
achieve competitive returns on investments;
−Removed: preserve liquidity and improve financial strength;
+Added: manage liquidity and further improve financial strength;
focus on organic opportunities through disciplined capital investments;
1 unchanged sentence
attract and retain quality employees;
−Removed: align incentives with our stockholders’
+Added: align employee incentives with our stockholders’
interests and key business objectives.
12 unchanged sentences
Prices for commodities, such as hydrocarbons, are inherently volatile and are affected by many factors outside of our control.
−Removed: Natural gas and oil benchmarks increased in second quarter 2021 when compared to the same period in 2020 and also in the first six months 2021 when compared to the same period in 2020.
+Added: Natural gas and oil benchmarks increased in third quarter 2021 when compared to the same period in 2020 and also in the first nine months 2021 when compared to the same period in 2020.
As a result, we experienced increased price realizations.
−Removed: NYMEX natural gas futures have shown some improvements based on market expectations that gas supplies will be limited due to slower growth of associated gas related activity in oil basins combined with reduced activity in natural gas basins and growing demand for liquefied natural gas exports.
−Removed: Through the end of second quarter 2021, uncertainty continued related to how long it will take to return to a balanced oil supply and demand environment.
−Removed: Other factors such as the duration of the COVID-19 pandemic and the speed and effectiveness of vaccine distributions to combat the virus are expected to directly impact the
−Removed: recovery of world economic growth and the demand for oil.
+Added: NYMEX natural gas futures have shown improvements based on market expectations that gas supplies will be limited due to slower growth of associated gas related activity in oil basins combined with reduced activity in natural gas basins and growing demand for liquefied natural gas exports.
+Added: While the current outlook on natural gas prices is generally favorable, in the event further disruptions occur and continue for an extended period of time, our operations could be impacted, commodity prices could decline and our costs may increase.
+Added: Through the end of third quarter 2021, uncertainty continued related to how long it will take to return to a balanced oil and natural gas supply and demand environment.
+Added: Other factors such as the duration of the COVID-19 pandemic and the speed and effectiveness of vaccine distributions or other medical advances to combat the virus
+Added: are expected to directly impact the recovery of world economic growth and the demand for oil, natural gas and NGLs.
As we continue to monitor the impact of the actions of OPEC and other large producing nations and the uncertainty associated with governmental policies aimed at redirecting fossil fuel consumption towards lower carbon energy, we expect prices for some or all of the commodities we produce to remain volatile.
−Removed: Throughout the COVID-19 pandemic, we leveraged our emergency response protocols and business continuity plan to help manage our operations and workforce.
−Removed: Much of our workforce worked remotely for a significant period of time since the pandemic began.
−Removed: During June 2021, the majority of our corporate workforce returned to the office.
−Removed: Working remotely did not negatively impact our ability to maintain operations and did not cause us to incur significant additional expenses.
−Removed: The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three and six months ended June 30, 2021 and 2020:
+Added: The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Average NYMEX prices (a)
2 unchanged sentences
Mont Belvieu NGLs composite (per gallon) (b)
−Removed: (a) Based on weighted average of bid week prompt month prices on the New York Mercantile Exchange (“NYMEX”).
−Removed: (b) Based on our estimated NGLs product composition per barrel.
+Added: Based on weighted average of bid week prompt month prices on the New York Mercantile Exchange (“NYMEX”).
+Added: Based on our estimated NGLs product composition per barrel.
Our price realizations (not including the impact of our derivatives) may differ from these benchmarks for many reasons, including quality, location or production being sold at different indices.
Consolidated Results of Operations
−Removed: Overview of Second Quarter 2021 Results
−Removed: Our financial results are significantly impacted by commodity prices.
−Removed: For second quarter 2021, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 75% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) somewhat offset by lower production volumes when compared to the same quarter of 2020.
−Removed: Daily production averaged 2.1 Bcfe in second quarter 2021 compared to 2.3 Bcfe in the same period of the prior year due to the sale of our North Louisiana properties in third quarter 2020.
−Removed: In addition, net operating costs were lower when compared to the same period of 2020.
−Removed: During second quarter 2021, we recognized a net loss of $156.5 million, or $0.65 per diluted common share compared to a net loss of $167.6 million, or $0.70 per diluted common share, during second quarter 2020.
−Removed: The improvement in our net loss for second quarter 2021 compared to the second quarter 2020 includes significantly higher realized prices, lower net operating costs and a favorable divestiture contract obligation adjustment offset by reduced derivative fair value income (or the non-cash fair value adjustment related to our derivatives) due to higher commodity prices and higher deferred compensation expense.
−Removed: Our second quarter 2021 financial and operating performance included the following results:
+Added: Overview of Third Quarter 2021 Results
+Added: For third quarter 2021, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 102% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) somewhat offset by lower production volumes when compared to the same quarter of 2020.
+Added: Daily production averaged 2.1 Bcfe in third quarter 2021 compared to 2.2 Bcfe in the same period of the prior year which is lower primarily due to the sale of our North Louisiana properties in third quarter 2020.
+Added: During third quarter 2021, we recognized a net loss of $350.3 million, or $1.44 per diluted common share compared to a net loss of $748.8 million, or $3.12 per diluted common share, during third quarter 2020.
+Added: The improvement in our net loss for third quarter 2021 compared to the third quarter 2020 includes significantly higher realized prices and lower divestiture contract obligation expenses offset by an increase in derivative fair value loss (or the non-cash fair value adjustment related to our derivatives) due to higher commodity prices and higher deferred compensation expense.
+Added: Our third quarter 2021 financial and operating performance included the following results:
+Added: reduced debt by $91.0 million with cash flow from operations;
+Added: cash flow from operating activities increased $216.1 million from third quarter 2020;
revenue from the sale of natural gas, NGLs and oil increased 123% from the same period of 2020 with a 129% increase in average realized prices (before cash settlements on our derivatives) partially offset by lower production volumes;
revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 48% from the same period of 2020;
−Removed: direct operating expense per mcfe was 9% lower than the same period of 2020 (see discussion on page 34);
−Removed: reduced our depletion, depreciation and amortization (“DD&A”) rate per mcfe by 4% from the same period of 2020;
+Added: direct operating expense per mcfe was $0.10 in both third quarter 2021 and 2020;
+Added: general and administrative expense per mcfe increased 32% from same quarter 2020 primarily due to higher legal settlements;
+Added: reduced depletion, depreciation and amortization (“DD&A”) rate per mcfe by 2% from the same period of 2020.
+Added: Our cash flow from operating activities in third quarter 2021 was $191.9 million, an increase of $216.1 million from third quarter 2020 with significantly higher realized prices when compared to third quarter 2020 partially offset by slightly lower production volumes.
+Added: Cash flow from operating activities was also favorably impacted by lower net cash outflow from working capital.
+Added: Overview of First Nine Months 2021 Results
+Added: For first nine months 2021, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 68% increase in net realized prices (average prices including all derivatives settlements and third-party transportation costs
+Added: paid by us) somewhat offset by lower production volumes when compared to the same period of 2020.
+Added: Daily production averaged 2.1 Bcfe in first nine months 2021 compared to 2.3 Bcfe in the same period of the prior year due to the sale of our North Louisiana properties in third quarter 2020.
+Added: In addition, direct operating costs were lower when compared to the same period of 2020.
+Added: During first nine months 2021, we recognized a net loss of $479.6 million, or $1.98 per diluted common share compared to a net loss of $750.2 million, or $3.10 per diluted common share, during the same period of 2020.
+Added: The improvement in our net loss for first nine months 2021 from first nine months 2020 is primarily due to significantly higher realized prices, lower proved property impairment and lower divestiture contract obligation expenses partially offset by an increase in derivative fair value loss (or the non-cash fair value adjustment related to our derivatives) and a lower gain on asset sales and higher deferred compensation plan expenses.
+Added: Our first nine months financial and operating performance included the following results:
reduced debt by $135.3 million with cash flow from operations;
−Removed: Our cash flow from operating activities in second quarter 2021 was $174.2 million, an increase of $95.4 million from second quarter 2020.
−Removed: Second quarter 2021 cash flow from operating activities included significantly higher realized prices and lower net operating costs compared to second quarter 2020.
−Removed: Overview of First Six months 2021 Results
−Removed: For first six months 2021, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 50% increase in net realized prices (average prices including all derivatives settlements and third-party transportation costs paid by us) somewhat offset by lower production volumes when compared to the same period of 2020.
−Removed: Daily production average 2.1 Bcfe in first six months 2021 compared to 2.3 Bcfe in the same period of the prior year due to the sale of our North Louisiana properties in third quarter 2020.
−Removed: In addition, net operating costs were lower when compared to the same period of 2020.
−Removed: During first six months 2021, we recognized a net loss of $129.3 million, or $0.53 per diluted common share compared to a net loss of $1.4 million, or $0.01 per diluted common share, during the same period of 2020.
−Removed: The increase in our net loss for first six months 2021 from first six months 2020 is primarily due to reduced derivative fair value income (or the non-cash fair value adjustment related to our derivatives), a lower gain on asset sales and higher deferred compensation plan expense partially offset by significantly higher realized prices, lower net operating costs, lower proved property impairment and lower DD&A expense.
−Removed: Our first six months financial and operating performance included the following results:
+Added: cash flow from operating activities increased 166% from the same period of 2020;
revenue from the sale of natural gas, NGLs and oil increased 78% from the same period of 2020 with a 94% increase in average realized prices (before cash settlements on our derivatives) partially offset by lower production volumes;
1 unchanged sentence
direct operating expense per mcfe was 17% lower than the same period of 2020 (see discussion on page 34);
−Removed: reduced transportation, gathering, processing and compression on an absolute basis by 1% when compared to the same period of 2020 (see discussion on page 32);
−Removed: reduced general and administrative expense on an absolute basis by 3% when compared to the same period of 2020 (see discussion on page 35);
−Removed: reduced our DD&A rate per mcfe by 4% from the same period of 2020;
+Added: general and administrative expense per mcfe increased 16% from first nine months 2020 due to higher legal expenses and legal settlements (see discussion on page 34);
+Added: reduced DD&A rate per mcfe by 4%, or $31.7 million from the same period of 2020;
issued $600.0 million of new senior notes and used the proceeds to reduce our bank credit facility borrowing.
−Removed: reduced debt by $44.3 million with cash flow from operations.
−Removed: Our cash flow from operating activities in first six months 2021 was $283.4 million, an increase of $80.2 million from first six months 2020.
−Removed: First six months 2021 cash flow from operating activities included significantly higher realized prices and lower net operating costs partially offset by the impact of negative working capital due to higher commodity prices.
+Added: Our cash flow from operating activities in first nine months 2021 was $475.3 million, an increase of $296.3 million from first nine months 2020.
+Added: First nine months 2021 cash flow from operating activities included significantly higher realized prices and lower net operating costs partially offset by the impact of negative working capital due to higher commodity prices.
Natural Gas, NGLs and Oil Sales, Production and Realized Price Calculations
1 unchanged sentence
Our revenues are generally recognized when control of the product is transferred to the customer and collectability is reasonably assured.
−Removed: In second quarter 2021, natural gas, NGLs and oil sales increased 78% compared to second quarter 2020 with a 99% increase in average realized prices (before cash settlements on our derivatives) partially offset by a 10% reduction in production volumes.
−Removed: In first six months 2021, natural gas, NGLs and oil sales increased 57% compared to first six months 2020 with a 75% increase in average realized prices partially offset by a 10% reduction in production volumes.
−Removed: The following table illustrates the primary components of natural gas, NGLs, oil and condensate sales for the three and six months ended June 30, 2021 and 2020 (in thousands):
+Added: In third quarter 2021, natural gas, NGLs and oil sales increased 123% compared to third quarter 2020 with a 129% increase in average realized prices (before cash settlements on our derivatives) partially offset by a 3% reduction in production volumes.
+Added: In first nine months 2021, natural gas, NGLs and oil sales increased 78% compared to first nine months 2020 with a 94% increase in average realized prices partially offset by a 8% reduction in production volumes.
+Added: The following table illustrates the primary components of natural gas, NGLs, oil and condensate sales for the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Natural gas, NGLs and oil sales
1 unchanged sentence
Our production is determined by drilling success which offsets the natural decline of our natural gas and oil reserves through production and asset sales.
−Removed: Second quarter 2020 production volumes from our North Louisiana properties were
−Removed: approximately 179.2 Mmcfe per day and were 172.6 mcfe per day for first six months 2020.
+Added: Third quarter 2020 production volumes from our North Louisiana properties were approximately 72.5 Mmcfe per day and were 139.0 mcfe per day for first nine months 2020.
These assets were sold in third quarter 2020.
−Removed: Our production for the three and six months ended June 30, 2021 and 2020 is set forth in the following table:
+Added: Our production for the three and nine months ended September 30, 2021 and 2020 is set forth in the following table:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Production (a)
6 unchanged sentences
Total (mcfe) (b)
−Removed: (a) Represents volumes sold regardless of when produced.
−Removed: (b) Oil and NGLs volumes are converted to mcfe at the rate of one barrel equals six mcf based upon the approximate relative energy content of oil to natural gas, which is not indicative of the relationship between oil and natural gas prices.
−Removed: Our average realized price received (including all derivative settlements and third-party transportation costs) during second quarter 2021 was $1.56 per mcfe compared to $0.89 per mcfe in second quarter 2020.
−Removed: Our average realized price received (including all derivative settlements and third-party transportation costs) during first six months 2020 was $1.55 per mcfe compared to $1.03 per mcfe in first six months 2020.
+Added: Represents volumes sold regardless of when produced.
+Added: Oil and NGLs volumes are converted to mcfe at the rate of one barrel equals six mcf based upon the approximate relative energy content of oil to natural gas, which is not indicative of the relationship between oil and natural gas prices.
+Added: Our average realized price received (including all derivative settlements and third-party transportation costs) during third quarter 2021 was $2.00 per mcfe compared to $0.99 per mcfe in third quarter 2020.
+Added: Our average realized price received (including all derivative settlements and third-party transportation costs) during first nine months 2021 was $1.71 per mcfe compared to $1.02 per mcfe in first nine months 2020.
We believe computed final realized prices should include the total impact of transportation, gathering, processing and compression expense.
2 unchanged sentences
Average realized prices (excluding derivative settlements) do include transportation costs where we receive net revenue proceeds from purchasers.
−Removed: Average realized price calculations for three and six months ended June 30, 2021 and 2020 are shown below:
+Added: Average realized price calculations for three and nine months ended September 30, 2021 and 2020 are shown below:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Average Prices
18 unchanged sentences
Total (per mcfe) (a)
−Removed: (a) Oil and NGLs volumes are converted to mcfe at the rate of one barrel equals six mcf based upon the approximate relative energy content of oil to natural gas, which is not indicative of the relationship between oil and natural gas prices.
+Added: Oil and NGLs volumes are converted to mcfe at the rate of one barrel equals six mcf based upon the approximate relative energy content of oil to natural gas, which is not indicative of the relationship between oil and natural gas prices.
Realized prices include the impact of basis differentials and gains or losses realized from our basis hedging.
2 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Average natural gas differentials below NYMEX
−Removed: Realized gains (losses) on basis hedging
+Added: Realized gains on basis hedging
The following tables reflect our production and average realized commodity prices (excluding derivative settlements and third-party transportation costs paid by Range) (in thousands, except prices):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Price (per mcf)
2 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Price (per bbl)
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Price (per bbl)
2 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Price (per mcfe)
1 unchanged sentence
Total natural gas, NGLs and oil
−Removed: Transportation, gathering, processing and compression expense was $282.8 million in second quarter 2021 compared to $278.9 million in second quarter 2020.
−Removed: These third-party costs are higher in second quarter 2021 when compared to second quarter 2020 due to the impact of higher NGLs prices which result in higher processing costs and higher fuel costs partially offset by transportation capacity releases in Pennsylvania and the impact of the sale of our North Louisiana assets in third quarter 2020.
−Removed: Transportation, gathering, processing and compression expense was $557.2 million in first six months 2021 compared to $563.6 million in first six months 2020.
−Removed: These third-party costs are lower when compared to the same period of the prior year due to transportation capacity released in Pennsylvania and the impact of the sale of our North Louisiana assets in third quarter 2020 partially offset by the impact of higher NGLs prices which result in higher processing costs and higher fuel costs.
+Added: Transportation, gathering, processing and compression expense was $296.5 million in third quarter 2021 compared to $268.1 million in third quarter 2020.
+Added: These third-party costs are higher in third quarter 2021 when compared to third quarter 2020 due to the impact of higher NGLs prices which result in higher processing costs, higher fuel costs and higher gathering costs partially offset by the impact of the sale of our North Louisiana assets in third quarter 2020.
+Added: Transportation, gathering, processing and compression expense was $853.7 million in first nine months 2021 compared to $831.7 million in first nine months 2020.
+Added: These third-party costs are higher when compared to the same period of the prior year due to the impact of higher NGLs prices which results in higher processing costs and higher fuel costs somewhat offset by the impact of the sale of our North Louisiana assets in third quarter 2020 and transportation capacity released in Pennsylvania.
We have included these costs in the calculation of average realized prices (including all derivative settlements and third-party transportation expenses paid by Range).
−Removed: The following table summarizes transportation, gathering, processing and compression expense for the three and six months ended June 30, 2021 and 2020 on a per mcf and per barrel basis (in thousands, except for costs per unit):
+Added: The following table summarizes transportation, gathering, processing and compression expense for the three and nine months ended September 30, 2021 and 2020 on a per mcf and per barrel basis (in thousands, except for costs per unit):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Transportation, gathering,
3 unchanged sentences
Oil (per bbl)
−Removed: Derivative fair value (loss) income was a loss of $249.7 million in second quarter 2021 compared to a loss of $6.3 million in second quarter 2020.
−Removed: Derivative fair value loss was $307.6 million in first six months 2021 compared to income of $226.9 million in first six months 2020.
+Added: Derivative fair value (loss) income was a loss of $652.2 million in third quarter 2021 compared to a loss of $124.7 million in third quarter 2020.
+Added: Derivative fair value loss was $959.8 million in first nine months 2021 compared to income of $102.2 million in first nine months 2020.
All of our derivatives are accounted for using the mark-to-market accounting method.
2 unchanged sentences
Gains on our derivatives generally indicate potentially lower wellhead revenues in the future while losses indicate potentially higher future wellhead revenues.
−Removed: The following table summarizes the impact of our commodity derivatives for the three and six months ended June 30, 2021 and 2020 (in thousands):
+Added: The following table summarizes the impact of our commodity derivatives for three months and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Derivative fair value (loss) income per consolidated statements of
18 unchanged sentences
This also includes the change in fair value of our divestiture contingent consideration.
−Removed: Brokered natural gas, marketing and other revenue in second quarter 2021 was $62.6 million compared to $33.6 million in second quarter 2020 which is the result of significantly higher broker sales prices somewhat offset by lower broker sales volumes (volumes not related to our production).
−Removed: Brokered natural gas, marketing and other revenue in first six months 2021 was $143.1 million compared to $62.2 million in first six months 2020 which is the result of significantly higher broker sales volumes, higher broker sales prices and $8.8 million received as part of a capacity release agreement.
+Added: Brokered natural gas, marketing and other revenue in third quarter 2021 was $105.6 million compared to $42.5 million in third quarter 2020 which is the result of significantly higher broker sales prices and higher broker sales volumes (volumes not related to our production).
+Added: Brokered natural gas, marketing and other revenue in first nine months 2021 was $248.7 million compared to $104.7 million in first nine months 2020 which is the result of significantly higher broker sales prices, slightly higher broker sales volumes and $8.8 million received as part of a capacity release agreement.
We continue to optimize our transportation portfolio using these volumes.
2 unchanged sentences
We believe some of our expense fluctuations are best analyzed on a unit-of-production or per mcfe basis.
−Removed: The following table presents information about certain of our expenses on a per mcfe basis for the three and six months ended June 30, 2021 and 2020:
+Added: The following table presents information about certain of our expenses on a per mcfe basis for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Direct operating expense
3 unchanged sentences
Depletion, depreciation and amortization expense
−Removed: Direct operating expense was $19.8 million in second quarter 2021 compared to $24.4 million in second quarter 2020.
+Added: Direct operating expense was $20.2 million in third quarter 2021 compared to $19.5 million in third quarter 2020.
Direct operating expenses include normally recurring expenses to operate and produce our wells, non-recurring well workovers and repair-related expenses.
−Removed: Our direct operating costs decreased in second quarter 2021 primarily due to the impact of the sale of our higher cost North Louisiana properties in third quarter 2020.
−Removed: Our production volumes decreased 10% in second quarter 2021.
−Removed: We incurred $1.7 million of workover costs in second quarter 2021 compared to $1.1 million in second quarter 2020.
−Removed: On a per mcfe basis, direct operating expense in second quarter 2021 decreased 9% to $0.10 from $0.11 in the same period of 2020 with the decrease primarily due to the impact of the sale of our North Louisiana properties.
−Removed: Direct operating expense was $37.4 million in first six months 2021 compared to $56.4 million in the same period 2020.
−Removed: Our direct operating expenses decreased in first six months 2021 compared to the same period of the prior year due to the impact of the sale of our higher cost North Louisiana properties in third quarter 2020 and lower workover costs.
−Removed: Our production volumes decreased 10% in first six months 2021.
−Removed: We incurred $2.4 million of workover costs in first six months 2021 compared to $5.6 million in first six months 2020.
+Added: Our direct operating costs increased in third quarter 2021 primarily due to higher water handling/hauling costs and higher stock-based compensation partially offset by the impact of the sale of our North Louisiana properties.
+Added: Our production volumes decreased 3% in third quarter 2021.
+Added: We incurred $896,000 of workover costs in third quarter 2021 compared to $856,000 in third quarter 2020.
+Added: On a per mcfe basis, direct operating expense in both third quarter 2021 and 2020 was $0.10.
+Added: Direct operating expense was $57.7 million in first nine months 2021 compared to $75.9 million in the same period 2020.
+Added: Our direct operating expenses decreased in first nine months 2021 compared to the same period of the prior year due to the impact of the sale of our higher cost North Louisiana properties in third quarter 2020 and lower workover costs partially offset by higher water handling/hauling costs.
+Added: Our production volumes decreased 8% in first nine months 2021.
+Added: We incurred $3.3 million of workover costs in first nine months 2021 compared to $6.4 million in first nine months 2020.
On a per mcfe basis, direct operating costs decreased 17% from $0.12 to $0.10 with the decrease due to the impact of the sale of our higher cost North Louisiana properties.
−Removed: The following table summarizes direct operating expense per mcfe for the three and six months ended June 30, 2021 and 2020:
+Added: The following table summarizes direct operating expense per mcfe for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Direct operating
6 unchanged sentences
which functions as a tax on unconventional natural gas and oil production from the Marcellus Shale in Pennsylvania.
−Removed: This impact fee was $8.4 million in second quarter 2021 compared to $2.7 million in second quarter 2020 due to higher natural gas prices partially offset by the mix of wells relative to the impact fee structure where the fee declines over
+Added: This impact fee was $7.1 million in third quarter 2021 compared to $4.5 million in third quarter 2020 due to higher natural gas prices partially offset by the mix of wells relative to the impact fee structure where the fee declines over time.
In second quarter, we adjusted our impact fee accrual for the six months 2021 to reflect the impact higher natural gas prices have on impact fee rates.
These rates are based on benchmark natural gas prices.
−Removed: Production and ad valorem taxes (excluding the impact fee) were $12,000 in second quarter 2021 compared to $2.8 million in second quarter 2020 with the decrease due to the impact of the sale of our North Louisiana assets.
−Removed: Included in first six months 2021 is a $13.0 million impact fee compared to $8.8 million in first six months 2020 with the increase due to higher natural gas prices.
−Removed: Production and ad valorem taxes (excluding the impact fee) were $19,000 in first six months 2021 compared to $5.8 million in first six months 2020 with the decrease due to the impact of the sale of our North Louisiana assets.
−Removed: The following table summarizes production and ad valorem taxes per mcfe for the three and six months ended June 30, 2021 and 2020:
+Added: Production and ad valorem taxes (excluding the impact fee) were $13,000 in third quarter 2021 compared to $1.6 million in second quarter 2020 with the decrease due to the impact of the sale of our North Louisiana assets.
+Added: Included in first nine months 2021 is a $20.1 million impact fee compared to $13.3 million in first nine months 2020 with the increase due to higher natural gas prices.
+Added: Production and ad valorem taxes (excluding the impact fee) were $32,000 in first nine months 2021 compared to $7.4 million in first nine months 2020 with the decrease due to the impact of the sale of our North Louisiana assets.
+Added: The following table summarizes production and ad valorem taxes per mcfe for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Production and ad valorem taxes
Production and ad valorem taxes
−Removed: Total production and ad valorem
−Removed: General and administrative (G&A) expense was $40.2 million in second quarter 2021 compared to $38.3 million in second quarter 2020.
−Removed: The second quarter 2021 increase of $1.9 million when compared to the same period of 2020 is primarily due to higher legal and general office expenses including technology costs of $1.9 million and higher employee benefit costs, including healthcare, of $1.1 million partially offset by lower legal settlements.
−Removed: At June 30, 2021, the number of G&A employees decreased 12% when compared to June 30, 2020.
−Removed: On a per mcfe basis, second quarter 2021 G&A expense was 17% higher than second quarter 2020 due to higher legal, technology and employee benefit costs along with the impact of lower production volumes.
−Removed: G&A expense for first six months 2021 decreased $2.3 million when compared to the same period 2020 due to lower travel and general office expenses including technology costs and lower legal settlements partially offset by higher legal expenses.
−Removed: On a per mcfe basis, first six months 2021 G&A expense increased 11% from first six months 2020 due to higher legal expenses and the impact of lower production volumes.
−Removed: The following table summarizes G&A expenses on a per mcfe basis for the three and six months ended June 30, 2021 and 2020:
+Added: Total production and ad valorem taxes
+Added: General and administrative (G&A) expense was $49.1 million in third quarter 2021 compared to $38.2 million in third quarter 2020.
+Added: The third quarter 2021 increase of $10.9 million when compared to the same period of 2020 is primarily due to higher accrual for legal settlements of $7.2 million, higher stock-based compensation and higher general office expenses partially offset by lower salaries and benefits.
+Added: At September 30, 2021, the number of G&A employees decreased 7% when compared to September 30, 2020.
+Added: On a per mcfe basis, third quarter 2021 G&A expense was 32% higher than third quarter 2020 due to higher legal settlements and higher stock-based compensation expenses.
+Added: G&A expense for first nine months 2021 increased $8.6 million when compared to the same period 2020 due to higher legal expenses and legal settlements of $7.5 million, higher stock-based compensation and higher general office expenses somewhat offset by lower salaries and benefits.
+Added: On a per mcfe basis, first nine months 2021 G&A expense increased 16% from
+Added: first nine months 2020 due to higher legal expenses and legal settlements, higher stock-based compensation and the impact of lower production volumes.
+Added: The following table summarizes G&A expenses on a per mcfe basis for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
General and administrative
2 unchanged sentences
Total general and administrative expense
−Removed: Interest expense was $57.3 million in second quarter 2021 compared to $48.6 million in second quarter 2020.
−Removed: Interest expense was $114.2 million for first six months 2021 compared to $96.1 million for first six months 2020.
−Removed: The following table presents information about interest expense per mcfe for the three and six months ended June 30, 2021 and 2020:
+Added: Interest expense was $56.8 million in third quarter 2021 compared to $48.0 million in third quarter 2020.
+Added: Interest expense was $171.0 million for first nine months 2021 compared to $144.1 million for first nine months 2020.
+Added: The following table presents information about interest expense per mcfe for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Bank credit facility
−Removed: Amortization of deferred financing costs
+Added: Amortization of deferred financing costs and other
Total interest expense
1 unchanged sentence
Average interest rate (a)
−Removed: (a) Includes commitment fees but excludes debt issue costs and amortization of discounts and premiums.
−Removed: On an absolute basis, the increase in interest expense for second quarter 2021 from the same period of 2020 was primarily due to higher average interest rates partially offset by slightly lower overall average outstanding debt balances.
−Removed: Average debt outstanding on the bank credit facility for second quarter 2021 was $195.5 million compared to $681.3 million in second quarter 2020 and the weighted average interest rate on the bank credit facility was 2.0% in second quarter 2021 compared to 2.7% in second quarter 2020.
−Removed: On an absolute basis, the increase in interest expense for first six months 2021 from the same period 2020 was primarily due to higher average interest rates partially offset by slightly lower overall average outstanding debt balances.
−Removed: Average debt outstanding on the bank credit facility was $208.0 million for first six months 2021 compared to $600.6 million for first six months 2020 and the weighted average interest rates were 2.1% in first six months 2021 compared to 2.9% in first six months 2020.
−Removed: Depletion, depreciation and amortization expense was $90.6 million in second quarter 2021 compared to $104.6 million in second quarter 2020.
+Added: Includes commitment fees but excludes debt issue costs and amortization of discounts and premiums.
+Added: On an absolute basis, the increase in interest expense for third quarter 2021 from the same period of 2020 was primarily due to higher average interest rates partially offset by slightly lower overall average outstanding debt balances.
+Added: Average debt outstanding on the bank credit facility for third quarter 2021 was $139.0 million compared to $684.6 million in third quarter 2020 and the weighted average interest rate on the bank credit facility was 2.0% in third quarter 2021 compared to 2.4% in third quarter 2020.
+Added: On an absolute basis, the increase in interest expense for first nine months 2021 from the same period 2020 was primarily due to higher average interest rates partially offset by slightly lower overall average outstanding debt balances.
+Added: Average debt outstanding on the bank credit facility was $185.0 million for first nine months 2021 compared to $628.6 million for first nine months 2020 and the weighted average interest rates on the bank credit facility were 2.1% in first nine months 2021 compared to 2.7% in first nine months 2020.
+Added: Depletion, depreciation and amortization expense was $93.1 million in third quarter 2021 compared to $96.2 million in third quarter 2020.
This decrease is due to a 2% decrease in depletion rates and a 3% decrease in production volumes.
−Removed: Depletion expense, the largest component of DD&A expense, was $0.46 per mcfe in second quarter 2021 compared to $0.48 per mcfe in second quarter 2020.
+Added: Depletion expense, the largest component of DD&A expense, was $0.46 per mcfe in third quarter 2021 compared to $0.47 per mcfe in third quarter 2020.
We have historically adjusted our depletion rates in the fourth quarter of each year based on the year-end reserve report and at other times during the year when circumstances indicate there has been a significant change in reserves or costs.
Our depletion rate per mcfe continues to decline due to asset sales and the mix of production from our properties with lower depletion rates.
−Removed: DD&A expense was $179.0 million in first six months 2021 compared to $207.6 million in the same period of 2020.
+Added: DD&A expense was $272.1 million in first nine months 2021 compared to $303.8 million in the same period of 2020.
This is due to a 4% decrease in depletion rates and a 8% decrease in production volumes.
−Removed: Depletion expense per mcfe was $0.46 per mcfe in first six months 2021 compared to $0.48 per mcfe in the same period of 2020.
−Removed: The following table summarizes DD&A expense per mcfe for the three and six months ended June 30, 2021 and 2020:
+Added: Depletion expense per mcfe was $0.46 per mcfe in first nine months 2021 compared to $0.48 per mcfe in the same period of 2020.
+Added: The following table summarizes DD&A expense per mcfe for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Depletion and amortization
5 unchanged sentences
Stock-based compensation includes the amortization of restricted stock grants and PSUs.
−Removed: The following table details the allocation of stock-based compensation to functional expense categories for the three and six months ended June 30, 2021 and 2020 (in thousands):
+Added: The following table details the allocation of stock-based compensation to functional expense categories for the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Direct operating expense
2 unchanged sentences
General and administrative expense
+Added: Termination costs
Total stock-based compensation
−Removed: Brokered natural gas and marketing expense was $69.0 million in second quarter 2021 compared to $38.2 million in second quarter 2020 due to higher broker purchase volumes (volumes not related to our production) and significantly higher commodity prices.
−Removed: Brokered natural gas and marketing was $141.3 million in first six months 2021 compared to $70.8 million in first six months 2020 due to significantly higher broker purchase volumes and significantly higher commodity prices.
−Removed: The following table details our brokered natural gas, marketing and other net margin for the three and six months ended June 30, 2021 and 2020 (in thousands):
+Added: Brokered natural gas and marketing expense was $105.8 million in third quarter 2021 compared to $48.0 million in third quarter 2020 due to higher broker purchase volumes (volumes not related to our production) and significantly higher commodity prices.
+Added: Brokered natural gas and marketing expense was $247.2 million in first nine months 2021 compared to $118.8 million in first nine months 2020 due to significantly higher broker purchase volumes and significantly higher commodity prices.
+Added: The following table details our brokered natural gas, marketing and other net margin for the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Brokered natural gas and marketing
7 unchanged sentences
Includes transportation costs.
−Removed: Exploration expense was $5.0 million in second quarter 2021 compared to $8.0 million in second quarter 2020 due to lower delay rentals and other expenses and lower personnel costs.
−Removed: Exploration expense was $10.6 million in first six months 2021 compared to $15.1 million in first six months 2020 due to lower delay rentals and other expenses and lower personnel costs.
−Removed: The following table details our exploration expense for the three and six months ended June 30, 2021 and 2020 (in thousands):
+Added: Exploration expense was $5.9 million in third quarter 2021 compared to $8.1 million in third quarter 2020 due to lower delay rentals.
+Added: Exploration expense was $16.4 million in first nine months 2021 compared to $23.2 million in first nine months 2020 due to lower delay rentals and other expenses and lower personnel costs.
+Added: The following table details our exploration expense for the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Delay rentals and other
2 unchanged sentences
Total exploration expense
−Removed: Abandonment and impairment of unproved properties was $2.2 million in second quarter 2021 compared to $5.5 million in second quarter 2020.
−Removed: Abandonment and impairment of unproved properties was $5.2 million in first six months 2021 compared to $10.9 million in first six months 2020.
−Removed: Abandonment and impairment of unproved properties for second quarter and first six months 2021 declined when compared to the same periods of 2020 due to lower estimated expirations in Pennsylvania.
−Removed: Exit and termination costs was a gain of $15.9 million in second quarter 2021 compared to an expense of $10.3 million in second quarter 2020.
−Removed: In second quarter 2021, we recorded $12.0 million accretion expense related to retained liabilities for certain gathering, transportation and processing obligations extending until 2030.
−Removed: In addition, we recorded a gain of $28.2 million to reduce our original estimate of these obligations due to payments being lower than our forecast and a change in our forecasted drilling plans of the buyer.
−Removed: In second quarter 2020, we negotiated capacity releases on certain transportation pipelines in Pennsylvania and recorded termination costs of $10.4 million which represents the discounted present value of our remaining obligation to the third party.
−Removed: In first quarter 2020, we completed the sale of our legacy assets in Northwest Pennsylvania and recorded $1.6 million of employee related expenses which were primarily related to the sale of this asset.
−Removed: Deferred compensation plan expense was a loss of $35.5 million in second quarter 2021 compared to a loss of $12.6 million in second quarter 2020.
+Added: Abandonment and impairment of unproved properties was $2.0 million in third quarter 2021 compared to $5.7 million in third quarter 2020.
+Added: Abandonment and impairment of unproved properties was $7.2 million in first nine months 2021 compared to $16.6 million in first nine months 2020.
+Added: Abandonment and impairment of unproved properties for third quarter and first nine months 2021 declined when compared to the same periods of 2020 due to lower estimated expirations in Pennsylvania.
+Added: Exit and termination costs was $11.8 million in third quarter 2021 compared to $521.6 million in third quarter 2020.
+Added: In third quarter 2021, we recorded $11.8 million accretion expense primarily related to retained liabilities for certain gathering, transportation and processing obligations extending until 2030.
+Added: In third quarter 2020, we sold our North Louisiana assets and retained certain gathering, transportation and processing obligations which extend into 2030.
+Added: The fair value of our estimated obligations was recorded in third quarter 2020 and totaled $479.8 million.
+Added: In addition, as part of retaining these contract obligations, we paid $28.5 million to a midstream company to reduce these financial commitments.
+Added: In third quarter 2020, we also recorded $6.2 million of severance and stock-based compensation related to the sale of this asset along with an additional general reduction in our work force.
+Added: Exit and termination costs was $9.6 million in first nine months 2021 compared to $533.5 million in first nine months 2020.
+Added: In first nine months 2021, we recorded $37.2 million accretion expense related to these retained liabilities and in second quarter 2021, we recorded a gain of $28.2 million to reduce our original estimate of these retained obligations due to payments being lower than our forecast and a change in our forecasted drilling plans of the buyer.
+Added: In second quarter 2020, we also negotiated capacity releases on certain transportation pipelines in Pennsylvania and recorded termination costs of $10.4 million which represents the discounted present value of our remaining obligation to the third party.
+Added: Deferred compensation plan expense was a loss of $34.3 million in third quarter 2021 compared to a loss of $6.2 million in third quarter 2020.
This non-cash item relates to the increase or decrease in value of the liability associated with our common stock that is vested and held in our deferred compensation plan.
The deferred compensation liability is adjusted to fair value by a charge or a credit to deferred compensation plan expense.
−Removed: Our stock price increased from $10.33 at March 31, 2021 to $16.76 at June 30, 2021.
−Removed: In the same period of the prior year, our stock price increased from $2.28 at March 31, 2020 to $5.63 at June 30, 2020.
−Removed: During first six months 2021, deferred compensation was a loss of $55.3 million compared to a loss of $4.1 million in the same period of 2020.
−Removed: Our stock price increased from $6.70 at December 31, 2020 to $16.76 at June 30, 2021.
−Removed: In the same period of the prior year, our stock price increased from $4.85 at December 31, 2019 to $5.63 at June 30, 2020.
−Removed: Loss (gain) on early extinguishment of debt was a loss of $63,000 in second quarter 2021 compared to a gain of $9.0 million in second quarter 2020.
+Added: Our stock price increased from $16.76 at June 30, 2021 to $22.63 at September 30, 2021.
+Added: In the same period of the prior year, our stock price increased from $5.63 at June 30, 2020 to $6.62 at September 30, 2020.
+Added: During first nine months 2021, deferred compensation was a loss of $89.6 million compared to a loss of $10.3 million in the same period of 2020.
+Added: Our stock price increased from $6.70 at December 31, 2020 to $22.63 at September 30, 2021.
+Added: In the same period of the prior year, our stock price increased from $4.85 at December 31, 2019 to $6.62 at September 30, 2020.
+Added: Loss (gain) on early extinguishment of debt was a loss of $7.8 million in third quarter 2020.
+Added: In third quarter 2020, we purchased for cash $500.0 million aggregate principal amount of various senior and senior subordinated notes due 2021, 2022 and 2023.
+Added: We recorded a loss on early extinguishment of debt of $8.0 million, net of transaction call premium costs and expensing the remaining deferred financing costs.
+Added: Loss on extinguishment of debt was a gain of $14.1 million in nine months 2020.
In second quarter 2020, we repurchased in the open market certain of our senior and senior subordinated notes at a discount and recognized a gain of $9.0 million.
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We recognized a gain on early extinguishment of debt in first quarter 2020 of $30.4 million, net of transaction costs and the expensing of the remaining deferred financing costs on the repurchased debt.
−Removed: Impairment of proved properties and other assets was $77.0 million in first six months 2020.
−Removed: There were no proved property impairments in first six months 2021.
+Added: Impairment of proved properties and other assets was $79.0 million in first nine months 2020.
+Added: There were no proved property impairments in first nine months 2021.
In fourth quarter 2019, we recorded impairment expense related to our oil and gas properties in North Louisiana due to a shift in business strategy and the possibility of a divestiture of those assets.
In first quarter 2020, additional impairment of $77.0 million was recorded related to these North Louisiana assets based on market indications of fair value for these assets.
−Removed: Loss (gain) on the sale of assets was a gain of $646,000 in first six months 2021 compared to a gain of $121.7 million in the same period of 2020.
−Removed: In second quarter 2021, we recorded an additional gain on the sale of our North Louisiana assets of $2.4 million primarily related to final closing adjustments.
−Removed: In first quarter 2021, we recorded an additional loss on the sale of our North Louisiana assets of $1.9 million.
+Added: Loss (gain) on the sale of assets was a gain of $724,000 in first nine months 2021 compared to a gain of $112.4 million in the same period of 2020.
+Added: In first six months 2021, we recorded an additional gain on the sale of our North Louisiana assets of $479,000.
+Added: In third quarter 2020, we sold our North Louisiana assets and recorded a pretax loss of $8.1 million on this sale, after closing adjustments.
In first quarter 2020, we received approval from state governmental authorities for a change in operatorship for our shallow Northwest Pennsylvania properties and we recorded a gain on the sale of these legacy assets of $122.5 million.
We did retain the deeper Utica rights on this acreage as part of this transaction.
−Removed: Income tax (benefit) expense was a benefit of $1.3 million in second quarter 2021 compared to a benefit $22.3 million in second quarter 2020.
−Removed: Income tax expense was $1.4 million in first six months 2021 compared to $6.7 million in first six months 2020.
+Added: Income tax benefit was $29.7 million in third quarter 2021 compared to $36.5 million in third quarter 2020.
+Added: Income tax benefit was $28.3 million in first nine months 2021 compared to $29.8 million in first nine months 2020.
The 2021 and 2020 effective tax rates were different than the statutory tax rate due to state income taxes, equity compensation, valuation allowances and other discrete tax items.
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Production receipts, however, often lag payments to the counterparties.
−Removed: As of June 30, 2021, we have entered into derivative agreements covering 244.6 Bcfe for the remainder of 2021 and 168.0 Bcfe for 2022, not including our basis swaps.
−Removed: The following table presents sources and uses of cash and cash equivalents for the six months ended June 30, 2021 and 2020 (in thousands):
−Removed: Six Months Ended
+Added: As of September 30, 2021, we have entered into derivative agreements covering 120.8 Bcfe for the remainder of 2021, 331.8 Bcfe for 2022 and 22.4 Bcfe for 2023, not including our basis swaps.
+Added: The following table presents sources and uses of cash and cash equivalents for the nine months ended September 30, 2021 and 2020 (in thousands):
+Added: Nine Months Ended
+Added: September 30,
Sources of cash and cash equivalents
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Sources of Cash and Cash Equivalents
−Removed: Cash flows provided from operating activities in first six months 2021 was $283.4 million compared to $203.3 million in first six months 2020.
+Added: Cash flows provided from operating activities in first nine months 2021 was $475.3 million compared to $179.0 million in first nine months 2020.
Cash provided from operating activities is largely dependent upon commodity prices and production volumes, net of the effects of settlement of our derivative contracts.
−Removed: The increase in cash provided from operating activities from first six months 2020 to first six months 2021 reflects higher realized prices and lower operating expenses partially offset by working capital cash outflow and lower production volumes.
−Removed: As of June 30, 2021, we have hedged more than 65% of our projected total production for the remainder of 2021, with more than 75% of our projected natural gas production hedged.
+Added: The increase in cash provided from operating activities from first nine months 2020 to first nine months 2021 reflects higher realized prices and lower operating expenses partially offset by working capital cash outflow and lower production volumes.
+Added: As of September 30, 2021, we have hedged more than 65% of our projected total production for the remainder of 2021, with more than 75% of our projected natural gas production hedged.
Net cash provided from operating activities was affected by a 8% decrease in production and working capital changes or the timing of cash receipts and disbursements.
−Removed: Changes in working capital (as reflected in our consolidated statements of cash flows) for first six months 2021 were negative $73.7 million compared to a positive $26.1 million for first quarter 2020.
+Added: Changes in working capital (as reflected in our consolidated statements of cash flows) for first nine months 2021 were negative $143.6 million compared to a negative $47.8 million for first nine months 2020.
Uses of Cash and Cash Equivalents
−Removed: Additions to natural gas and oil properties for first six months 2021 were consistent with expectations relative to our $425.0 million 2021 capital budget.
−Removed: Repayment of senior and senior subordinated notes for first six months 2021 includes the redemption of various senior and senior subordinated notes due 2021, 2022 and 2023.
−Removed: The first six months 2020 includes purchases in the open market of $48.5 million of our 5.00% senior subordinated notes due 2022, $5.8 million principal amount of our 5.875% senior notes due 2022 and $56.6 million principal amount of our 5.00% senior notes due 2023.
−Removed: In addition, in conjunction with the issuance of our $550.0 million aggregate principal amount 9.25% senior notes due 2026, we used the proceeds from this issuance to redeem $324.1 million of our 5.75% senior notes due 2021 and $175.9 million of our 5.875% senior notes due 2022.
+Added: Additions to natural gas and oil properties for first nine months 2021 were consistent with expectations relative to our 2021 capital budget.
+Added: Repayment of senior and senior subordinated notes for first nine months 2021 includes the redemption of various senior and senior subordinated notes due 2021, 2022 and 2023.
+Added: The first nine months 2020 includes purchases in the open market various senior and senior subordinated notes due 2021, 2022 and 2023.
+Added: In addition, in conjunction with the issuance of our $850.0 million aggregate principal amount 9.25% senior notes due 2026, we used the proceeds from this issuance and the sale of our North Louisiana assets to redeem $336.2 million of our 5.75% senior notes due 2021 and $241.0 million of our 5.875% senior notes due 2022, $291.0 million of our 5.00% senior notes due 2022, $122.3 million of our 5.0% senior notes due 2023, $1.2 million of our 5.75% senior subordinated notes due 2021 and $8.3 million of our 5.00% senior subordinated notes due 2022.
From time to time, we may continue to repurchase our senior notes based upon prevailing market or other conditions at the time.
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We continue to take steps to ensure we have adequate capital resources and liquidity to fund our capital expenditure program.
−Removed: In second quarter 2021, we entered into additional commodity derivative contracts for 2021 through 2024 to protect future cash flows.
−Removed: During first six months 2021, our net cash provided from operating activities of $283.4 million and borrowings under our bank credit facility were used to fund approximately $222.5 million of capital expenditures (including acreage acquisitions).
−Removed: At June 30, 2021, we had $464,000 in cash and total assets of $6.2 billion.
−Removed: Long-term debt at June 30, 2021 totaled $3.0 billion, including $121.0 million outstanding on our bank credit facility and $2.9 billion of senior and senior subordinated notes.
−Removed: Our available committed borrowing capacity at June 30, 2021 was $1.9 billion under current bank commitments.
+Added: In third quarter 2021, we entered into additional commodity derivative contracts for 2021 through 2023 to protect future cash flows.
+Added: During first nine months 2021, our net cash provided from operating activities of $475.3 million was used to fund approximately $332.7 million of capital expenditures (including acreage acquisitions).
+Added: At September 30, 2021, we had $478,000 in cash and total assets of $6.3 billion.
+Added: Total debt at September 30, 2021 totaled $2.9 billion, including $30.0 million outstanding on our bank credit facility and $2.9 billion of senior notes (before deducting debt issuance costs).
+Added: Our available committed borrowing capacity at September 30, 2021 was $2.0 billion under current bank commitments.
Cash is required to fund capital expenditures necessary to offset inherent declines in production and reserves that are typical in the oil and natural gas industry.
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Our 2021 capital budget was announced in early February at $425.0 million.
−Removed: Commodity prices have remained highly volatile and have increased during first six months 2021 compared to fourth quarter 2020.
+Added: Commodity prices have remained highly volatile but have increased during first nine months 2021 compared to fourth quarter 2020.
Our revenues, earnings, liquidity and ability to grow are substantially dependent on the prices we receive for and our ability to develop our reserves of natural gas, NGLs and oil.
We have adjusted and must continue to adjust our business through efficiencies and margin enhancements.
−Removed: We plan to continue to work towards improved profitability and debt metrics.
−Removed: We would expect to monitor the market and look for opportunities to refinance or reduce debt based on market conditions.
−Removed: We believe we are well-positioned to manage the challenges presented in a low commodity price environment and that we can endure continued volatility in current and future commodity prices by:
+Added: We plan to continue to work towards improved profitability and balance sheet strength.
+Added: We will continue to monitor the market and look for opportunities to refinance or reduce debt based on market conditions.
+Added: We believe we are well-positioned to manage any challenges during a low commodity price environment and that we can endure continued volatility in current and future commodity prices by:
exercising discipline in our capital program with the expectation of funding our capital expenditures with operating cash flow and, if required, with borrowings under our bank credit facility;
1 unchanged sentence
continuing to focus on improving our cost structure;
−Removed: continuing to pursue asset sales to reduce debt;
continuing to manage price risk by hedging our production volumes;
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Credit Arrangements
−Removed: As of June 30, 2021, we maintained a revolving credit facility with a borrowing base of $3.0 billion and aggregate lender commitments of $2.4 billion, which we refer to as our bank credit facility or bank debt.
+Added: As of September 30, 2021, we maintained a revolving credit facility with a borrowing base of $3.0 billion and aggregate lender commitments of $2.4 billion, which we refer to as our bank credit facility or bank debt.
The bank credit facility is secured by substantially all of our assets and has a maturity date of April 13, 2023.
Availability under the bank credit facility is subject to a borrowing base set by the lenders.
−Removed: As of June 30, 2021, the outstanding balance under our bank credit facility was $121.0 million.
−Removed: Additionally, we had $334.6 million of undrawn letters of credit leaving $1.9 billion of committed borrowing capacity available under the bank credit facility at the end of second quarter 2021.
+Added: As of September 30, 2021, the outstanding balance under our bank credit facility was $30.0 million.
+Added: Additionally, we had $334.6 million of undrawn letters of credit leaving $2.0 billion of committed borrowing capacity available under the bank credit facility at the end of third quarter 2021.
Our bank credit facility imposes limitations on the payment of dividends and other restricted payments (as defined under our bank credit facility).
The bank credit facility also contains customary covenants relating to debt incurrence, liens, investments and financial ratios.
−Removed: We were in compliance with all covenants at June 30, 2021.
+Added: We were in compliance with all covenants at September 30, 2021.
See Note 9 to our unaudited consolidated financial statements for additional information regarding our bank debt.
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Our contractual obligations include long-term debt, operating leases, derivative obligations, asset retirement obligations and transportation, processing and gathering commitments including the divestiture contractual commitment.
−Removed: June 30, 2021, we do not have any significant off-balance sheet debt or other such unrecorded obligations and we have not guaranteed any debt of any unrelated party.
−Removed: As of June 30, 2021, we had a total of $334.6 million of undrawn letters of credit under our bank credit facility.
+Added: As of September 30, 2021, we do not have any significant off-balance sheet debt or other such unrecorded obligations and we have not guaranteed any debt of any unrelated party.
+Added: As of September 30, 2021, we had a total of $334.6 million of undrawn letters of credit under our bank credit facility.
Since December 31, 2020, there have been no material changes to our contractual obligations other than the changes to our indebtedness as discussed further in Note 9 and a reduction in our divestiture contract obligation as discussed in Note 14.
Interest Rates
−Removed: At June 30, 2021, we had approximately $3.0 billion of debt outstanding.
+Added: At September 30, 2021, we had approximately $2.9 billion of debt outstanding.
Of this amount, $2.9 billion bore interest at fixed rates averaging 6.9%.
−Removed: Bank debt totaling $121.0 million bears interest at a floating rate, which was 2.2% at June 30, 2021.
−Removed: The 30-day LIBOR Rate on June 30, 2021 was approximately 0.1%.
−Removed: A 1% increase in short-term interest rates on the floating-rate debt outstanding on June 30, 2021 would result in approximately $1.2 million in additional annual interest expense.
+Added: Bank debt totaling $30.0 million bears interest at a floating rate, which was 2.4% at September 30, 2021.
+Added: The 30-day LIBOR Rate on September 30, 2021 was approximately 0.1%.
+Added: A 1% increase in short-term interest rates on the floating-rate debt outstanding on September 30, 2021 would result in approximately $300,000 in additional annual interest expense.
Off-Balance Sheet Arrangements
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Changes in natural gas prices affect us more than changes in oil prices because approximately 65% of our December 31, 2020 proved reserves are natural gas and 2% of proved reserves are oil and condensate.
−Removed: In addition, a portion of our NGLs, which are 33% of proved reserves, are also
−Removed: impacted by changes in oil prices.
+Added: In addition, a portion of our NGLs, which are 33% of proved reserves, are also impacted by changes in oil prices.
We are also exposed to market risks related to changes in interest rates.
−Removed: These risks did not change materially from December 31, 2020 to June 30, 2021.
+Added: These risks did not change materially from December 31, 2020 to September 30, 2021.
Commodity Price Risk
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Our program may also include a three-way collar which is a combination of three options.
−Removed: At June 30, 2021, our derivative program includes swaps, collars, three-way collars and swaptions.
−Removed: The fair value of these contracts, represented by the estimated amount that would be realized upon immediate liquidation based on a comparison of the contract price and a reference price, generally NYMEX for natural gas and crude oil or Mont Belvieu for NGLs, as of June 30, 2021, approximated a net unrealized pretax loss of $287.7 million.
+Added: At September 30, 2021, our derivative program includes swaps, calls, collars, three-way collars and swaptions.
+Added: The fair value of these contracts, represented by the estimated amount that would be realized upon immediate liquidation based on a comparison of the contract price and a reference price, generally NYMEX for natural gas and crude oil or Mont Belvieu for NGLs, as of September 30, 2021, approximated a net unrealized pretax loss of
+Added: $776.1 million.
These contracts expire monthly through December 2023.
−Removed: At June 30, 2021, the following commodity derivative contracts were outstanding, excluding our basis swaps which are discussed below:
+Added: At September 30, 2021, the following commodity derivative contracts were outstanding, excluding our basis swaps which are discussed below:
Contract Type
12 unchanged sentences
251,781 Mmbtu/day
−Removed: Crude Oil (1)
+Added: January - March 2022
+Added: 80,000 Mmbtu/day
+Added: 60,000 Mmbtu/day
7,500 bbls/day
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6,000 bbls/day
−Removed: July –
−Removed: September 2021
4,000 bbls/day
5 unchanged sentences
3,000 bbls/day
+Added: January - March 2022
2,656 bbls/day
+Added: January - March 2022
2,000 bbls/day
−Removed: (1) We also sold natural gas call swaptions of 180,000 Mmbtu/day for 2022 at a weighted average price of $2.86.
−Removed: The fair market value of these swaptions at June 30, 2021 was a net derivative liability of $22.1 million.
−Removed: In addition, we sold oil call swaptions of 1,000 bbls per day for 2022 at a weighted average price of $54.00 which has a fair value of a loss of $4.3 million at June 30, 2021.
+Added: We also sold natural gas call swaptions of 80,000 Mmbtu/day for 2022 at a weighted average price of $2.80 and 70,000 Mmbtu/day for 2023 at a weighted average price of $3.04.
+Added: The fair market value of these swaptions at September 30, 2021 was a net derivative liability of $60.1 million.
We believe NGLs prices are somewhat seasonal, particularly for propane.
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If commodity price changes in one region are not reflected in other regions, derivative commodity instruments may no longer provide the expected hedge, resulting in increased basis risk.
−Removed: Therefore, in addition to the swaps, collars, three-way collars and swaptions discussed above, we have entered into natural gas basis swap agreements.
+Added: Therefore, in addition to the swaps, calls, collars, three-way collars and swaptions discussed above, we have entered into natural gas basis swap agreements.
The price we receive for our gas production can be more or less than the NYMEX Henry Hub price because of basis adjustments, relative quality and other factors.
Basis swap agreements effectively fix the basis adjustments.
−Removed: The fair value of the natural gas basis swaps was a gain of $25.7 million June 30, 2021 and they settle monthly through December 2024.
−Removed: At June 30, 2021, we also had propane spread swap contracts which lock in the differential between Mont Belvieu and international propane indices.
+Added: The fair value of the natural gas basis swaps was a gain of $8.5 million September 30, 2021 and they settle monthly through December 2024.
+Added: At September 30, 2021, we also had propane spread swap contracts which lock in the differential between Mont Belvieu and international propane indices.
These contracts settle monthly through 2021.
−Removed: The fair value of these contracts was a gain of $376,000 at June 30, 2021.
−Removed: At June 30, 2021, we are entitled to receive contingent consideration associated with the sale of our North Louisiana assets, annually through 2023, of up to $75.0 million based on future achievement of certain natural gas and oil prices based on published indexes along with the realized NGLs prices of the buyer.
−Removed: The fair value at June 30, 2021 was a gain of $37.4 million.
−Removed: The following table shows the fair value of our derivatives and the hypothetical changes in fair value that would result from a 10% and a 25% change in commodity prices at June 30, 2021.
+Added: The fair value of these contracts was a gain of $394,000 at September 30, 2021.
+Added: At September 30, 2021, we are entitled to receive contingent consideration associated with the sale of our North Louisiana assets, annually through 2023, of up to $75.0 million based on future achievement of certain natural gas and oil prices based on published indexes along with the realized NGLs prices of the buyer.
+Added: The fair value at September 30, 2021 was a gain of $50.2 million.
+Added: The following table shows the fair value of our derivatives and the hypothetical changes in fair value that would result from a 10% and a 25% change in commodity prices at September 30, 2021.
We remain at risk for possible changes in the market value of commodity derivative instruments;
10 unchanged sentences
Our derivative contracts are with multiple counterparties to minimize our exposure to any individual counterparty.
−Removed: At June 30, 2021, our derivative counterparties include nineteen financial institutions, of which all but five are secured lenders in our bank credit facility.
+Added: At September 30, 2021, our derivative counterparties include nineteen financial institutions, of which all but five are secured lenders in our bank credit facility.
Counterparty credit risk is considered when determining the fair value of our derivative contracts.
6 unchanged sentences
This is accomplished through a mix of fixed rate senior and senior subordinated debt and variable rate bank debt.
−Removed: At June 30, 2021, we had $3.0 billion of debt outstanding.
+Added: At September 30, 2021, we had $2.9 billion of debt outstanding.
Of this amount, $2.9 billion bears interest at fixed rates averaging 6.9%.
−Removed: Bank debt totaling $121.0 million bears interest at floating rates, which was 2.2% on June 30, 2021.
−Removed: On June 30, 2021, the 30-day LIBOR Rate was approximately 0.1%.
−Removed: A 1% increase in short-term interest rates on the floating-rate debt outstanding on June 30, 2021 would result in approximately $1.2 million in additional annual interest expense.
−Removed: CONTROLS AND PROCEDURES
+Added: Bank debt totaling $30.0 million bears interest at floating rates, which was 2.4% on September 30, 2021.
+Added: On September 30, 2021, the 30-day LIBOR Rate was approximately 0.1%.
+Added: A 1% increase in short-term interest rates on the floating-rate debt outstanding on September 30, 2021 would result in approximately $300,000 in additional annual interest expense.
+Added: CONTROLS A ND PROCEDURES
Evaluation of Disclosure Controls and Procedures
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Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.
−Removed: Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2021 at the reasonable assurance level.
+Added: Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2021 at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
−Removed: There was no change in our system of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) under the Exchange Act) during the three months ended June 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
+Added: There was no change in our system of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) under the Exchange Act) during the three months ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
P ART II –
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.