What changed in this filing

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Item 1. Financial Statements

2022-07-25 compared with 2022-04-26 · 371 added, 268 removed, 1018 unchanged (39% of the section changed)

16 unchanged sentences

Operating lease right-of-use assets

Deferred tax assets

Current liabilities:

18 unchanged sentences

Common stock, $ 0.01 par, 475,000,000 shares authorized, 262,886,113 issued at

March 31, 2022 and 259,795,554 issued at December 31, 2021

Common stock held in treasury, 10,601,535 shares at March 31, 2022 and 10,002,646

June 30, 2022 and 259,795,554 issued at December 31, 2021

Common stock held in treasury, 14,601,535 shares at June 30, 2022 and 10,002,646

shares at December 31, 2021

8 unchanged sentences

(Unaudited, in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Revenues and other income:

14 unchanged sentences

Depletion, depreciation and amortization

(Gain) loss on the sale of assets

Gain on the sale of assets

Total costs and expenses

(Loss) income before income taxes

Income (loss) before income taxes

Income tax expense (benefit):

Net (loss) income

Net (loss) income per common share:

Net income (loss)

Net income (loss) per common share:

Weighted average common shares outstanding:

1 unchanged sentence

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF COMP REHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMP REHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

Three Months Ended March 31,

Net (loss) income

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss)

Other comprehensive income:

2 unchanged sentences

Income tax expense

Total comprehensive (loss) income

Total comprehensive income (loss)

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided from operating activities:

Adjustments to reconcile net loss to net cash provided from operating activities:

Deferred income tax (benefit) expense

6 unchanged sentences

Deferred and stock-based compensation

(Gain) loss on the sale of assets

Gain on the sale of assets

Loss on early extinguishment of debt

24 unchanged sentences

Proceeds from the sales of common stock held by the deferred compensation

Net cash (used in) provided from financing activities

Decrease in cash and cash equivalents

Net cash used in financing activities

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

14 unchanged sentences

Balance as of March 31, 2022

Issuance of common stock

Stock-based compensation

Treasury stock

Other comprehensive income

Balance as of June 30, 2022

The accompanying notes are an integral part of these consolidated financial statements.

12 unchanged sentences

Balance as of March 31, 2021

Issuance of common stock

upon vesting of PSUs

Stock-based compensation

Treasury stock

Other comprehensive income

Balance as of June 30, 2021

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 2021 Annual Report on Form 10-K filed with the SEC on February 22, 2022.

The results of operations for three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the second quarter and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year.

(3) NEW ACCOUNTING STANDARDS

Not Yet Adopted

No accounting standards were adopted in first quarter 2022 that had a material impact on our consolidated financial statements.

No accounting standards were adopted in second quarter or six months ended June 30, 2022 that had a material impact on our consolidated financial statements.

(4) REVENUES FROM CONTRACTS WITH CUSTOMERS

3 unchanged sentences

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.

Accounts receivable attributable to our revenue contracts with customers was $ 416.2 million at March 31, 2022 and $ 460.2 million at December 31, 2021.

Accounts receivable attributable to our revenue contracts with customers was $ 601.7 million at June 30, 2022 and $ 460.2 million at December 31, 2021.

Revenue attributable to each of our identified revenue streams is disaggregated below (in thousands):

Three Months Ended

Six Months Ended

Natural gas sales

3 unchanged sentences

Other marketing revenue (1)

(1) The three months ended March 31, 2021 includes $ 8.8 million received as part of a capacity release agreement.

(1) The six months ended June 30, 2021 includes $ 8.8 million received as part of a capacity release agreement.

(5) INCOME TAXES

3 unchanged sentences

Income taxes for discrete items are computed and recorded in the period that a specific transaction occurs.

For the three months ended

March 31, 2022 and 2021, 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.

For the three months and six months ended June 30, 2022 and 2021, 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.

Current income taxes reflect estimated state income taxes due for 2022 which is based on our estimated earnings, taking into account state tax rates and laws regarding NOL limitations.

We continue to evaluate the realizability of federal and state deferred tax assets and based upon significant increases in commodity prices and other positive evidence, we released a portion of our federal and state valuation allowances in first six months 2022.

On July 12, 2022, the commonwealth of Pennsylvania enacted legislation to reduce the corporate income tax rate over a series of years.

We are currently evaluating the impact of this new corporate income tax rate.

(6) INCOME (LOSS) PER COMMON SHARE

3 unchanged sentences

Three Months Ended

Net (loss) income, as reported

Six Months Ended

Net income (loss), as reported

Participating earnings (a)

Basic net (loss) income attributed to common

Basic net income (loss) attributed to common

Reallocation of participating earnings (a)

Diluted net (loss) income attributed to common

Net (loss) income per common share:

Diluted net income (loss) attributed to common

Net income (loss) per common share:

Restricted Stock Awards represent participating securities because they participate in nonforfeitable dividends or distributions with common equity owners.

3 unchanged sentences

Three Months Ended

Six Months Ended

Weighted average common shares outstanding –

3 unchanged sentences

Weighted average common shares outstanding –

Weighted average common shares outstanding-basic for first quarter 2022 excludes 6.2 million shares of restricted stock held in our deferred compensation plan compared to 6.2 million shares in first quarter 2021 (although all awards are issued and outstanding upon grant).

Due to our loss in first quarter 2022, we excluded all outstanding equity grants from the computation of diluted loss per share because the effect would have been anti-dilutive to the computations.

For first quarter 2021, equity grants of 88,000 were outstanding but not included in the computation of diluted net income per share because the grant prices were greater than the average market price of our common shares and would be anti-dilutive to the computation.

Non-vested restricted stock and performance based equity awards are included in the computation using the treasury stock method with the deemed proceeds equal to the average unrecognized compensation during the period.

Weighted average common shares outstanding-basic for second quarter 2022 excludes 6.7 million shares of restricted stock held in our deferred compensation plan compared to 7.1 million shares in second quarter 2021 (although all awards are issued and outstanding upon grant).

Weighted average common shares outstanding-basic for first six months 2022 excludes 6.4 million shares of restricted stock compared to 6.6 million for first six months 2021.

For the three months ended June 30, 2022, equity grants of 2,000 shares were outstanding but not included in the computation of diluted net income because the grant prices were greater than the average market price of the common shares and would be anti-dilutive to the computations.

Due to our net loss for second quarter 2021 and in both the first six months 2022 and 2021, we excluded all equity grants from the computation of net loss per share because the effect would have been anti-dilutive to the computations.

(7) Capitalized Costs and Accumulated Depreciation, Depletion and Amortization (a)

8 unchanged sentences

We had the following debt outstanding as of the dates shown below.

No interest was capitalized during the three months ended March 31, 2022 or the year ended December 31, 2021 (in thousands).

No interest was capitalized during the three or six months ended June 30, 2022 or the year ended December 31, 2021 (in thousands).

Senior notes:

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The bank credit facility also provides for a borrowing base subject to periodic redeterminations and for event-driven unscheduled redeterminations.

As of March 31, 2022, our bank group was composed of twenty-six financial institutions.

As of June 30, 2022, our bank group was composed of seventeen financial institutions.

The borrowing base may be increased or decreased based on our request and sufficient proved reserves, as determined by the bank group.

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 0.75 % to 1.75 % or at the LIBOR Rate (as defined in the bank credit facility agreement) plus a spread ranging from 1.75 % to 2.75 %.

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 0.75 % to 1.75 % or at the secured overnight financing rate (SOFR, as defined in the bank credit facility agreement) plus a spread ranging from 1.75 % to 2.75 %.

The applicable spread is dependent upon borrowings relative to the borrowing base.

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.

The weighted average interest rate was 2.5 % for first quarter 2022 compared to 2.2 % for first quarter 2021.

We may elect, from time to time, to convert all or any part of our SOFR loans to base rate loans or to convert all or any of the base rate loans to SOFR loans.

The weighted average interest rate was 4.1 % for second quarter 2022 compared to 2.0 % for second quarter 2021.

The weighted average interest rate was 3.4 % for first six months 2022 compared to 2.1 % for first six months 2021.

A commitment fee is paid on the undrawn balance based on an annual rate of 0.30 % to 0.375 %.

At March 31, 2022, 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.

On March 31, 2022, bank commitments totaled $ 2.4 billion and we had no borrowings outstanding on our bank credit facility.

At June 30, 2022, the commitment fee was 0.37 % and the interest rate margin was 1.75 % on our SOFR loans and 0.75 % on our ABR loans.

On June 30, 2022, bank commitments totaled $ 1.5 billion and we had $ 1.0 million outstanding on our bank credit facility.

Additionally, we had $ 330.5 million of undrawn letters of credit, leaving $ 1.2 billion of committed borrowing capacity available under the facility.

On April 14, 2022, we entered into an amended and restated revolving bank facility with JPMorgan Chase Bank, N.A.

as Administrative Agent and other lenders and agents party thereto.

The new facility has a maximum facility amount of $ 4.0 billion and a current elected borrowing base of $ 3.0 billion.

On April 14, 2022, the bank commitments totaled $ 1.5 billion.

The maturity of the new bank credit facility is April 14, 2027 .

The financial covenants include a maximum consolidated debt to EBITDAX ratio of 3.75 x and a minimum current ratio of 1.0 x (each ratio as defined in the bank credit facility).

Revisions were also made to replace LIBOR as a benchmark interest rate with SOFR or the secured overnight financing rate.

Our bank group is now composed of seventeen financial institutions.

New Senior Notes

14 unchanged sentences

If we experience a change of control, noteholders may require us to repurchase all or a portion of our senior notes at 101 % of the aggregate principal amount plus accrued and unpaid interest, if any.

Range is a holding company which owns no operating assets and has no significant operations independent of its subsidiaries.

During second quarter 2022, we retired our 5.00% senior notes due 2022 and our 5.875% senior notes due 2022.

Range is a holding company that owns no operating assets and has no significant operations independent of its subsidiaries.

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.

5 unchanged sentences

Our bank credit facility contains negative covenants that limit our ability, among other things, to pay cash dividends, incur additional indebtedness, sell assets, enter into certain hedging contracts, change the nature of our business or operations, merge, consolidate or make certain investments.

Through March 31, 2022, we were required to maintain a ratio of EBITDAX (as defined in the bank credit facility agreement) to cash interest expense of equal to or greater than 2.5 and a current ratio (as defined in the bank credit facility agreement) of no less than 1.0 .

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.

We were in compliance with applicable covenants under the bank credit facility at March 31, 2022.

We are required to maintain maximum consolidated debt to EBITDAX ratio (as defined in the bank credit facility agreement) of 3.75 x and a minimum current ratio of 1.0 x (as defined in the bank credit facility agreement).

We were in compliance with applicable covenants under the bank credit facility at June 30, 2022.

(9) ASSET RETIREMENT OBLIGATIONS

2 unchanged sentences

The inputs are calculated based on historical data as well as current estimated costs.

A reconciliation of our liability for plugging and abandonment costs for the three months ended March 31, 2022 and the year ended December 31, 2021 is as follows (in thousands):

A reconciliation of our liability for plugging and abandonment costs for the six months ended June 30, 2022 and the year ended December 31, 2021 is as follows (in thousands):

Beginning of period

10 unchanged sentences

We do not enter into these arrangements for speculative or trading purposes.

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.

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 $ 989.8 million at March 31, 2022.

These contracts expire monthly through December 2024.

The following table sets forth our commodity-based derivative volumes by year as of March 31, 2022, excluding our basis swaps and divestiture contingent consideration which are discussed separately below:

The following table sets forth our commodity-based derivative volumes by year as of June 30, 2022, excluding our basis swaps and divestiture contingent consideration which are discussed separately below:

Contract Type

13 unchanged sentences

5,123 bbls/day

January-September 2024

NGLs (C2-Ethane)

April-June 2022

1,000 bbls/day

NGLs (C3-Propane)

April-June 2022

3,989 bbls/day

NGLs (NC4-Butane)

April-June 2022

July-September 2022

2,000 bbls/day

6 unchanged sentences

Basis Swap Contracts

In addition to the swaps, collars and swaptions described above, at March 31, 2022, we had natural gas basis swap contracts which lock in the differential between NYMEX Henry Hub and certain of our physical pricing indices.

In addition to the swaps, collars and swaptions described above, at June 30, 2022, 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 216,442,000 Mmbtu.

The fair value of these contracts was a gain of $ 22.5 million at March 31, 2022.

The fair value of these contracts was a gain of $ 2.5 million at June 30, 2022.

Divestiture Contingent Consideration

2 unchanged sentences

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.

For first three months 2022, this fair value has increased $ 8.1 million for a fair value of $ 34.8 million as of March 31, 2022.

For first six months 2022, this fair value has increased $ 8.1 million for a fair value of $ 34.8 million as of June 30, 2022.

Derivative Assets and Liabilities

The combined fair value of derivatives included in the accompanying consolidated balance sheets as of March 31, 2022 and December 31, 2021 is summarized below.

The combined fair value of derivatives included in the accompanying consolidated balance sheets as of June 30, 2022 and December 31, 2021 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):

March 31, 2022

June 30, 2022

Offset in the

Balance Sheet

of Assets Presented

Net Amounts of

Presented in the

Balance Sheet

Derivative assets:

–collars

–three-way collars

–basis swaps

–collars

–C2 ethane swaps

–NC4 butane swaps

–C5 natural gasoline swaps

–C5 natural gasoline collars

Divestiture contingent consideration

March 31, 2022

June 30, 2022

(Liabilities)

12 unchanged sentences

–swaps

–collars

–C2 ethane swaps

–C3 propane swaps

–NC4 butane swaps

2 unchanged sentences

December 31, 2021

of Recognized

Offset in the

1 unchanged sentence

Net Amounts of

Assets Presented

in the Balance Sheet

Presented in the

Balance Sheet

Derivative assets:

11 unchanged sentences

Recognized (Liabilities)

Amounts Offset

in the Balance Sheet

Offset in the

Balance Sheet

Net Amounts of

17 unchanged sentences

Three Months Ended

Six Months Ended

Commodity swaps

36 unchanged sentences

The following tables present the fair value hierarchy for assets and liabilities measured at fair value, on a recurring basis (in thousands):

Fair Value Measurements at March 31, 2022 using:

Fair Value Measurements at June 30, 2022 using:

Quoted Prices

Identical Assets

Trading securities held in the deferred compensation

Trading securities held in the deferred

compensation plans

Commodity price derivatives

8 unchanged sentences

Identical Assets

Trading securities held in the deferred compensation

Trading securities held in the deferred

compensation plans

Commodity price derivatives

9 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.

As of March 31, 2022, 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.

As of June 30, 2022, 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.

If exercised, the swaption contract becomes a swap treated consistently with our fixed-price swaps.

In addition to our swaptions in Level 3 at March 31, 2022, we have NGLs collars.

In addition to our swaptions in Level 3 at June 30, 2022, 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.

At March 31, 2022, for our swaptions, we used a weighted average implied volatility of 36 % for natural gas.

At June 30, 2022, for our swaptions, we used a weighted average implied volatility of 44 % for natural gas.

We also utilized a range of implied volatilities from 48 % to 55 % for our NGLs collars with a weighted average implied volatility of 49 %.

4 unchanged sentences

Transfers out of Level 3

Balance at March 31, 2022

Balance at June 30, 2022

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.

For first quarter 2022, interest and dividends were $ 115,000 and the mark-to-market adjustment was a loss of $ 4.3 million compared to interest and dividends of $ 109,000 and a mark-to-market gain of $ 2.0 million in first quarter 2021.

For second quarter 2022, interest and dividends were $ 175,000 and the mark-to-market adjustment was a loss of $ 9.6 million compared to interest and dividends of $ 118,000 and a mark-to-market gain of $ 2.3 million in second quarter 2021.

For first six months 2022, interest and dividends were $ 291,000 and the mark-to-market adjustment was a loss of $ 14.0 million compared to interest and dividends of $ 227,000 and mark-to-market adjustment of a gain of $ 4.3 million in first six months 2021.

Fair Values –

The following presents the carrying amounts and the fair values of our financial instruments as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022

The following presents the carrying amounts and the fair values of our financial instruments as of June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022

December 31, 2021

22 unchanged sentences

Concentrations of Credit Risk

As of March 31, 2022, 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.

As of June 30, 2022, 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.

Our allowance for uncollectable receivables was $ 568,000 at both March 31, 2022 and December 31, 2021.

Our allowance for uncollectable receivables was $ 564,000 at June 30, 2022 and $ 568,000 at December 31, 2021.

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.

At March 31, 2022, our derivative counterparties include fifteen financial institutions, of which all but five are secured lenders in our bank credit facility.

At March 31, 2022, our net derivative liability includes a net receivable of $ 3.6 million from three of these counterparties that are not participants in our bank credit facility and an aggregate net payable of $ 1.6 million to two of these counterparties.

At June 30, 2022, our derivative counterparties include fifteen financial institutions, of which all but five are secured lenders in our bank credit facility.

At June 30, 2022, our net derivative liability includes a net receivable of $ 2.3 million from three of these counterparties that are not participants in our bank credit facility and an aggregate net payable of $ 4.9 million to two of these counterparties.

Allowance for Expected Credit Losses.

11 unchanged sentences

Three Months Ended

Six Months Ended

Direct operating expense

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The Compensation Committee also grants restricted stock to certain employees and non-employee directors of the Board of Directors as part of their compensation.

We also grant restricted stock to certain employees for retention purposes.

In addition, we also grant restricted stock to certain employees for retention purposes.

Compensation expense is recognized over the balance of the vesting period, which is typically three years for employee grants and one year vesting for non-employee directors.

In early 2021, vesting for new grants of restricted stock Liability Awards changed to a three-year cliff vesting from a ratable 30%- 30 %- 40 % vesting schedule.

All restricted stock awards are issued at prevailing market prices at the time of the grant and the vesting is based upon an employee’s continued employment with us.

1 unchanged sentence

Upon grant of these restricted shares, which we refer to as restricted stock Liability Awards, the majority of these shares are generally placed in our deferred compensation plan and, upon vesting, withdrawals are allowed in either cash or in stock.

In early 2021, vesting for new grants of restricted stock Liability Awards changed to a three-year cliff vesting from a ratable 30%- 30 %- 40 % vesting schedule.

These Liability Awards are classified as a liability and are remeasured at fair value each reporting period.

1 unchanged sentence

Historically, we have used authorized but unissued shares of stock when restricted stock is granted.

However, we can also utilize treasury shares when available.

However, we can also utilize treasury shares.

Stock-Based Performance Units .

3 unchanged sentences

For shares granted in 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.

In first quarter 2022, the performance conditions will be measured against internal metrics of net debt (total debt less cash on hand) and emission intensity performance.

For shares granted in first quarter 2022, the performance conditions will be measured against internal metrics of total net debt (total debt less cash on hand) and emission intensity performance.

Each unit granted represents one share of our common stock.

5 unchanged sentences

Equity Awards

In first three months 2022, we granted 1.4 million restricted stock Equity Awards to employees at an average grant date fair value of $ 18.47 which generally vest over a three-year period compared to 2.3 million at an average grant date fair value of $ 10.20 in first three months 2021.

We recorded compensation expense for these outstanding awards of $ 5.9 million in first three months 2022 compared to $ 5.2 million in the same period of 2021.

In first six months 2022, we granted 1.4 million restricted stock Equity Awards to employees at an average grant date fair value of $ 18.50 which generally vest over a three-year period compared to 2.3 million at an average grant date fair value of $ 10.20 in first six months 2021.

We recorded compensation expense for these outstanding awards of $ 10.9 million in first six months 2022 compared to $ 10.3 million in the same period of 2021.

Restricted stock Equity Awards are not issued to employees until such time as they are vested.

2 unchanged sentences

Liability Awards

In first three months 2022, we granted 602,000 shares of restricted stock Liability Awards as compensation to employees at an average grant date fair value of $ 20.42 which generally vest at the end of a three-year period.

In first three 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 $ 9.29 with vesting generally at the end of a three-year period.

We recorded compensation expense for these Liability Awards of $ 3.6 million in first three months 2022 compared to $ 2.9 million in first three months 2021.

In first six months 2022, we granted 602,000 shares of restricted stock Liability Awards as compensation to employees at an average grant date fair value of $ 20.43 which generally vest at the end of a three-year period and 47,000 shares were granted to non-employee directors at an average price of $ 27.52 with vesting at the end of one year.

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 with vesting generally 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 one year.

We recorded compensation expense for these Liability Awards of $ 6.9 million in first six months 2022 compared to $ 5.7 million in first six months 2021.

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).

The following is a summary of the status of our non-vested restricted stock outstanding at March 31, 2022:

The following is a summary of the status of our non-vested restricted stock outstanding at June 30, 2022:

Restricted Stock

7 unchanged sentences

Outstanding at December 31, 2021

Outstanding at March 31, 2022

Outstanding at June 30, 2022

Stock-Based Performance Units

3 unchanged sentences

If the performance metric for the applicable period is not met, that portion is considered forfeited and there is an adjustment to the expense recorded.

See additional information above for shares granted in first quarter 2021 and 2022.

The following is a summary of our non-vested internal performance awards outstanding at March 31, 2022:

See additional information above for shares granted in first six months 2021 and 2022.

The following is a summary of our non-vested internal performance awards outstanding at June 30, 2022:

Average Grant

3 unchanged sentences

Vested and issued (b)

Outstanding at March 31, 2022

Outstanding at June 30, 2022

Amounts granted reflect the number of performance units granted;

2 unchanged sentences

For the awards issued during 2019, the aggregate payout was approximately 116 % of target with a positive performance adjustment of 158,793 shares.

We recorded compensation expense of $ 1.7 million in first three months 2022 compared to expense of $ 740,000 in first three months 2021.

We recorded compensation expense for these awards of $ 3.5 million in first six months 2022 compared to expense of $ 1.8 million in first six months 2021.

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.

3 unchanged sentences

The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the life of the grant.

The following assumptions were used to estimate the fair value of TSR-PSUs granted during first three months 2022 and 2021:

Three Months Ended

The following assumptions were used to estimate the fair value of TSR-PSUs granted during first six months 2022 and 2021:

Six Months Ended

Risk-free interest rate

7 unchanged sentences

Vested and issued (b)

Outstanding at March 31, 2022

Outstanding at June 30, 2022

These amounts reflect the number of performance units granted.

1 unchanged sentence

Includes TSR-PSUs awards granted in 2019 where the return on our common stock was 127 % and therefore, the performance multiple and actual payout was 183 %.

We recorded TSR-PSUs compensation expense of $ 773,000 in first three months 2022 compared to $ 595,000 in the same period of 2021.

We recorded TSR-PSUs compensation expense of $ 1.5 million in first six months 2022 compared to $ 1.2 million in the same period of 2021.

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.

There was approximately $ 70,000 of estimated prior service costs amortized from accumulated other comprehensive income into general and administrative expense in first quarter 2022 compared to approximately $ 90,000 in first quarter 2021.

There was approximately $ 70,000 of estimated prior service costs amortized from accumulated other comprehensive income into general and administrative expense in second quarter 2022 compared to approximately $ 90,000 in second quarter 2021.

There was approximately $ 145,000 of estimated prior service costs amortized from accumulated other comprehensive income into general and administrative expense in first six months 2022 compared to approximately $ 185,000 in the same period of 2021.

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.

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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.

We recorded a mark-to-market loss of $ 73.3 million in first quarter 2022 compared to a mark-to-market loss of $ 19.8 million in first quarter 2021.

The Rabbi Trust held 6.7 million shares ( 5.6 million of which were vested) of Range stock at March 31, 2022 compared to 6.2 million shares ( 5.4 million of which were vested) at December 31, 2021.

We recorded a mark-to-market gain of $ 19.2 million in second quarter 2022 compared to a mark-to-market loss of $ 35.5 million in second quarter 2021.

We recorded mark-to-market loss of $ 54.1 million in first six months 2022 compared to mark-to-market loss of $ 55.3 million in first six months 2021.

The Rabbi Trust held 5.7 million shares ( 4.8 million of which were vested) of Range stock at June 30, 2022 compared to 6.2 million shares ( 5.4 million of which were vested) at December 31, 2021.

(13) EXIT AND TERMINATION COSTS

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The estimated obligations are included in current and long-term divestiture contract obligation in our consolidated balance sheets.

In first three months 2022, we recorded accretion expense of $ 11.0 million compared to $ 13.0 million in the same period of the prior year.

The estimated discounted divestiture contract obligation was $ 398.9 million at March 31, 2022.

In first six months 2022, we recorded accretion expense of $ 22.1 million compared to $ 25.0 million in the same period of the prior year.

In second quarter 2022, we recorded a net adjustment of $ 24.8 million to increase this obligation for a change in our forecasted drilling plans of the buyer along with adjusting the difference between estimated and actual payments.

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 along with a change in our forecasted drilling plans of the buyer.

The estimated discounted divestiture contract obligation was $ 414.2 million at June 30, 2022.

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.

The estimated remaining discounted obligation for these transportation capacity releases as of March 31, 2022 was $ 6.8 million.

The estimated remaining discounted obligation for these transportation capacity releases as of June 30, 2022 was $ 6.2 million.

Termination Costs

The following summarizes our exit and termination costs for the three months ended March 31, 2022 and 2021 (in thousands):

The following summarizes our exit and termination costs for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

Severance costs

Transportation contract capacity releases

(accretion of discount)

Divestiture contract obligation (accretion of

The following details the accrued exit and termination cost liability activity for the three months ended March 31, 2022 (in thousands):

(including accretion of discount)

Divestiture contract obligation (including accretion

The following details the accrued exit and termination cost liability activity for the six months ended June 30, 2022 (in thousands):

Balance at December 31, 2021

Accretion of discount

Balance at March 31, 2022

Changes in estimate

Balance at June 30, 2022

Includes the divestiture contract obligation and the transportation contract capacity release obligation.

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In 2019, the board of directors approved a stock purchase program to acquire up to $ 100.0 million of our outstanding stock.

In early 2022, board authorized an additional repurchase of up to $ 430.0 million of our outstanding common stock for an aggregate available amount at that time of $ 500.0 million.

In early 2022, our board authorized an additional repurchase of up to $ 430.0 million of our outstanding common stock for an aggregate available amount at that time of $ 500.0 million.

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.

In first quarter 2022, we repurchased 600,000 shares at an aggregate cost of $ 16.2 million.

The following is a schedule of the change in treasury shares for the three months ended March 31, 2022:

In first six months 2022, we repurchased 5,100,000 shares at an aggregate cost of $ 146.0 million, including repurchases of $ 13.1 million ( 500,000 shares) that were purchased in June 2022 and settled in July 2022.

The following is a schedule of the change in treasury shares for the three and six months ended June 30, 2022:

Beginning balance

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(15) SUPPLEMENTAL CASH FLOW INFORMATION

Three Months Ended

Six Months Ended

(in thousands)

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We have incurred and will continue to incur capital, operating and remediation expenditures as a result of environmental laws and regulations.

As of March 31, 2022, liabilities for remediation were not material.

We are not aware of any environmental claims existing as of March 31, 2022 that have not been provided for or would otherwise have a material impact on our financial position or results of operations.

As of June 30, 2022, liabilities for remediation were not material.

We are not aware of any environmental claims existing as of June 30, 2022 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.

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Range Resources Corporation et al.) in which the plaintiff sought to represent a class of Range stockholders who purchased or acquired stock from April 29, 2016 to February 10, 2021.

This lawsuit had been transferred to the U.S.

District Court for the Northern District of Texas (Fort Worth Division) and claimed that Range misclassified certain wells as inactive rather than having plugged the wells and that such alleged misclassification affected the determination of our asset retirement obligation accrual.

On March 31, 2022, the court granted our motion to dismiss and each claim was dismissed with prejudice.

Plaintiffs have until May 2 to file an appeal of the March 31 ruling and dismissal.

This lawsuit was transferred to the U.S.

obligation accrual.

On March 31, 2022, the court granted our motion to dismiss and each claim was dismissed with prejudice and no further appeal was filed.

Additionally, on January 20, 2022, a derivative action styled as Lewis v.

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was filed under seal in the Northern District of Texas (Case No.

4-22CV-051-0) asserting similar allegations as the Jacobowitz matter.

We maintain the same views as to the merits of the Lewis matter as the Jacobowitz matter and we plan to vigorously defend this matter and seek its dismissal.

4-22CV-051-0) asserting similar allegations as those alleged in the Jacobowitz matter.

On May 13, 2022, a notice of voluntary dismissal of that lawsuit was filed with the court by the plaintiff.

Transportation, Gathering and Processing Contracts

During second quarter 2022, we entered into an extension of certain long-term gathering agreements that is contingent on the completion of certain construction by the gathering company which is expected to be completed in 2024.

Our commitments would increase by a total of approximately $ 800.0 million upon completion of the construction.

(17) Costs Incurred for Property Acquisition, Exploration and Development (a)

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target capital spending at or below operating cash flow;

reduce emissions and target net-zero Scope 1 and Scope 2 greenhouse gas emissions by year-end 2025;

achieve competitive returns on investments;

reduce emissions and target net-zero Scope 1 and Scope 2 greenhouse gas emissions by year-end 2025;

manage liquidity and further improve financial strength;

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Prices for natural gas, NGLs and oil that we produce significantly impact our revenues and cash flows.

Natural gas, NGLs and oil benchmarks increased in first quarter 2022 when compared to the same period of 2021 and, as a result, we experienced a significant increase in price realizations.

Natural gas, NGLs and oil benchmarks increased in second quarter 2022 when compared to the same period of 2021 and also increased in first six months 2022 when compared to the same period of 2021.

As a result, we experienced a significant increase in price realizations.

As we continue to monitor the impact of the actions of OPEC and other large producing nations, the Russia-Ukraine conflict, global inventories of oil and gas and the uncertainty associated with recovering oil demand, future monetary policy and governmental policies aimed at transitioning towards lower carbon energy, we expect prices for some or all of the commodities we produce to remain volatile.

NYMEX natural gas futures have shown strong improvements based on market expectations that associated gas-related activity in oil basins and dry gas basin activity will show modest rates of growth compared with the past due to capital discipline, core inventory exhaustion and infrastructure constraints.

NYMEX natural gas futures have shown strong improvements based on market expectations that associated gas-related activity in oil basins and dry gas basin activity will show modest rates of growth compared with the past due to infrastructure constraints, capital discipline and core inventory exhaustion.

In addition, the global energy crisis further highlighted the low cost and low emissions shale gas resource base in North America, supporting continued strong structural demand growth for U.S.

LNG exports and domestic industrial gas demand.

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 may impact the recovery of world economic growth and the demand for oil, natural gas and NGLs.

The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three months ended March 31, 2022 and 2021:

LNG exports, domestic industrial gas demand and power generation.

factors such as the pace and extent of tightening global monetary policy and the effectiveness of responses to combat the COVID-19 virus may impact the recovery of world economic growth and the demand for oil, natural gas and NGLs.

In addition, in response to continued supply chain disruptions attributable to the virus, the Russia-Ukraine conflict and global monetary policies over the last few years, cost inflation is occurring.

Specifically, our 2022 capital program is primarily being impacted by inflation in steel, diesel and labor.

The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Average NYMEX prices (a)

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Mont Belvieu NGLs composite (per gallon) (b)

Based on weighted average of bid week prompt month prices on the New York Mercantile Exchange (“NYMEX”).

Based on weighted average of bid week prompt month prices on the New York Mercantile Exchange.

Based on our estimated NGLs product composition per barrel.

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Consolidated Results of Operations

Overview of First Quarter 2022 Results

For first quarter 2022, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 108% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) somewhat offset by slightly lower production volumes when compared to the same quarter of 2021.

Daily production averaged 2.1 Bcfe in both the first quarter 2022 and 2021.Given the significant increase in commodity prices, our derivative fair value loss, which includes the non-cash fair value adjustment related to our derivatives, was $939.1 million compared to $57.9 million in the same quarter of the prior year.

Overview of Second Quarter 2022 Results

During second quarter 2022, we recognized net income of $452.9 million, or $1.77 per diluted common share compared to a loss of $156.5 million, or $0.65 per diluted common share during second quarter 2021.

The higher net income in second quarter 2022 compared to second quarter 2021 reflects the impact of significantly higher commodity prices on both natural gas, NGLs and oil sales and our reported derivative fair value loss.

See page 31 for more information on our derivative fair value loss.

For second quarter 2022, we experienced a significant increase in revenue from the sale of natural gas, NGLs and oil due to a 111% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) partially offset by slightly lower production volumes when compared to the same quarter of 2021.

Daily production averaged 2.1 Bcfe in both the second quarter 2022 and 2021.

Our second quarter 2022 financial and operating performance included the following results:

reduced total debt by $217.1 million utilizing cash on hand and operating cash flows;

cash flow from operating activities increased $150.5 million from second quarter 2021;

revenue from the sale of natural gas, NGLs and oil increased 118% from the same period of 2021 with a 121% increase in average realized prices (before cash settlements on our derivatives) partially offset by slightly lower production volumes;

revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 63% from the same period of 2021;

direct operating expense per mcfe was $0.11 in second quarter 2022 compared to $0.10 in the same period of 2021 due to higher contract labor and service costs partially offset by lower workover costs;

general and administrative expense per mcfe increased 10% from same quarter 2021 primarily due to higher salaries and benefits, higher stock-based compensation and higher general office expenses including technology costs;

reduced depletion, depreciation and amortization (“DD&A”) rate per mcfe by 2% from the same period of 2021.

Our cash flow from operating activities in second quarter 2022 was $324.7 million, an increase of $150.5 million from second quarter 2021 with significantly higher realized prices when compared to second quarter 2021 partially offset by slightly lower production volumes and the impact of negative working capital due to higher commodity prices.

Overview of First Six Months 2022 Results

During first six months 2022, we recognized a net loss of $4.0 million, or $0.02 per diluted common share compared to a net loss of $129.3 million, or $0.53 per diluted common share during first six months 2021.

The improvement in our net loss for first six months 2022 compared to 2021 reflects the impact of significantly higher commodity prices on both natural gas, NGLs and oil sales and our reported derivative fair value loss.

Given the significant increase in commodity prices, our derivative fair value loss, which includes the non-cash fair value adjustment related to our derivatives, was $1.2 billion in the first six months 2022 compared to $307.6 million in the first six months of the prior year.

For additional information on our derivative fair value loss, see page 31.

During first quarter 2022, we recognized a net loss of $456.8 million, or $1.86 per diluted common share compared to a net income of $27.2 million, or $0.11 per diluted common share during first quarter 2021.

The lower net income in first quarter 2022 compared to first quarter 2021 includes significantly higher derivative fair value loss (or the non-cash fair value adjustment related to our derivatives) due to higher commodity prices, higher deferred compensation expense and a loss on early extinguishment of debt partially offset by higher natural gas, NGLs and oil sales also due to higher commodity prices.

Our first quarter 2022 financial and operating performance included the following results:

reduced total debt by $350.0 million with cash on hand and cash flow;

For first six months 2022, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 110% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) somewhat offset by slightly lower production volumes, a loss on extinguishment of debt and higher exit costs when compared to the same period of 2021.

Daily production averaged 2.1 Bcfe in both the first six months 2022 and 2021.

Our first six months 2022 financial and operating performance included the following results:

reduced total debt by $567.1 million with cash on hand and operating cash flows;

realized a significant improvement in our debt metrics from year-end 2021;

reduced future interest expense through debt reduction combined with refinancing a portion of 9.25% senior notes due 2026 with 4.75% senior notes due 2030;

cash flow from operating activities increased $297.2 million from first quarter 2021;

ended the first quarter 2022 with $112.9 million of cash on hand;

cash flow from operating activities increased $447.7 million from first six months 2021;

revenue from the sale of natural gas, NGLs and oil increased 95% from the same period of 2021 with a 97% increase in average realized prices (before cash settlements on our derivatives) partially offset by slightly lower production volumes;

revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 61% from the same period of 2021;

direct operating expense per mcfe was $0.11 in first quarter 2022 compared to $0.09 in the same period of 2021 due to higher water handling and higher contract labor and service costs;

general and administrative expense per mcfe increased 15% from same quarter 2021 primarily due to higher stock-based compensation and higher salaries and benefits;

reduced depletion, depreciation and amortization (“DD&A”) rate per mcfe by 2% from the same period of 2021.

Our cash flow from operating activities in first quarter 2022 was $406.4 million, an increase of $297.2 million from first quarter 2021 with significantly higher realized prices when compared to first quarter 2021 partially offset by slightly lower production volumes.

direct operating expense per mcfe was $0.11 in first six months 2022 compared to $0.10 in the same period of 2021 due to higher contract labor and higher service and water handling hauling costs partially offset by lower workover costs;

general and administrative expense per mcfe for the first six months 2022 increased 10% from same period of 2021 primarily due to higher stock-based compensation, higher salaries and benefits and higher general office expenses including technology cost;

reduced DD&A rate per mcfe by 2% from the same period of 2021.

Our cash flow from operating activities in first six months 2022 was $731.1 million, an increase of $447.7 million from same period of 2021 with significantly higher realized prices when compared to same period of 2021 partially offset by slightly lower production volumes and higher negative working capital.

Natural Gas, NGLs and Oil Sales, Production and Realized Price Calculations

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Our revenues are generally recognized when control of the product is transferred to the customer and collectability is reasonably assured.

In first quarter 2022, natural gas, NGLs and oil sales increased 71% compared to first quarter 2021 with a 72% increase in average realized prices (before cash settlements on our derivatives) partially offset by a 1% reduction in production volumes.

The following table illustrates the primary components of natural gas, NGLs and oil sales for the three months ended March 31, 2022 and 2021 (in thousands):

In second quarter 2022, natural gas, NGLs and oil sales increased 118% compared to second quarter 2021 with a 121% increase in average realized prices (before cash settlements on our derivatives) partially offset by a 1% reduction in production volumes.

In first six months 2022, natural gas, NGLs and oil sales increased 95% compared to first six months 2021 with a 97% increase in average realized prices partially offset by a 1% reduction in production volumes.

The following table illustrates the primary components of natural gas, NGLs and oil sales for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

Natural gas, NGLs and oil sales

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Our production is determined by drilling success which offsets the natural decline of our natural gas and oil reserves through production.

Our production for the three months ended March 31, 2022 and 2021 is set forth in the following table:

Our production for the three and six months ended June 30, 2022 and 2021 is set forth in the following table:

Three Months Ended

Six Months Ended

Production (a)

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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.

Our average realized price received (including all derivative settlements and third-party transportation costs) during first quarter 2022 was $3.23 per mcfe compared to $1.55 per mcfe in first quarter 2021.

Our average realized price received (including all derivative settlements and third-party transportation costs) during second quarter 2022 was $3.29 per mcfe compared to $1.56 per mcfe in second quarter 2021.

Our average realized price received (including all derivative settlements and third party transportation costs) during first six months 2022 was $3.26 per mcfe compared to $1.55 per mcfe in first six months 2021.

We believe computed final realized prices should include the total impact of transportation, gathering, processing and compression expense.

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Average realized prices (excluding derivative settlements) do include transportation costs where we receive net revenue proceeds from purchasers.

Average realized price calculations for three months ended March 31, 2022 and 2021 are shown below:

Average realized price calculations for three and six months ended June 30, 2022 and 2021 are shown below:

Three Months Ended

Six Months Ended

Average Prices

Average realized prices (excluding derivative

settlements):

Average realized prices (excluding

derivative settlements):

Natural gas (per mcf)

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Total (per mcfe) (a)

Average realized prices (including all derivative

settlements):

Average realized prices (including all

derivative settlements):

Natural gas (per mcf)

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Total (per mcfe) (a)

Average realized prices (including all derivative

settlements and third-party transportation costs

paid by Range):

Average realized prices (including all

derivative settlements and third-party

transportation costs paid by Range):

Natural gas (per mcf)

7 unchanged sentences

Three Months Ended

Six Months Ended

Average natural gas differentials below NYMEX

Realized gains (losses) on basis hedging

Realized (losses) 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

Six Months Ended

Price (per mcf)

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Three Months Ended

Six Months Ended

Price (per bbl)

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Three Months Ended

Six Months Ended

Price (per bbl)

2 unchanged sentences

Three Months Ended

Six Months Ended

Price (per mcfe)

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NGLs and oil sales

Transportation, gathering, processing and compression expense was $297.8 million in first quarter 2022 compared to $274.3 million in first quarter 2021.

These third-party costs are higher in first quarter 2022 when compared to first quarter 2021 due to the impact of higher NGLs prices which results in higher processing costs.

Transportation, gathering, processing and compression expense was $327.9 million in second quarter 2022 compared to $282.8 million in second quarter 2021.

These third-party costs are higher in second quarter 2022 when compared to second quarter 2021 due to the impact of higher NGLs prices which results in higher processing costs, higher electricity and fuel costs.

In addition, second quarter 2022 includes a one-time adjustment of $7.5 million that reflects a one-time settlement regarding transportation, gathering and processing charges.

Transportation, gathering, processing and compression expense was $625.7 million in first six months 2022 compared to $557.2 million in the same period of the prior year.

These third-party costs are higher in first six months 2022 when compared to the same period of 2021 due to the impact of higher NGLs prices which results in higher processing costs and higher electricity and fuel costs.

We have included these costs in the calculation of average realized prices (including all derivative settlements and third-party transportation expenses paid by Range).

The following table summarizes transportation, gathering, processing and compression expense for the three months ended March 31, 2022 and 2021 on a per mcf and per barrel basis (in thousands, except for costs per unit):

The following table summarizes transportation, gathering, processing and compression expense for the three and six months ended June 30, 2022 and 2021 on a per mcf and per barrel basis (in thousands, except for costs per unit):

Three Months Ended

Six Months Ended

Transportation, gathering,

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Oil (per bbl)

Derivative fair value loss was $939.1 million in first quarter 2022 compared to $57.9 million in first quarter 2021.

Derivative fair value loss was $239.9 million in second quarter 2022 compared to a loss of $249.7 million in second quarter 2021.

Derivative fair value loss was $1.2 billion in first six months 2022 compared to a loss of $307.6 million in the same period of the prior year.

All of our derivatives are accounted for using the mark-to-market accounting method.

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Gains on our derivatives generally indicate potentially lower wellhead revenues in the future while losses indicate potentially higher future wellhead revenues.

The following table summarizes the impact of our commodity derivatives for three months ended March 31, 2022 and 2021 (in thousands):

The following table summarizes the impact of our commodity derivatives for three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

Derivative fair value loss per consolidated statements of

Non-cash fair value (loss) gain:

Non-cash fair value gain (loss):

Natural gas derivatives

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Divestiture contingent consideration

Total non-cash fair value (loss) gain (1)

Total non-cash fair value gain (loss) (1)

Net cash payment on derivative settlements:

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This also includes the change in fair value of our divestiture contingent consideration.

Brokered natural gas, marketing and other revenue in first quarter 2022 was $87.4 million compared to $80.6 million in first quarter 2021 which is the result of significantly higher broker sales prices somewhat offset by lower broker sales volumes (volumes not related to our production).

First quarter 2021 also includes $8.8 million received as part of a capacity release agreement.

Brokered natural gas, marketing and other revenue in second quarter 2022 was $108.2 million compared to $62.6 million in second quarter 2021 which is the result of significantly higher broker sales prices somewhat offset by lower broker sales volumes (volumes not related to our production).

Brokered natural gas, marketing and other revenue was $195.6 million in first six months 2022 compared to $143.1 million in first six months 2021 which is the result of significantly higher broker sales prices somewhat offset by lower broker sales volumes.

First six months 2021 also includes $8.8 million received as part of a capacity release agreement.

We continue to optimize our transportation portfolio using these volumes.

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We believe some of our expense fluctuations are best analyzed on a unit-of-production or per mcfe basis.

The following table presents information about certain of our expenses on a per mcfe basis for the three months ended March 31, 2022 and 2021:

The following table presents information about certain of our expenses on a per mcfe basis for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Direct operating expense

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Depletion, depreciation and amortization expense

Direct operating expense was $20.3 million in first quarter 2022 compared to $17.7 million in first quarter 2021.

Direct operating expense was $20.1 million in second quarter 2022 compared to $19.8 million in second quarter 2021.

Direct operating expenses include normally recurring expenses to operate and produce our wells, non-recurring well workovers and repair-related expenses.

Our direct operating costs increased in first quarter 2022 primarily due to higher water handling/hauling costs, higher contract labor and services and higher workover costs.

Our production volumes decreased 1% in first quarter 2022.

We incurred $881,000 of workover costs in first quarter 2022 compared to $659,000 in first quarter 2021.

On a per mcfe basis, direct operating expense was $0.11 in first quarter 2022 compared to $0.09 in the same quarter of the prior year due to higher water handling/hauling costs and higher contract labor and services.

The following table summarizes direct operating expense per mcfe for the three months ended March 31, 2022 and 2021:

Our direct operating costs increased in second quarter 2022 primarily due to higher contract labor and services partially offset by lower workover costs.

Our costs for services, labor and supplies have recently increased due to increased demand for those items, supply chain disruptions and inflation.

Our production volumes decreased 1% in second quarter 2022 compared to the same period of the prior year.

We incurred $203,000 of workover costs in second quarter 2022 compared to $1.7 million in second quarter 2021.

On a per mcfe basis, direct operating expense was $0.11 in second quarter 2022 compared to $0.10 in the same quarter of the prior year due to higher contract labor and services somewhat offset by lower workover costs.

Direct operating expense was $40.3 million in first six months 2022 compared to $37.4 million in the same period of the prior year due to higher contract labor and higher services and water handling/hauling costs somewhat offset by lower workover costs.

Our production volumes decreased 1% in first six months 2022 compared to the same period of the prior year.

We incurred $1.1 million of workover costs in first six months 2022 compared to $2.4 million in first six months 2021.

On a per mcfe basis, direct operating costs increased 10%, from $0.10 to $0.11 with the increase due to higher water handling/handling costs and higher contract labor and services somewhat offset by lower workover costs.

The following table summarizes direct operating expense per mcfe for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Direct operating

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which functions as a tax on unconventional natural gas and oil production from the Marcellus Shale in Pennsylvania.

This impact fee was $6.6 million in first quarter 2022 compared to $4.6 million in first quarter 2021 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.

The following table summarizes production and ad valorem taxes per mcfe for the three months ended March 31, 2022 and 2021:

This impact fee was $7.5 million in second quarter 2022 compared to $8.4 million in second quarter 2021.

The impact fee is based on drilling activities and is adjusted based on prevailing natural gas prices.

Production and ad valorem taxes includes an impact fee of $14.1 million in first six months 2022 compared to $13.0 million in the first six months 2021 due to higher natural gas prices.

The following table summarizes production and ad valorem taxes per mcfe for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Production and ad valorem taxes

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Total production and ad valorem taxes

General and administrative (G&A) expense was $43.0 million in first quarter 2022 compared to $38.0 million in first quarter 2021.

The first quarter 2022 increase of $5.0 million when compared to the same period of 2021 is primarily due to higher stock-based compensation expense of $2.2 million, higher general office expenses including technology costs and higher salaries and benefits.

At March 31, 2022, the number of G&A employees decreased 1% when compared to March 31, 2021.

On a per mcfe basis, first quarter 2022 G&A expense was 15% higher than first quarter 2021 due to higher stock-based compensation expense, higher general office expenses and higher salaries and benefits.

The following table summarizes G&A expenses on a per mcfe basis for the three months ended March 31, 2022 and 2021:

General and administrative (G&A) expense was $43.5 million in second quarter 2022 compared to $40.2 million in second quarter 2021.

The second quarter 2022 increase of $3.3 million when compared to the same period of 2021 is primarily due to higher stock-based compensation expense of $888,000, higher general office expenses including technology costs and higher salaries and benefits somewhat offset by lower legal expenses.

On a per mcfe basis, second quarter 2022 G&A expense was 10% higher than second quarter 2021 primarily due to higher general office expenses and higher salaries and benefits.

G&A expense for first six months 2022 increased $8.3 million when compared to the same period 2021 due to higher stock-based compensation of $3.1 million, higher salaries and benefits of $2.0 million and higher general office expenses including technology costs partially offset by lower legal expenses.

On a per mcfe basis, first six months 2022 G&A expense increased 10% from first six months 2021 due to higher stock-based compensation, higher salaries and benefits and higher general office expenses.

The following table summarizes G&A expenses on a per mcfe basis for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

General and administrative

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Total general and administrative expense

Interest expense was $47.2 million in first quarter 2022 compared to $56.9 million in first quarter 2021.

The following table presents information about interest expense per mcfe for the three months ended March 31, 2022 and 2021:

Interest expense was $42.0 million in second quarter 2022 compared to $57.3 million in second quarter 2021.

Interest expense was $89.2 million for first six months 2022 compared to $114.2 million for first six months 2021.

The following table presents information about interest expense per mcfe for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Bank credit facility

Amortization of deferred financing costs and other

Amortization of deferred financing costs

Total interest expense

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Includes commitment fees but excludes debt issue costs and amortization of discounts and premiums.

On an absolute basis, the decrease in interest expense for first quarter 2022 from the same period of 2021 was primarily due to lower overall average interest rates and lower average outstanding debt balances.

Average debt outstanding on the bank credit facility for first quarter 2022 was $65.3 million compared to $220.4 million in first quarter 2021 and the weighted average interest rate on the bank credit facility was 2.5% in first quarter 2022 compared to 2.2% in first quarter 2021.

Depletion, depreciation and amortization expense was $85.6 million in first quarter 2022 compared to $88.4 million in first quarter 2021.

On an absolute basis, the decrease in interest expense for second quarter 2022 from the same period of 2021 was primarily due to lower overall average interest rates and lower overall average outstanding debt balances.

Average debt outstanding on the bank credit facility for second quarter 2022 was $90.0 million compared to $195.5 million in second quarter 2021 and the weighted average interest rate on the bank credit facility was 4.1% in second quarter 2022 compared to 2.0% in second quarter 2021.

On an absolute basis, the decrease in interest expense for first six months 2022 from the same period 2021 was primarily due to lower overall average interest rates and lower outstanding debt balances.

Average debt outstanding on the bank credit facility was $77.6 million for first six months 2022 compared to $208.0 million for first six months 2021 and the weighted average interest rates on the bank credit facility was 3.4% in first six months 2022 compared to 2.1% in first six months 2021.

Depletion, depreciation and amortization expense was $86.5 million in second quarter 2022 compared to $90.6 million in second quarter 2021.

This decrease is due to a 2% decrease in depletion rates and a 1% decrease in production volumes.

Depletion expense, the largest component of DD&A expense, was $0.45 per mcfe in first quarter 2022 compared to $0.46 per mcfe in first quarter 2021.

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.

The following table summarizes DD&A expense per mcfe for the three months ended March 31, 2022 and 2021:

Depletion expense, the largest component of DD&A expense, was $0.45 per mcfe in second quarter 2022 compared to $0.46 per mcfe in second quarter 2021.

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.

DD&A expense was $172.1 million in first six months 2022 compared to $179.0 million in the same period 2021.

This is due to a 2% decrease in depletion rates and a 1% decrease in production volumes.

Depletion expense per mcfe was $0.45 in first six months 2022 compared to $0.46 in the same period of 2021.

The following table summarizes DD&A expense per mcfe for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Depletion and amortization

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Stock-based compensation includes the amortization of restricted stock grants and PSUs.

The following table details the allocation of stock-based compensation to functional expense categories for the three months ended March 31, 2022 and 2021 (in thousands):

The following table details the allocation of stock-based compensation to functional expense categories for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

Direct operating expense

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Total stock-based compensation

Brokered natural gas and marketing expense was $93.1 million in first quarter 2022 compared to $72.3 million in first quarter 2021 due to higher commodity prices somewhat offset by lower broker purchase volumes (volumes not related to our production).

The following table details our brokered natural gas, marketing and other net margin for the three months ended March 31, 2022 and 2021 (in thousands):

Brokered natural gas and marketing expense was $110.1 million in second quarter 2022 compared to $69.0 million in second quarter 2021 due to significantly higher commodity prices somewhat offset by lower broker purchase volumes (volumes not related to our production).

Brokered natural gas marketing expense was $203.2 million in first six months 2022 compared to $141.3 million in first six months 2021 due to significantly higher commodity prices somewhat offset by lower broker purchased volumes.

The following table details our brokered natural gas, marketing and other net margin for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

Brokered natural gas and marketing

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Net brokered natural gas and marketing margin

The three months ended March 31, 2021 includes $8.8 million received as part of a capacity release agreement.

The six months ended June 30, 2021 includes $8.8 million received as part of a capacity release agreement.

Includes transportation costs.

Exploration expense was $4.7 million in first quarter 2022 compared to $5.5 million in first quarter 2021 due to lower delay rentals and other expense.

The following table details our exploration expense for the three months ended March 31, 2022 and 2021 (in thousands):

Exploration expense was $7.5 million in second quarter 2022 compared to $5.0 million in second quarter 2021 due to higher delay rentals and other expense.

Exploration expense was $12.2 million in first six months 2022 compared to $10.6 million in first six months 2021 due to higher delay rentals and other expense.

The following table details our exploration expense for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

Delay rentals and other

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Total exploration expense

Abandonment and impairment of unproved properties was $2.0 million in first quarter 2022 compared to $3.0 million in first quarter 2021.

Abandonment and impairment of unproved properties for first quarter declined when compared to the same periods of 2021 due to lower estimated expirations in Pennsylvania.

Exit and termination costs was $11.1 million in first quarter 2022 compared to $13.7 million in first quarter 2021.

In first quarter 2022, we recorded $11.1 million accretion expense primarily related to retained liabilities for certain gathering, transportation and processing obligations extending until 2030 compared to accretion expense of $13.2 million in the same quarter of the prior year.

Deferred compensation plan expense was a loss of $73.3 million in first quarter 2022 compared to a loss of $19.8 million in first quarter 2021.

Abandonment and impairment of unproved properties was $7.1 million in second quarter 2022 compared to $2.2 million in second quarter 2021.

Abandonment and impairment of unproved properties was $9.1 million in first six months 2022 compared to $5.2 million in the same period of 2021.

Abandonment and impairment of unproved properties for second quarter and first six months 2022 increased when compared to the same periods of 2021 due to higher estimated lease expirations in Pennsylvania.

Exit and termination costs was $36.1 million in second quarter 2022 compared to a gain of $15.9 million in second quarter 2021.

In second quarter 2022, we recorded $11.3 million accretion expense primarily related to retained liabilities for certain gathering, transportation and processing obligations extending until 2030 compared to accretion expense of $12.2 million in the same quarter of the prior year.

The second quarter 2022 also includes an unfavorable adjustment of $24.8 million to increase this obligation for a change in our forecasted drilling plans of the buyer and other adjustments.

The second quarter 2021 also includes 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 the forecasted drilling plans of the buyer.

Exit and termination costs was $47.2 million in first six months 2022 compared to a gain of $2.2 million in first six months 2021.

We recorded accretion expense of $22.4 million in first six months 2022 compared to accretion expense of $25.4 million in the same period of 2021.

The first six months 2022 includes an unfavorable adjustment of $24.8 million to increase this obligation for a change in our forecasted drilling plans of the buyer and other adjustments compared to a favorable adjustment of $28.2 million in the same period of 2021 to reduce our original estimate of the obligations.

Deferred compensation plan was income of $19.2 million in second quarter 2022 compared to a loss of $35.5 million in second quarter 2021.

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.

Our stock price increased from $17.83 at December 31, 2021 to $30.38 at March 31, 2022.

In the same period of the prior year, our stock price increased from $6.70 at December 31, 2020 to $10.33 at March 31, 2021.

Loss on early extinguishment of debt was a loss of $69.2 million in first quarter 2022 compared to a loss of $35,000 in the same period of the prior year.

Our stock price decreased from $30.38 at March 31, 2022 to $24.75 at June 30, 2022.

In the same period of the prior year, our stock price increased from $10.33 at March 31, 2021 to $16.76 at June 30, 2021.

During first six months 2022, deferred compensation was a loss of $54.1 million compared to a loss of $55.3 million in the same period of 2021.

Our stock price increased from $17.83 at December 31, 2021 to $24.75 at June 30, 2022.

In the same period of the prior year, our stock price increased from $6.70 at December 31, 2020 to $16.76 at June 30, 2021.

Loss on early extinguishment of debt was a loss of $22,000 in second quarter 2022 compared to a loss of $63,000 in the same period of the prior year.

Loss on extinguishment of debt was $69.2 million in first six months 2022 compared to $98,000 in the same period of the prior year.

In first quarter 2022, we announced a call for the redemption of $850.0 million of our outstanding 9.25% senior notes due 2026.

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We recognized a loss on early extinguishment of debt in first quarter 2022 of $69.2 million, net of transaction costs and the expensing of the remaining deferred financing costs on the repurchased debt.

Income tax (benefit) expense was a benefit of $116.1 million in first quarter 2022 compared to expense of $2.7 million in first quarter 2021.

Income tax expense (benefit) was an expense of $103.3 million in second quarter 2022 compared to benefit of $1.3 million in second quarter 2021.

Income tax benefit was $12.8 million in first six months 2022 compared to an expense of $1.4 million in the same period of 2021.

The 2022 and 2021 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.

As of March 31, 2022, we have entered into derivative agreements covering 295.9 Bcfe for the remainder of 2022, 246.6 Bcfe for 2023 and 73.2 Bcfe for 2024, not including our basis swaps.

The following table presents sources and uses of cash and cash equivalents for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended

As of June 30, 2022, we have entered into derivative agreements covering 196.4 Bcfe for the remainder of 2022, 270.6 Bcfe for 2023 and 104.5 Bcfe for 2024, not including our basis swaps.

The following table presents sources and uses of cash and cash equivalents for the six months ended June 30, 2022 and 2021 (in thousands):

Six Months Ended

Sources of cash and cash equivalents

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Sources of Cash and Cash Equivalents

Cash flows provided from operating activities in first three months 2022 was $406.4 million compared to $109.3 million in first three months 2021.

Cash flows provided from operating activities in first six months 2022 was $731.1 million compared to $283.4 million in first six months 2021.

Cash provided from operating activities is largely dependent upon commodity prices and production volumes, net of the effects of settlement of our derivative contracts.

The increase in cash provided from operating activities from first three months 2021 to first three months 2022 reflects higher realized prices partially offset by lower production volumes.

As of March 31, 2022, we have hedged more than 55% of our projected total production for the remainder of 2022, with more than 65% of our projected natural gas production hedged.

The increase in cash provided from operating activities from first six months 2021 to first six months 2022 reflects significantly higher realized prices partially offset by lower production volumes.

As of June 30, 2022, we have hedged more than 55% of our projected total production for the remainder of 2022, with more than 60% of our projected natural gas production hedged.

Net cash provided from operating activities was affected by a 1% decrease in production and working capital changes or the timing of cash receipts and disbursements.

Changes in working capital (as reflected in our consolidated statements of cash flows) for first three months 2022 were negative $77.4 million compared to a negative $77.3 million for first three months 2021.

Issuance of senior notes in first three months 2022 includes the issuance of $500.0 million new 4.75% senior notes due 2030.

Changes in working capital (as reflected in our consolidated statements of cash flows) for first six months 2022 were negative $256.8 million compared to a negative $73.7 million for first six months 2021.

Issuance of senior notes in first six months 2022 includes the issuance of $500.0 million new 4.75% senior notes due 2030.

Uses of Cash and Cash Equivalents

Additions to natural gas and oil properties for first three months 2022 were consistent with expectations relative to our 2022 capital budget.

Repayment of senior notes for first three months 2022 includes the redemption of our $850.0 million aggregate principal amount 9.25% senior notes due 2026.

Additions to natural gas and oil properties for first six months 2022 were consistent with expectations relative to our announced 2022 capital budget.

We currently believe our 2022 capital program will approach the high-end of our announced range of $460.0 million to $480.0 million due to the impact of cost inflation.

Repayment of senior notes for first six months 2022 includes the redemption of our $850.0 million aggregate principal amount 9.25% senior notes due 2026 along with the retirement of our 5.00% senior notes due 2022 and our 5.87% 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.

Treasury stock purchases for first six months 2022 include the repurchase of 4.6 million shares as part of our previously announced stock repurchase program.

Liquidity and Capital Resources

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We continue to manage the duration and level of our drilling and completion commitments in order to maintain flexibility with regard to our activity level and capital expenditures.

As of March 31, 2022, we had cash on hand in the amount of $112.9 million.

As of June 30, 2022, we had cash on hand in the amount of $356,000 and availability under our credit facility of $1.2 billion.

Sources of Cash

We currently expect our 2022 capital program to be funded by cash flows from operations.

During the quarter ended March 31, 2022, we generated $406.4 million of cash flows from operating activities.

As of March 31, 2022, the remaining available borrowing capacity under our bank credit facility was $2.1 billion and we had $112.9 million cash on hand.

We expect our 2022 capital program to be funded by cash flows from operations.

During the six months ended June 30, 2022, we generated $731.1 million of cash flows from operating activities.

As of June 30, 2022, we had approximately $1.5 billion of liquidity, consisting of $1.2 billion available under our bank credit facility and $356,000 of cash on hand.

Our borrowing base can be adjusted as a result of changes in commodity prices, acquisitions or divestitures of proved properties or financing activities.

We may draw on our bank credit facility to meet short-term cash requirements.

In early January 2022, we issued $500.0 million aggregate principal amount of new 4.75% senior notes due 2030, with the proceeds along with cash on hand and our credit facility to fully redeem our 9.25% senior notes due 2026 in February 2022.

In early January 2022, we issued $500.0 million aggregate principal amount of new 4.75% senior notes due 2030 and used the proceeds, cash on hand and our credit facility to fully redeem our 9.25% senior notes due 2026 in February 2022.

Although we expect cash flows and capacity under the existing credit facility to be sufficient to fund our expected 2022 capital program, we may also elect to raise funds through new debt or equity offerings or from other sources of financing.

Any downgrades in our credit ratings could make it more difficult or expensive for us to borrow additional funds.

All of our sources of liquidity can be affected by the general conditions of the broader economy, the global pandemic, force majeure events and fluctuations in commodity prices, operating costs and volumes produced, all of which affect us and our industry.

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Our bank credit facility is secured by substantially all of our assets.

As of March 31, 2022, we had no outstanding borrowings under our bank credit facility and we maintained a borrowing base of $3.0 billion and aggregate lender commitments of $2.4 billion.

We also have undrawn letters of credit of $338.0 million as of March 31, 2022.

We were in compliance with applicable covenants under the bank credit facility as of March 31, 2022.

As of June 30, 2022, we had $1.0 million of outstanding borrowings under our bank credit facility and we maintained a borrowing base of $3.0 billion and aggregate lender commitments of $1.5 billion.

We also have undrawn letters of credit of $330.5 million as of June 30, 2022.

We were in compliance with the applicable covenants under the bank credit facility as of June 30, 2022.

The borrowing base is subject to regular, semi-annual redeterminations and is dependent on a number of factors but primarily the lender’s assessment of future cash flows.

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See Note 8 for additional information.

Our daily weighted-average bank credit facility debt balance was $65.3 million for the three months ended March 31, 2022 compared to $220.4 million for the same period of the prior year.

As of April 14, 2022, borrowings under the amended and restated revolving bank facility can either be at the alternate base rate (“ABR,”

as defined in the bank credit facility agreement) plus a spread ranging from 0.75% to 1.75% or at the Term Benchmark Rate (as defined in the bank credit facility agreement) plus a spread ranging from 1.75% to 2.75%.

Our daily weighted-average bank credit facility debt balance was $77.6 million for first six months ended June 30, 2022 compared to $208.0 million for the same period of the prior year.

As of April 14, 2022, borrowings under the amended and restated revolving 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 0.75% to 1.75% or at the secured overnight financing rate (SOFR, as defined in the bank credit facility agreement) plus a spread ranging from 1.75% to 2.75%.

The applicable spread is dependent upon borrowings relative to the borrowing base.

We may elect, from time to time, to convert all or any part of our Term Benchmark loans to base rate loans or to convert all or any of the base rate loans to Term Benchmark loans.

We may elect, from time to time, to convert all or any part of our SOFR loans to base rate loans or to convert all or any of the base rate loans to SOFR loans.

We use cash for the development, exploration and acquisition of natural gas and oil properties and for the payment of gathering, transportation and processing costs, operating, general and administrative costs, taxes and debt obligations, including interest.

Expenditures for the development, exploration and acquisition of natural gas and oil properties are the primary use of our capital resources.

During first quarter 2022, we funded $102.7 million on capital expenditures as reported in our consolidated statement of cash flows.

The amount of our future capital expenditures will depend upon a number of factors including our cash flows from operating, investing and financing activities, infrastructure availability, supply and demand

fundamentals and our ability to execute our development program.

In addition, the impact of commodity prices on investment opportunities, the availability of capital and the timing and results of our development activities may lead to changes in funding requirements for future development.

During first six months 2022, we funded $231.1 million of capital expenditures as reported in our consolidated statement of cash flows.

In addition, the impact of commodity prices on investment opportunities, the availability of capital and the timing and results of our development activities may lead to

changes in funding requirements for future development.

We periodically review our budget to assess changes in current and projected cash flows, debt requirements and other factors.

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The amounts involved may be material.

Our next significant long-term debt maturity is in the amount of $532.2 million due 2023 which is callable in December 2022.

As part of our strategy for 2022, we will continue to focus on improving our debt metrics.

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In early 2022, the Board approved an increase to our share repurchase program, where we are now authorized to repurchase an additional $430.0 million of our outstanding shares of common stock for an aggregate available at the time of $500.0 million.

During the first six months 2022, we repurchased 5.1 million shares of our common stock at an aggregate cost of $146.0 million (including 500,000 shares purchased in June and settled in July).

The total remaining share repurchase authorization was approximately $354.0 million at June 30, 2022.

Shelf Registration

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The determination of the amount of future dividends, if any, to be declared and paid is at the sole discretion of the Board of Directors and primarily depends on cash flow, capital expenditures, debt covenants and various other factors.

We expect our quarterly cash dividend will be reinstated in the second half of 2022.

We expect our quarterly cash dividend to be reinstated in the second half of 2022.

Cash Contractual Obligations

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.

As of March 31, 2022, 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.

As of March 31, 2022, we had a total of $338.0 million of undrawn letters of credit under our bank credit facility.

Since December 31, 2021, there have been no material changes to our contractual obligations other than the changes to our indebtedness as discussed further in Note 8.

As of June 30, 2022, 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.

As of June 30, 2022, we had a total of $330.5 million of undrawn letters of credit under our bank credit facility.

Since December 31, 2021, there have been no material changes to our contractual obligations other than the changes to our indebtedness as discussed further in Note 8 and changes to our commitments as discussed in Note 16.

Interest Rates

At March 31, 2022, we had approximately $2.6 billion of debt outstanding which bore interest at fixed rates averaging 5.7%.

At June 30, 2022, we had approximately $2.4 billion of debt outstanding which bore interest at fixed rates averaging 5.7%.

Bank debt totaling $1.0 million bears interest at a floating rate, which was 1.5% at June 30, 2022.

The 30-day SOFR rate at June 30, 2022 was approximately 1.7%.

A 1% increase in short-term interest rates on the floating-rate debt outstanding on June 30, 2022, would result in approximately $10,000 in additional interest expense.

Off-Balance Sheet Arrangements

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Certain sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations include forward-looking statements concerning trends or events potentially affecting our business.

These statements contain words such as “anticipates,”

These statements typically contain words such as “anticipates,”

“believes,”

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“plans,”

“projects,”

“could,”

“estimates,”

“predicts,”

“may,”

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“would”

or similar words

indicating that future outcomes are uncertain.

or similar words indicating that future outcomes are uncertain.

In accordance with “safe harbor”

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We are also exposed to market risks related to changes in interest rates.

These risks did not change materially from December 31, 2021 to March 31, 2022.

These risks did not change materially from December 31, 2021 to June 30, 2022.

Commodity Price Risk

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Our program may also include a three-way collar which is a combination of three options.

At March 31, 2022, our derivative program includes swaps, collars, three-way collars and swaptions.

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 March 31, 2022, approximated a net unrealized pretax loss of

$989.8 million.

At June 30, 2022, our derivative program includes swaps, collars, three-way collars and swaptions.

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, 2022, approximated a net unrealized pretax loss of $802.1 million.

These contracts expire monthly through December 2024.

At March 31, 2022, the following commodity derivative contracts were outstanding, excluding our basis swaps which are discussed below:

At June 30, 2022, the following commodity derivative contracts were outstanding, excluding our basis swaps which are discussed below:

Contract Type

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5,123 bbls/day

January-September 2024

NLGs (C2-Ethane)

April-June 2022

1,000 bbls/day

NGLs (C3-Propane)

April-June 2022

3,989 bbls/day

NGLs (NC4-Butane)

April-June 2022

July-September 2022

2,000 bbls/day

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We also sold natural gas call swaptions of 40,000 Mmbtu/day for 2023 at a weighted average price of $2.91.

The fair market value of these swaptions at March 31, 2022 was a net derivative liability of $45.9 million.

The fair market value of these swaptions at June 30, 2022 was a net derivative liability of $26.0 million.

We believe NGLs prices are somewhat seasonal, particularly for propane.

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Basis swap agreements effectively fix the basis adjustments.

The fair value of the natural gas basis swaps was a gain of $22.5 million March 31, 2022 and they settle monthly through December 2024.

At March 31, 2022, we are entitled to receive contingent consideration associated with the sale of our North Louisiana assets, annually through 2023, of up to $45.5 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.

The fair value at March 31, 2022 was a gain of $34.8 million.

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 March 31, 2022.

The fair value of the natural gas basis swaps was a gain of $2.5 million June 30, 2022 and they settle monthly through December 2024.

At June 30, 2022, we are entitled to receive contingent consideration associated with the sale of our North Louisiana assets, annually through 2023, of up to $45.5 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.

The fair value at June 30, 2022 was a gain of $34.8 million.

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, 2022.

We remain at risk for possible changes in the market value of commodity derivative instruments;

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Our derivative contracts are with multiple counterparties to minimize our exposure to any individual counterparty.

At March 31, 2022, our derivative counterparties include fifteen financial institutions, of which all but five are secured lenders in our bank credit facility.

At June 30, 2022, our derivative counterparties include fifteen 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.

While our counterparties are primarily major investment grade financial institutions, the fair value of our derivative contracts has been adjusted to account for the risk of non-performance by certain of our counterparties, which was immaterial.

Through March 31, 2021, our propane and butane sales from the Marcus Hook facility near Philadelphia were short-term and to a single purchaser and our ethane sales were to a single international customer.

As of April 1, 2021, other than limited spot sales, our propane and butane sales have been diversified among several purchasers and are for set terms of twelve to twenty-four months.

Interest Rate Risk

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This is accomplished through a mix of fixed rate senior and variable rate bank debt.

At March 31, 2022, we had $2.6 billion of debt outstanding which bears interest at fixed rates averaging 5.7%.

At June 30, 2022, we had $2.4 billion of debt outstanding which bears interest at fixed rates averaging 5.7%.

Bank debt totaling $1.0 million bears interest at a floating rate, which was 1.5% at June 30, 2022.

The 30-day SOFR rate an June 30, 2022 was approximately 1.7%.

A 1% increase in short-term interest rates on the floating-rate debt outstanding on June 30, 2022, would result in approximately $10,000 in additional interest expense.

CONTROLS A ND 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.

Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of March 31, 2022 at the reasonable assurance level.

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, 2022 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There was no change in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

P ART II –

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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.

What changed 10-Q

Item 1. Financial Statements