What changed in this filing

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Item 1. Financial Statements

2024-07-23 compared with 2024-04-23 · 381 added, 262 removed, 810 unchanged (44% of the section changed)

26 unchanged sentences

Divestiture contract obligation

Current maturities of long-term debt

Total current liabilities

10 unchanged sentences

Common stock, $ 0.01 par, 475,000,000 shares authorized, 267,419,194 issued at

March 31, 2024 and 265,756,369 issued at December 31, 2023

Common stock held in treasury, at cost, 24,716,065 shares at March 31, 2024 and

June 30, 2024 and 265,756,369 shares at December 31, 2023

Common stock held in treasury, at cost, 25,020,936 shares at June 30, 2024 and

24,716,065 shares at December 31, 2023

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(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:

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Income before income taxes

Income tax expense:

Income tax (benefit) expense:

Net income per common share:

5 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive income:

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(Unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

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

Deferred income tax expense

Deferred income tax (benefit) expense

Depletion, depreciation and amortization

51 unchanged sentences

Balance as of March 31, 2024

Issuance of common stock

Stock-based compensation expense

Dividends ($ 0.08 per share)

Treasury stock repurchased

Other comprehensive loss

Balance as of June 30, 2024

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

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Balance as of March 31, 2023

Issuance of common stock

Stock-based compensation expense

Dividends ($ 0.08 per share)

Treasury stock repurchased

Excise tax on stock repurchases

Other comprehensive income

Balance as of June 30, 2023

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

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(1) SUMMARY OF ORGANIZATION AND NATURE OF BUSINESS

Range Resources Corporation is a Fort Worth, Texas-based independent natural gas, natural gas liquids (NGLs) and crude oil and condensate company engaged in the exploration, development and acquisition of natural gas and liquids properties in the Appalachian region of the United States.

Our objective is to build stockholder value through returns-focused development of natural gas properties.

Range Resources Corporation is a Fort Worth, Texas-based independent natural gas, natural gas liquids (NGLs) and oil (predominately condensate referred to herein as "oil") company engaged in the exploration, development and acquisition of natural gas and liquids properties in the Appalachian region of the United States.

Our objective is to build stockholder value through returns-focused development of our properties.

Range is a Delaware corporation with our common stock listed and traded on the New York Stock Exchange under the symbol "RRC."

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These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Annual Report on Form 10-K filed with the SEC on February 21, 2024.

The results of operations for first quarter ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year.

The results of operations for second quarter and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year.

We make certain reclassifications to the prior year statements to conform with the current year presentation.

2 unchanged sentences

Not Yet Adopted

There were no issued or pending accounting standards expected to have a material impact on our consolidated financial statements.

There were no issued or pending accounting standards in second quarter 2024 expected to have a material impact on our consolidated financial statements.

(4) REVENUES FROM CONTRACTS WITH CUSTOMERS

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We have three material revenue streams in our business:

natural gas sales, NGLs sales and condensate sales (referred to below as oil sales).

natural gas sales, NGLs sales and oil sales.

Brokered revenue attributable to each product sales type is included here because the volume of product that we purchase is subsequently sold to separate counterparties in accordance with existing sales contracts under which we also sell our production.

Other marketing revenue for the three months ended March 31, 2023 includes the receipt of a $ 3.6 million make-whole payment.

Accounts receivable attributable to our revenue contracts with customers was $ 161.3 million at March 31, 2024 and $ 263.9 million at December 31, 2023.

Other marketing revenue for the three months ended June 30, 2023 includes the receipt of a $ 1.5 million make-whole payment and the six months ended June 30, 2023 includes a total receipt of $ 5.1 million in make-whole payments.

Accounts receivable attributable to our revenue contracts with customers was $ 201.4 million at June 30, 2024 and $ 263.9 million at December 31, 2023 .

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

Three Months Ended

Six Months Ended

Natural gas sales

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Consequently, based upon the mix and timing of our actual earnings compared to annual projections, our effective tax rate may vary quarterly and may make comparisons not meaningful.

For the three months ended March 31, 2024 and 2023, our overall effective tax rate was different than the federal statutory rate due primarily to state income taxes, equity compensation and the limitation of executive compensation.

For the three and six months ended June 30, 2024 and 2023 , our overall effective tax rate was different than the federal statutory rate due primarily to state income taxes, tax credits, equity compensation and the limitation of executive compensation expense.

Current income taxes reflect estimated state and federal income taxes due for 2024 which is based on our estimated earnings, taking into account all applicable tax rates and laws.

4 unchanged sentences

Three Months Ended

Six Months Ended

Net income, as reported

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Net income per common share:

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

Restricted Stock Liability Awards represent participating securities because they participate in non-forfeitable dividends or distributions with common equity owners.

Income allocable to participating securities represents the distributed and undistributed earnings attributable to the participating securities.

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Three Months Ended

Six Months Ended

Weighted average common shares outstanding – basic

Effect of dilutive securities:

Director and employee restricted stock and performance

based equity awards

Director and employee restricted stock and performance based equity awards

Weighted average common shares outstanding – diluted

Weighted average common shares outstanding – basic for first quarter 2024 excludes 1.6 million shares of restricted stock held in our deferred compensation plan compared to 5.6 million shares in first quarter 2023 (although all awards are issued and outstanding upon grant).

For the three months ended March 31, 2024, equity grants of 127,000 shares compared to 4,000 shares in the same period of the prior year 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.

Weighted average common shares outstanding – basic for second quarter 2024 excludes 1.5 million shares of restricted stock held in our deferred compensation plan compared to 5.4 million shares in second quarter 2023 (although all awards are issued and outstanding upon grant).

Weighted average common shares outstanding – basic for first six months 2024 excludes 1.6 million shares of restricted stock held in our deferred compensation plan compared to 5.5 million shares for first six months 2023.

For the three months ended June 30, 2024 , equity grants of 17,000 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 computation.

For six months ended June 30, 2024 , equity grants of 9,000 shares were outstanding but not included in the computation of diluted net income because the shares would be anti-dilutive to the computation.

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

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(8) INDEBTEDNESS

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

No interest was capitalized during the three months ended March 31, 2024 or the year ended December 31, 2023 (in thousands).

We had the following debt outstanding as of the dates shown below (in thousands):

Senior notes:

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Unamortized debt issuance costs

Total debt, net of debt issuance costs

Total debt, net of deferred financing costs

Less current maturities of long-term debt (a)

Total long-term debt

(a) As of June 30, 2024 , current maturities include $ 621.1 million principal amount of our 4.875 % senior notes due 2025 ( $ 620.1 million net of deferred

financing costs).

No interest was capitalized during the six months ended June 30, 2024 or the year ended December 31, 2023.

In April 2022, we entered into an amended and restated revolving bank facility, which we refer to as our bank debt or our bank credit facility, which is secured by substantially all of our assets and has a maturity date of April 14, 2027 .

The bank credit facility provides for a maximum facility amount of $ 4.0 billion and an initial borrowing base of $ 3.0 billion.

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

As of March 31, 2024, our bank group was composed of seventeen financial institutions.

The bank credit facility also provides for a borrowing base subject to re-determinations, including event-driven unscheduled re-determinations.

As of June 30, 2024 , 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.

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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 part of the base rate loans to SOFR loans.

We had no outstanding balance on our credit facility during first quarter 2024.

The weighted average interest rate was 8.4 % for first quarter 2023.

We had no outstanding balance on our bank credit facility during first six months 2024 .

The weighted average interest rate was 8.4 % for first six months 2023 .

A commitment fee is paid on the undrawn balance based on an annual rate of 0.375 % to 0.50 %.

At March 31, 2024, the commitment fee was 0.375 % and the interest rate margin was 0.75 % on our ABR loans and 1.75 % on our SOFR loans.

As part of our redetermination completed in March 2024, our borrowing base was reaffirmed at $ 3.0 billion and our bank commitment was also reaffirmed at $ 1.5 billion.

On March 31, 2024, we had no outstanding borrowings on our bank credit facility.

At June 30, 2024 , the commitment fee was 0.375 % and the interest rate margin was 0.75 % on our ABR loans and 1.75 % on our SOFR loans.

As part of our re-determination completed in March 2024, our borrowing base was reaffirmed at $ 3.0 billion and our bank commitment was also reaffirmed at $ 1.5 billion.

On June 30, 2024 , we had no outstanding borrowings on our bank credit facility.

We had $ 169.2 million of undrawn letters of credit, leaving $ 1.3 billion of committed borrowing capacity available under the facility.

1 unchanged sentence

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.

We currently intend to retire our outstanding long-term debt as it matures, is callable or when market conditions are favorable to repurchase in the open market.

In first quarter 2024, we repurchased in the open market $ 15.1 million principal amount of our 4.875 % senior notes due 2025 at a discount.

We also repurchased an additional $ 4.3 million principal of our 4.875 % senior notes that was not settled until April 2024 and is included in accounts payable in the consolidated balance sheets.

We currently intend to retire our outstanding long-term debt as it matures, is callable or when market conditions are favorable to repurchase through privately negotiated transactions, open market repurchases, redemptions or otherwise.

During the six months ended June 30, 2024 , we repurchased in the open market $ 66.5 million principal amount of our 4.875 % senior notes due 2025 at a discount.

We also repurchased in the open market an additional $ 800,000 principal amount of our 4.875 % senior notes that was traded in June but not settled until July 2024 and is included in accounts payable in the consolidated balance sheets.

We recognized a gain on early extinguishment of debt for these transactions of $ 243,000 , net of remaining deferred financing costs on the repurchased debt.

Although we have no obligation to do so, we may continue, from time-to-time, to retire our outstanding debt through privately negotiated transactions, open market repurchases, redemptions or otherwise.

During the six months ended June 30, 2023 , we repurchased in the open market $ 61.6 million principal amount of our 4.875 % senior notes due 2025 at a discount.

We recognized a gain on early extinguishment of debt of $ 439,000 , net of the remaining deferred financing costs on the repurchased debt.

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

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

We were in compliance with applicable covenants under the bank credit facility at March 31, 2024.

We were in compliance with applicable covenants under the bank credit facility at June 30, 2024 .

(9) ASSET RETIREMENT OBLIGATIONS

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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, 2024 and the year ended December 31, 2023 is as follows (in thousands):

Three Months Ended

A reconciliation of our liability for plugging and abandonment costs for the six months ended June 30, 2024 and the year ended December 31, 2023 is as follows (in thousands):

Six Months Ended

June 30, 2024

December 31, 2023

Beginning of period

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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, fixed costs and investment 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 gain of $ 393.9 million at March 31, 2024.

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 oil or Mont Belvieu for NGLs, approximated a net gain of $ 241.7 million at June 30, 2024 .

These contracts expire monthly through December 2027.

The following table sets forth our commodity-based derivative volumes by year as of March 31, 2024, excluding our basis swaps which are discussed separately below:

The following table sets forth our commodity-based derivative volumes by year as of June 30, 2024, excluding our basis swaps which are discussed separately below:

Contract Type

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100,000 Mmbtu/day

Crude Oil (b)

30,000 Mmbtu/day

5,250 bbls/day

April - September 2024

July - September 2024

NGLs (C3-Propane)

6,500 bbls/day

We also sold natural gas swaptions of 40,000 Mmbtu/day for calendar year 2026 at a weighted average price of $ 4.11 /Mmbtu that expire June 2024 .

We also sold crude oil swaptions of 2,500 bbls/day for calendar year 2025 at a weighted average price of $ 80.00 /bbl that expire through September 2024 .

We also sold natural gas swaptions of 40,000 Mmbtu/day for calendar year 2026 at a weighted average price of $ 4.08 /Mmbtu that expire through October 2024 and 30,000 Mmbtu/day for calendar year 2027 at a weighted price of $ 4.10 /Mmbtu that expire in October 2024 .

We also sold oil swaptions of 2,000 bbls/day for calendar year 2025 at a weighted average price of $ 80.00 /bbl that expire in September 2024 .

Every derivative instrument is required to be recorded on the balance sheet as either an asset or a liability measured at its fair value.

1 unchanged sentence

Basis Swap Contracts

In addition to the commodity derivatives described above, at March 31, 2024, 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 commodity derivatives described above, at June 30, 2024 , 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 through December 2028 and include a total volume of 289,875,000 Mmbtu.

The fair value of these contracts was a loss of $ 27.0 million at March 31, 2024.

The fair value of these contracts was a gain of $ 13.9 million at June 30, 2024.

Derivative Assets and Liabilities

The combined fair value of derivatives included in the accompanying consolidated balance sheets as of March 31, 2024 and December 31, 2023 is summarized below.

The combined fair value of derivatives included in the accompanying consolidated balance sheets as of June 30, 2024 and December 31, 2023 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.

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Net amounts of (liabilities) presented in the consolidated balance sheets

Derivative Fair Value Income

The effects of our derivatives on our consolidated statements of income are summarized below (in thousands):

Three Months Ended

Derivative Fair Value Income

Six Months Ended

Commodity swaps

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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, 2024 using:

Fair Value Measurements at June 30, 2024 using:

Quoted Prices

Identical Assets

June 30, 2024

Trading securities held in the deferred compensation plan

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Identical Assets

December 31, 2023

Trading securities held in the deferred compensation plan

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However, the subjectivity in the volatility factors utilized can cause a significant change in the fair value measurement and is considered a significant unobservable input.

As of March 31, 2024, a portion of our natural gas and crude oil 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, 2024, a portion of our natural gas and oil 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.

At March 31, 2024, we used a weighted average implied volatility of 16 % for natural gas swaptions and 22 % for crude oil swaptions.

At June 30, 2024 , we used a weighted average implied volatility of 16 % for natural gas swaptions and 22 % for oil swaptions.

The following is a reconciliation of the beginning and ending balances for derivative instruments classified as Level 3 in the fair value hierarchy (in thousands):

Three Months Ended

March 31, 2024

Six Months Ended

Balance at December 31, 2023

Total gains included in earnings

Balance at March 31, 2024

Balance at June 30, 2024

Trading securities.

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Interest, dividends, and mark-to-market gains or losses are included in deferred compensation plan expense in the accompanying consolidated statements of income.

For first quarter 2024, interest and dividends were $ 195,000 and the mark-to-market adjustment was a gain of $ 4.2 million compared to interest and dividends of $ 179,000 and a mark-to-market gain of $ 3.1 million in first quarter 2023.

For second quarter 2024 , interest and dividends were $ 283,000 and the mark-to-market adjustment was a gain of $ 679,000 compared to interest and dividends of $ 435,000 and a mark-to-market gain of $ 2.6 million in second quarter 2023.

For first six months 2024 , interest and dividends were $ 478,000 and the mark-to-market adjustment was a gain of $ 4.9 million compared to interest and dividends of $ 614,000 and a mark-to-market gain of $ 5.7 million in first six months 2023.

Fair Values - Non-recurring

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Our proved natural gas and oil properties are reviewed for impairment periodically as events or changes in circumstances indicate the carrying amount may not be recoverable.

There were no proved property impairment charges in first quarter 2024 or 2023.

There were no proved property impairment charges in second quarter or first six months 2024 or 2023.

Fair Values – Reported

The following presents the carrying amounts and the fair values of our financial instruments as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

The following presents the carrying amounts and the fair values of our financial instruments as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

December 31, 2023

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Concentrations of Credit Risk

As of March 31, 2024, 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, 2024 , 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 uncollectible receivables was $ 308,000 at March 31, 2024 and $ 308,000 at December 31, 2023.

Our allowance for uncollectible receivables was $ 308,000 at June 30, 2024 and $ 308,000 at December 31, 2023.

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.

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We may also limit the level of exposure with any single counterparty.

At March 31, 2024, our derivative counterparties include fourteen financial institutions, of which eight are secured lenders in our bank credit facility.

At March 31, 2024, our net derivative asset includes an aggregate net receivable of $ 18.0 million from one counterparty not included in our bank credit facility and a payable to the remaining five counterparties of $ 10.5 million.

At June 30, 2024 , our derivative counterparties include fifteen financial institutions, of which ten are secured lenders in our bank credit facility.

At June 30, 2024 , our net derivative asset includes an aggregate net receivable of $ 2.5 million from three counterparties not included in our bank credit facility and a payable to the remaining two counterparties of $ 1.2 million.

Allowance for Expected Credit Losses.

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Three Months Ended

Six Months Ended

Direct operating expense

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The mark-to-market adjustment of the liability related to the vested restricted stock Liability Awards held in our deferred compensation plan is directly tied to the change in our stock price and not directly related to the functional expenses and, therefore, is not allocated to the functional categories above.

Stock-Based Awards

Restricted Stock Awards.

Restricted Stock – Equity Awards

We grant restricted stock units and restricted stock under our equity-based stock compensation plans to our employees, which we refer to as restricted stock Equity Awards.

The restricted stock units and restricted stock generally vest over a three-year period and are contingent on the recipient’s continued employment.

The restricted stock units and restricted stock generally vest over a three-year period and typically are contingent on the recipient’s continued employment.

The grant date fair value of the Equity Awards is based on the fair market value of our common stock on the date of grant.

In 2023, we began granting restricted stock (previously placed in our deferred compensation plan) that vests at the end of a three-year period for employee grants and at the end of a one-year period for non-employee directors.

Vesting is also based upon the employee's continued employment with us.

In 2023, we began granting restricted stock (previously placed in our deferred compensation plan) that vests at the end of a three-year period for certain officer grants and at the end of a one-year period for non-employee directors.

Vesting is also typically based upon the officer's continued employment with us.

Prior to vesting, recipients of restricted stock typically earn dividends payable in cash upon vesting but they have no voting rights prior to vesting.

Restricted stock Equity Awards are not issued until such time as they are vested and grantees receive the awards in stock.

We recorded compensation expense for these outstanding Equity Awards of $ 18.0 million in first six months 2024 compared to $ 15.3 million in the same period of 2023.

Restricted Stock – Liability Awards

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

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

Upon grant of these restricted shares, which we refer to as restricted stock Liability Awards, these shares are placed in our deferred compensation plan (see further discussion below) and, upon vesting, withdrawals are allowed in cash or in stock.

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

In 2023, the number of shares granted into our deferred compensation plan was reduced in favor of restricted stock Equity Awards.

All restricted stock Liability 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.

Prior to vesting, Liability Award recipients have the right to vote such stock and receive dividends thereon.

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

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

Prior to vesting, Liability Award recipients have the right to receive dividends thereon.

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

This mark-to-market amount is reported in deferred compensation plan expense in the accompanying consolidated statements of income.

We recorded compensation expense for these Liability Awards of $ 706,000 in first six months 2024 compared to $ 2.7 million in first six months 2023.

Stock-Based Performance Awards - (PSUs)

We have typically granted two types of performance share awards:

We have granted two types of performance share awards:

one based on performance conditions measured against internal performance metrics and one based on market conditions measured based on Range’s performance relative to a predetermined peer group (TSR Awards).

In first quarter 2024, only TSR Awards were granted.

In first six months 2024, only TSR Awards were granted.

Each unit granted represents one share of our common stock.

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The performance period is three years .

Restricted Stock – Equity Awards

In first three months 2024, we granted 1.2 million restricted stock Equity Awards to employees at an average grant date fair value of $ 30.23 compared to 1.6 million at an average grant date fair value of $ 25.01 in first three months 2023.

We recorded compensation expense for these outstanding awards of $ 9.7 million in first three months 2024 compared to $ 7.5 million in the same period of 2023.

Restricted stock Equity Awards are not issued until such time as they are vested and grantees do not have the option to receive cash.

Restricted Stock – Liability Awards

In first three months 2024, we granted 8,000 shares of restricted stock Liability Awards as compensation to employees at an average grant date fair value of $ 30.02 compared to 11,000 shares granted at an average grant date fair value of $ 24.70 for the same period 2023, with vesting generally at the end of a three-year period.

We recorded compensation expense for these Liability Awards of $ 460,000 in first three months 2024 compared to $ 1.8 million in first three months 2023.

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 income (see additional discussion below).

Stock-Based Performance Awards

Internal Performance Metric Awards.

These award s are expensed ratably over the service period and vest at the end of the three-year performance period.

These awards are expensed ratably over the service period and vest at the end of the three-year performance period.

The performance metrics are set by the Compensation Committee.

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.

In first three months 2023, we granted 81,000 awards.

We recorded compensation expense associated with the prior year grants of $ 477,000 in first three months 2024 compared to expense of $ 948,000 in first three months 2023.

These awards 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.

We recorded compensation expense associated with the prior year grants of $ 696,000 in first six months 2024 compared to expense of $ 1.4 million in first six months 2023.

These awards 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.

The fair value of the TSR Awards is estimated on the date of grant using a Monte Carlo simulation model which utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award.

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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 the TSR Awards granted during first three months 2024 and 2023:

Three Months Ended

We recorded compensation expense of $ 1.8 million in first six months 2024 compared to $ 886,000 in the same period of 2023 .

Fair value is amortized over the performance period with no adjustment to the expense recorded for actual targets achieved.

The following assumptions were used to estimate the fair value of the TSR Awards granted during first six months 2024 and 2023:

Six Months Ended

Risk-free interest rate

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Grant date fair value per unit

In first three months 2024, we granted 254,000 TSR Awards compared to 64,000 in the same period of the prior year.

We recorded compensation expense of $ 808,000 in first three months 2024 compared to $ 482,000 in the same period of 2023.

Fair value is amortized over the performance period with no adjustment to the expense recorded for actual targets achieved.

The following is a summary of the activity for our restricted stock and performance awards at March 31, 2024:

Equity and Liability Award Summary

The following is a summary of the activity for our restricted stock and performance awards for the six months ended June 30, 2024 and 2023:

Restricted Stock

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Outstanding at December 31, 2023

Outstanding at March 31, 2024

Outstanding at June 30, 2024

Outstanding at December 31, 2022

Outstanding at June 30, 2023

Amounts granted reflect performance units initially granted.

The actual payout will be between zero and 200 % depending on achievement of either total stockholder return ranking compared to our peers at the vesting date or on the achievement of internal performance targets.

The actual payout will be between zero and 200 % depending on achievement of either total stockholder return ranking compared to our peers over the performance period or on the achievement of internal performance targets.

Deferred Compensation Plan

Our deferred compensation plan gives non-employee directors and officers the ability to defer all or a portion of their salaries, bonuses or director fees and invest in Range common stock or make other investments at the individual’s discretion.

Range provides a partial matching contribution to officers which generally vests at the end of three years .

Range provides a partial matching contribution to participating officers which generally vests at the end of three years .

The assets of the plan are held in a grantor trust, which we refer to as the Rabbi Trust, and are therefore available to satisfy the claims of our general creditors in the event of bankruptcy or insolvency.

Our common stock held in the Rabbi Trust is treated as a liability award as employees are allowed to take withdrawals from the Rabbi Trust either in cash or in Range stock.

charge or credit to deferred compensation plan expense on our consolidated statements of income.

The liability for the vested portion of the stock held in the Rabbi Trust is reflected as deferred compensation liability in the accompanying consolidated balance sheets and is adjusted to fair value each reporting period by a charge or credit to deferred compensation plan expense on our consolidated statements of income.

The assets of the Rabbi Trust, other than our common stock, are invested in marketable securities and reported at their market value as other assets in the accompanying consolidated balance sheets.

The deferred compensation liability reflects the vested market value of the marketable securities and Range stock held in the Rabbi Trust.

The deferred compensation liability reflects the vested market value of the marketable

securities and Range stock held in the Rabbi Trust.

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 $ 6.4 million in first quarter 2024 compared to a mark-to-market loss of $ 9.4 million in first quarter 2023.

The Rabbi Trust held 1.5 million shares ( 1.4 million vested shares) of Range stock at March 31, 2024 compared to 1.6 million shares ( 1.5 million vested shares) at December 31, 2023.

We recorded a mark-to-market loss of $ 1.2 million in second quarter 2024 compared to a mark-to-market loss of $ 11.2 million in second quarter 2023 .

We recorded a mark-to-market loss of $ 7.6 million in first six months 2024 compared to a mark-to-market loss of $ 20.5 million in first six months 2023 .

The Rabbi Trust held 811,000 shares ( 758,000 vested shares) of Range stock at June 30, 2024 compared to 1.6 million shares ( 1.5 million vested shares) at December 31, 2023 .

(13) CAPITAL STOCK

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The following is a schedule of changes in the number of common shares outstanding since the beginning of 2023:

Three Months Ended

March 31, 2024

Six Months Ended

June 30, 2024

December 31, 2023

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In 2019, the board of directors approved a stock repurchase program which was increased in size in 2022.

At March 31, 2024, we had a remaining authorization to repurchase up to approximately $ 1.1 billion of our common stock.

At June 30, 2024 , we had a remaining authorization to repurchase up to approximately $ 1.1 billion of our common stock.

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.

Purchases under the program are made at our discretion and may change based upon market conditions.

In first three months 2024, we did no t repurchase any shares.

In second quarter 2024, we repurchased 304,871 shares at an aggregate cost of $ 10.2 million.

In addition, we repurchased $ 9.9 million ( 295,129 shares) that were traded in June and settled in July.

The following is a schedule of the change in treasury shares based on settlement date for the three and six months ended June 30, 2024:

Three Months Ended

June 30, 2024

Six Months Ended June 30, 2024

Beginning balance

Rabbi trust shares distributed/sold

Shares repurchased

Ending balance

(14) EXIT 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 2024, we recorded accretion expense of $ 10.3 million compared to $ 10.2 million in the same period of the prior year.

The estimated discounted divestiture contract obligation was $ 379.8 million at March 31, 2024.

In first six months 2024 , we recorded accretion expense of $ 20.3 million compared to $ 21.0 million in the same period of the prior year.

In first six months 2023, we also recorded a net adjustment of $ 39.8 million to increase the obligation for an increase in forecasted rates due to inflation.

We have recorded no adjustments to date in 2024.

The estimated discounted divestiture contract obligation was $ 368.8 million at June 30, 2024.

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, 2024 was $ 1.9 million.

The following summarizes our exit costs (including accretion of discount and any adjustments) for the three months ended March 31, 2024 and 2023 (in thousands):

The estimated remaining discounted obligation for these transportation capacity releases as of June 30, 2024 was $ 1.2 million.

The following summarizes our exit costs (including accretion of discount and any adjustments) for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended

Six Months Ended

Transportation contract capacity releases

Divestiture contract obligation

The following details the accrued exit cost liability activity for the three months ended March 31, 2024 (in thousands):

The following details the accrued exit cost liability activity for the six months ended June 30, 2024 (in thousands):

Exit Costs (a)

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Accretion of discount

Balance at March 31, 2024

Balance at June 30, 2024

(a) Includes the divestiture contract obligation and the transportation contract capacity release obligation.

(15) SUPPLEMENTAL CASH FLOW INFORMATION

Three Months Ended

Six Months Ended

(in thousands)

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(16) COMMITMENTS AND CONTINGENCIES

We are the subject of, or party to, a number of pending or threatened legal actions, administrative proceedings or investigations arising in the ordinary course of our business including, but not limited to, royalty claims, contract claims and environmental claims.

We are the subject of, or party to, various pending or threatened legal actions, administrative proceedings or investigations arising in the ordinary course of our business including, but not limited to, royalty claims, contract claims and environmental claims.

While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these actions, proceedings or claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future annual results of operations.

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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, 2024, liabilities for remediation were not material.

We are not aware of any environmental claims existing as of March 31, 2024 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, 2024, liabilities for remediation were not material.

We are not aware of any environmental claims existing as of June 30, 2024 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.

Lease Commitments

In first quarter 2024, our total remaining lease commitments increased by $ 130.4 million primarily due to additional completions and drilling equipment contracts that were effective during first quarter 2024.

These commitments will be paid over the contractual terms over the next two years .

Transportation, Gathering and Processing Contracts

In first quarter 2024, our transportation and gathering commitments increased by approximately $ 580.0 million over the next twelve years , primarily due to contract extensions and certain agreements that were contingent on facility construction as of the end of December 31, 2023 and are now in service.

In first quarter 2024, our transportation and gathering commitments over the next twelve years increased by approximately $ 580.0 million from December 31, 2023, primarily due to contract extensions and certain agreements that were contingent on facility construction as of the end of 2023 and are now in service.

There were no significant changes to firm transportation, gathering and processing minimum commitments in the second quarter 2024.

In addition to the above, during second quarter 2024 we entered into an amendment of an existing contract that will expand gathering, processing and transportation capacity by 300,000 Mmcf/day, contingent on the completion of construction and is expected to be in service in 2026.

We have a related contingent minimum commitment associated with the de-ethanization capacity.

Beginning on the in-service date this capacity will total 40,000 bbls/day, increasing by 5,000 bbls/day after one year of service, and continues through the end of the agreement.

( 17) SUSPENDED EXPLORATORY WELL COSTS

We capitalize exploratory well costs until a determination is made that the well has either found proved reserves or that it is impaired.

Capitalized exploratory well costs are presented in natural gas and oil properties in the accompanying consolidated balance sheets.

If an exploratory well is determined to be impaired, the well costs are charged to exploration expense in the accompanying consolidated statements of income.

There were no capitalized exploratory well costs in 2023.

The following table reflects the changes in capitalized exploratory well costs for the six months ended June 30, 2024 (in thousands):

Six Months Ended

June 30, 2024

Balance at beginning of period

Additions to capitalized exploratory well costs pending the determination of proved reserves

Reclassifications to wells, facilities and equipment based on determination of proved reserves

Capitalized exploratory well costs, charged to expense

Balance at end of period

Less exploratory well costs that have been capitalized for a period of one year or less

Capitalized exploratory well costs that have been capitalized for a period greater than one year

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

Three Months Ended

March 31, 2024

Six Months Ended

June 30, 2024

December 31, 2023

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Overview of Our Business

We are an independent natural gas, natural gas liquids (NGLs), crude oil and condensate company primarily engaged in the exploration, development and acquisition of natural gas properties in the Appalachian region of the United States.

We are an independent natural gas, natural gas liquids and oil company engaged in the exploration, development and acquisition of natural gas and liquids properties in the Appalachian region of the United States.

We operate in one segment and have a single company-wide management team that administers all properties as a whole rather than by discrete operating segments.

We measure financial performance as a single enterprise and not on a geographical or an area-by-area basis.

Our overarching business objective is to build stockholder value through returns-focused development of natural gas properties.

Our strategy to achieve our business objective is to generate consistent cash flows from reserves and production through internally generated drilling projects occasionally coupled with complementary acquisitions and divestitures of non-core or, at times, core assets.

Currently, our investment portfolio is focused on high-quality natural gas assets in the state of Pennsylvania.

Our revenues, profitability and future growth depend substantially on prevailing prices for natural gas, NGLs, crude oil and condensate and on our ability to economically find, develop, acquire and produce these reserves.

Our overarching business objective is to build stockholder value through returns-focused development of properties.

Currently, our investment portfolio is focused on high-quality natural gas assets in the Commonwealth of Pennsylvania.

Our revenues, profitability and future growth depend substantially on prevailing prices for natural gas, NGLs and oil and on our ability to economically find, develop, acquire and produce these reserves.

Commodity prices have been and are expected to remain volatile.

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• managing our balance sheet.

Prices for natural gas, NGLs, crude oil and condensate fluctuate widely and affect:

Prices for natural gas, NGLs and oil fluctuate widely and affect:

• our revenues, profitability and cash flow;

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• the amount of cash flow available to us for reinvestment;

• our ability to borrow and raise additional capital.

• our ability to borrow and raise additional capital, if needed.

We prepare our financial statements in conformity with U.S.

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We believe we are positioned for sustainable long-term success.

We continue to monitor the impact of the actions of OPEC and other large producing nations, the Russia-Ukraine conflict, hostilities in the Middle East, global inventories of oil and gas, future monetary fiscal policy and governmental policies aimed at transitioning towards lower carbon energy, and we expect prices for some or all of the commodities we produce to remain volatile given the complex dynamics of supply and demand that exist in the global market.

In first quarter 2024, natural gas prices declined primarily due to mild winter weather.

Longer term natural gas futures prices have remained stronger 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, moderated reinvestment rates and core inventory exhaustion.

We continue to monitor the impact of the actions of OPEC and other large hydrocarbon producing nations, the Russia-Ukraine conflict, hostilities in the Middle East, global inventories of oil and gas, future monetary and fiscal policy and governmental policies aimed at transitioning towards lower carbon energy, and we expect prices for some or all of the commodities we produce to remain volatile given the complex dynamics of supply and demand that exist in the global energy markets.

In first quarter 2024, natural gas prices declined primarily due to mild winter weather, but prices partially recovered in late second quarter 2024 based on signs of lower industry well completion activity and supply declines.

Longer term natural gas futures prices remain stronger 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, moderated reinvestment rates and core inventory exhaustion.

In addition, the global energy crisis experienced in recent years further highlighted the low cost and low emissions shale gas resource base in North America, supporting continued strong structural demand growth for United States liquefied natural gas exports, domestic industrial gas demand and power generation to support anticipated data center demand growth.

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Commodity prices have remained volatile.

Benchmarks for natural gas and NGLs decreased in the first three months of 2024 compared to the same period of 2023.

As a result, we experienced decreases in our price realizations.

Despite overall lower prices, we continue to focus on creating long-term value for our stockholders along with positioning ourselves to be a responsible and reliable supplier of 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, 2024 and 2023:

Benchmarks for natural gas decreased in second quarter 2024 and first six months 2024 compared to the same periods of 2023.

Benchmarks for NGLs increased in second quarter 2024 compared to the same period of 2023 and remained flat for the first six months 2024 compared to 2023.

As a result, we experienced increases in our price realizations for the quarter ended June 30, 2024.

Despite overall year to date lower prices, we continue to focus on creating long-term value for our stockholders along with positioning ourselves to be a responsible and reliable supplier of natural gas and NGLs.

The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

Average NYMEX prices (a)

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Consolidated Results of Operations

Overview of First Quarter 2024 Results

During first quarter 2024, we recognized net income of $92.1 million, or $0.38 per diluted common share compared to net income of $481.4 million, or $1.95 per diluted common share during first quarter 2023.

The lower net income in first quarter 2024 compared to first quarter 2023 is primarily due to lower realized prices.

For first quarter 2024, we experienced a decrease in revenue from the sale of natural gas, NGLs and oil due to a 19% decrease in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) when compared to the same quarter of 2023.

Daily production averaged 2.1 Bcfe in both the first quarter 2024 and 2023.

Our first quarter 2024 financial and operating performance included the following results:

Overview of Second Quarter 2024 Results

During second quarter 2024, we recognized net income of $28.7 million, or $0.12 per diluted common share compared to net income of $30.2 million, or $0.12 per diluted common share during second quarter 2023.

The lower net income in second quarter 2024 compared to second quarter 2023 is primarily due to lower derivative fair value income (non-cash fair value adjustment related to our derivatives), slightly offset by higher realized prices.

For second quarter 2024, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 14% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) when compared to the same quarter of 2023, combined with a slight increase of production.

Daily production averaged 2.2 Bcfe in second quarter 2024 and 2.1 Bcfe in the same period of 2023.

Our second quarter 2024 financial and operating performance included the following results:

• revenue from the sale of natural gas, NGLs and oil increased 2% from the same period of 2023 due to a 3% increase in production volumes, partially offset by a 1% decrease in average realized prices (before cash settlements on our derivatives);

• revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 11% from the same period of 2023;

• direct operating expense per mcfe was $0.12 in second quarter 2024 compared to $0.13 in the same period of 2023 primarily due to lower water hauling costs, lower workovers and lower equipment costs;

• transportation, gathering, processing and compression per mcfe was $1.44 in second quarter 2024 compared to $1.42 in the same period of 2023, primarily due to an increase in fixed gathering and transportation costs;

• general and administrative expense increased 2% from the same period of 2023 primarily due to aggregate impacts of cost inflation;

• interest expense decreased 5% from the same period of 2023 due to lower debt balances.

Second quarter 2024 also included the following highlights to enhance our balance sheet, return capital to investors and preserve liquidity:

• paid $19.5 million of dividends, or $0.08 per share;

• repurchased $20.1 million of our common stock, of which $10.2 million settled during the quarter;

• repurchased in the open market $47.1 million face value of our 4.875% senior notes due 2025 at a discount;

• maintained substantial liquidity with the accumulation of cash on hand of $251.1 million along with $1.3 billion available under our credit facility.

We generated $148.8 million of cash from operating activities in second quarter 2024, an increase of $22.2 million from second quarter 2023, which reflects the impact of higher realized prices.

Overview of First Six Months 2024 Results

During first six months 2024, we recognized net income of $120.8 million, or $0.49 per diluted common share compared to net income of $511.7 million, or $2.07 per diluted common share during the same period of 2023.

The lower net income in first six months 2024 compared to the same period of 2023 is primarily due to lower derivative fair value income (non-cash fair value adjustment related to our derivatives) combined with lower realized prices.

For first six months 2024, we experienced a decrease in revenue from the sale of natural gas, NGLs and oil due to a 7% decrease in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) when compared to the same period of 2023.

Daily production averaged 2.1 Bcfe in both the six months ended June 30, 2024 and 2023.

Our first six months 2024 financial and operating performance included the following results:

• revenue from the sale of natural gas, NGLs and oil decreased 13% from the same period of 2023 with a 15% decrease in average realized prices (before cash settlements on our derivatives) slightly offset by higher production volumes;

• revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) decreased 2% from the same period of 2023;

• direct operating expense per mcfe was $0.11 in first quarter 2024 compared to $0.14 in the same period of 2023 primarily due to lower workover costs along with lower water handling/hauling costs;

• transportation, gathering, processing and compression per mcfe was $1.49 in first quarter 2024 compared to $1.48 in the same period of 2023 primarily due to an increase in processed NGL volumes slightly offset by lower fuel costs;

• general and administrative expense increased 2% from same period of 2023;

• direct operating expense per mcfe was $0.11 in first six months 2024 compared to $0.13 in the same period of 2023 primarily due to lower workover costs along with lower water hauling costs;

• transportation, gathering, processing and compression per mcfe was $1.47 in first six months 2024 compared to $1.45 in the same period of 2023 primarily due to an increase in fixed gathering and transportation costs;

• general and administrative expense increased 2% from the same period of 2023 primarily due to aggregate impacts of cost inflation;

• interest expense decreased 5% from the same period of 2023 due to lower debt balances.

First quarter 2024 also included the following highlights to enhance our balance sheet, return capital to investors and preserve liquidity:

First six months 2024 also included the following highlights to enhance our balance sheet, return capital to investors and preserve liquidity:

• paid $38.9 million of dividends, or $0.16 per share;

• repurchased $20.1 million of our common stock, of which $10.2 million settled during the first six months;

• repurchased in the open market $66.5 million face value of our 4.875% senior notes due 2025 at a discount;

• enhanced liquidity with the accumulation of cash on hand of $343.1 million along with $1.3 billion available under our credit facility.

We generated $331.9 million of cash from operating activities in first quarter 2024, a decrease of $143.0 million from first quarter 2023, which reflects the impact of lower realized prices.

• maintained substantial liquidity with the accumulation of cash on hand of $251.1 million along with $1.3 billion available under our credit facility.

We generated $480.7 million of cash from operating activities in first six months 2024, a decrease of $120.8 million from first six months 2023, which reflects the impact of lower working capital and lower realized prices.

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 2024, natural gas, NGLs and oil sales decreased 23% compared to first quarter 2023 with a 24% decrease in average realized prices (before cash settlements on our derivatives).

The following table illustrates the primary components of natural gas, NGLs and oil sales for the three months ended March 31, 2024 and 2023 (in thousands):

The following table illustrates the primary components of natural gas, NGLs and oil sales for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended

Six Months Ended

Natural gas, NGLs and oil sales

Oil and condensate

Total natural gas, NGLs and oil sales

Production is maintained by drilling success as we place new wells on production which is partially offset by the natural decline of our natural gas and oil reserves through production.

Our production for the three months ended March 31, 2024 and 2023 is set forth in the following table:

Production is maintained through drilling success as new wells are placed on production, which is partially offset by the natural decline in production through existing wells.

Our production for the three and six months ended June 30, 2024 and 2023 is set forth in the following table:

Three Months Ended

Six Months Ended

Production (a)

Natural gas (mcf)

Oil and condensate (bbls)

Total (mcfe) (b)

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Natural gas (mcf)

Oil and condensate (bbls)

Total (mcfe) (b)

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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 2024 was $2.05 per mcfe compared to $2.52 per mcfe in first quarter 2023.

Our average realized price received (including all derivative settlements and third-party transportation costs) during second quarter 2024 was $1.66 per mcfe compared to $1.46 per mcfe in second quarter 2023.

Our average realized price received (including all derivative settlements and third-party transportation costs) during first six months 2024 was $1.85 per mcfe compared to $1.99 per mcfe in first six months 2023.

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 (including derivative settlements) do include transportation costs where we receive net revenue proceeds from purchasers.

Average realized price calculations for three months ended March 31, 2024 and 2023 are shown below:

Average realized price calculations for three and six months ended June 30, 2024 and 2023 are shown below:

Three Months Ended

Six Months Ended

Average Prices

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NGLs (per bbl)

Oil and condensate (per bbl)

Oil (per bbl)

Total (per mcfe) (a)

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NGLs (per bbl)

Oil and condensate (per bbl)

Oil (per bbl)

Total (per mcfe) (a)

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NGLs (per bbl)

Oil and condensate (per bbl)

Oil (per bbl)

Total (per mcfe) (a)

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Three Months Ended

Six Months Ended

Average natural gas differentials below NYMEX

Realized gains on basis hedging

Realized (losses) gains on basis hedging

The following tables reflect our production and average sales 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

Oil and condensate

Six Months Ended

Price (per bbl)

Production (Mbbls)

Oil and condensate

Three Months Ended

Six Months Ended

Price (per mcfe)

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Total natural gas, NGLs and oil sales

Transportation, gathering, processing and compression expense was $290.9 million in first quarter 2024 compared to $285.5 million in first quarter 2023.

These third-party costs are higher in first quarter 2024 when compared to first quarter 2023 primarily due to higher processing costs resulting from an increase in NGL volumes processed partially offset by lower fuel cost.

Transportation, gathering, processing and compression expense was $281.5 million in second quarter 2024 compared to $268.2 million in second quarter 2023.

These third-party costs are higher in second quarter 2024 when compared to second quarter 2023 primarily due to higher fixed gathering and transportation costs, higher electricity costs and the impact of higher NGLs prices which result in higher processing costs.

Transportation, gathering, processing and compression expense was $572.4 million in first six months 2024 compared to $553.7 million in the same period of the prior year.

These third-party costs are higher in first six months 2024 when compared to the same period of 2023 due to higher fixed gathering and transportation costs and higher electricity costs, slightly offset by lower 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, 2024 and 2023 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, 2024 and 2023 on a per mcf and per barrel basis (in thousands, except for costs per unit):

Three Months Ended

Transportation, gathering, processing and compression

Six Months Ended

Transportation, gathering

processing and compression

Natural gas (per mcf)

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Oil (per bbl)

Derivative fair value income was income of $46.6 million in first quarter 2024 compared to income of $368.0 million in first quarter 2023.

Derivative fair value income was income of $16.8 million in second quarter 2024 compared to income of $123.7 million in second quarter 2023.

Derivative fair value income was $63.4 million in first six months 2024 compared to income of $491.7 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 the three months ended March 31, 2024 and 2023 (in thousands):

The following table summarizes the impact of our commodity derivatives for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended

Six Months Ended

Derivative fair value income per consolidated statements of income

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Natural gas derivatives

Oil derivatives

NGLs derivatives

Oil derivatives

Divestiture contingent consideration

Total non-cash fair value (loss) income (a)

Total non-cash fair value (loss) income ⁽ᵃ⁾

Net cash receipt (payment) on derivative settlements:

Natural gas derivatives

Oil derivatives

NGLs derivatives

Oil derivatives

Total net cash receipt

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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 2024 was $31.8 million compared to $82.1 million in first quarter 2023 which is the result of lower broker sales prices and lower broker sales volumes (volumes not related to our production).

Brokered natural gas, marketing and other revenue in second quarter 2024 was $34.8 million compared to $44.9 million in second quarter 2023, which is the result of lower broker sales volumes (volumes not related to our production) slightly offset by higher broker sales prices.

We continue to optimize our transportation portfolio using these volumes.

Such revenue in first quarter 2024 also includes the receipt of $2.9 million of interest income compared to $1.0 million in the same period of the prior year.

Other marketing revenue for first quarter 2023 includes the receipt of a $3.6 million make-whole payment.

Other revenue in second quarter 2024 also includes $3.4 million of interest income compared to $1.8 million in the same period of the prior year.

Other marketing revenue for second quarter 2023 includes the receipt of a $1.5 million make-whole payment.

Brokered natural gas, marketing and other revenue was $66.6 million in first six months 2024 compared to $127.0 million in first six months 2023, which is the result of lower broker sales prices combined with lower broker sales volumes.

Such revenue in first six months 2024 also includes the receipt of $6.3 million of interest income compared to $2.7 million in the same period of the prior year.

The six months ended June 30, 2023 also includes $5.1 million in make-whole payments.

See also Brokered natural gas and marketing expense below for more information on our net brokered margin.

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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, 2024 and 2023:

The following table presents information about certain of our expenses on a per mcfe basis for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

Direct operating expense

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Depletion, depreciation and amortization expense

Direct operating expense was $22.2 million in first quarter 2024 compared to $27.0 million in first quarter 2023.

Direct operating expense was $22.8 million in second quarter 2024 compared to $23.9 million in second quarter 2023.

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

Our direct operating costs decreased in first quarter 2024 primarily due to lower workover and lower water handling/hauling costs.

We incurred $869,000 of workover costs in first quarter 2024 compared to $2.9 million in first quarter 2023.

The following table summarizes direct operating expense per mcfe for the three months ended March 31, 2024 and 2023:

Our direct operating costs decreased in second quarter 2024 primarily due to lower water hauling costs, lower workover costs and lower equipment costs.

We incurred $644,000 of workover costs in second quarter 2024 compared to $784,000 in second quarter 2023.

Direct operating expense was $44.9 million in first six months 2024 compared to $50.9 million in the same period of the prior year.

Our direct operating costs decreased in first six months 2024 when compared to the same period of the prior year due to lower workover costs, lower water hauling costs and lower contract labor and services.

We incurred $1.5 million of workover costs in first six months 2024 compared to $3.7 million of workover costs in first six months 2023.

These costs are expected to enhance production from existing wells.

The following table summarizes direct operating expense per mcfe for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

Direct operating

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In 2012, the Commonwealth of Pennsylvania enacted an "impact fee" which functions as a tax on unconventional natural gas and oil production from the Marcellus Shale in Pennsylvania.

This impact fee was $5.7 million in first quarter 2024 compared to $6.8 million in first quarter 2023.

This impact fee was $4.6 million in second quarter 2024 compared to $6.7 million in second quarter 2023.

This impact fee was $10.4 million in first six months 2024 compared to $13.5 million in first six months 2023, which reflects lower natural gas prices.

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

This category also includes franchise, real estate and other applicable taxes.

First quarter 2024 includes the refund of $618,000 associated with state commercial activity taxes.

The following table summarizes taxes other than income per mcfe for the three months ended March 31, 2024 and 2023:

First six months 2024 includes a refund of $618,000 associated with state commercial activity taxes.

The following table summarizes taxes other than income per mcfe for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

Taxes other than income

Total taxes other than income

General and administrative (G&A) expense was $43.9 million in first quarter 2024 compared to $43.1 million in first quarter 2023.

The first quarter 2024 increase of $795,000 when compared to the same period of 2023 is primarily due to aggregate impacts of cost inflation.

The following table summarizes G&A expenses on a per mcfe basis for the three months ended March 31, 2024 and 2023:

General and administrative (G&A) expense was $40.1 million in second quarter 2024 compared to $39.5 million in second quarter 2023.

The second quarter 2024 increase of $615,000 when compared to the same period of 2023 is primarily due to aggregate impacts of cost inflation.

G&A expense for first six months 2024 was $84.1 million compared to $82.7 million in the same period of 2023.

The increase of $1.4 million is primarily due to aggregate impacts of cost inflation.

The following table summarizes G&A expenses on a per mcfe basis for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

General and administrative

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Stock-based compensation

Total general and administrative expense

Interest expense was $30.5 million in first quarter 2024 compared to $32.2 million in first quarter 2023.

The following table presents information about interest expense per mcfe for the three months ended March 31, 2024 and 2023:

Total general and administrative

Interest expense was $29.7 million in second quarter 2024 compared to $31.1 million in second quarter 2023.

Interest expense was $60.2 million in first six months 2024 compared to $63.3 million in first six months 2023.

The following table presents information about interest expense per mcfe for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Bank credit facility

Amortization of deferred financing costs and other

Six Months Ended

Bank credit facility (a)

Amortization of deferred financing

costs and other

Total interest expense

Average debt outstanding ($000s)

Average interest rate (a)

Includes commitment fees but excludes debt issuance costs.

The decrease in interest expense for first quarter 2024 from the same period of 2023 was primarily due to lower average outstanding debt balances and a slightly lower average interest rate.

We had no debt outstanding on the bank credit facility for first quarter 2024 compared to $32.0 million in first quarter 2023 and the weighted average interest rate on the bank credit facility was 8.4% in first quarter 2023.

Depletion, depreciation and amortization expense was $87.1 million in first quarter 2024 compared to $86.6 million in first quarter 2023.

Average interest rate (b)

Includes commitment fees.

Excludes deferred financing costs.

The decrease in interest expense for second quarter 2024 from the same period of 2023 was primarily due to lower average outstanding debt balances.

We had no debt outstanding on the bank credit facility for second quarter 2024 or the same period 2023.

The decrease in interest expense for first six months 2024 from the same period of 2023 was primarily due to lower average outstanding debt balances.

We had no debt outstanding on the bank credit facility for first six months 2024 compared to a $16.0 million average debt balance for first six months 2023 and the weighted average interest rate on the credit facility was 8.4% in first six months 2023.

Depletion, depreciation and amortization (DD&A) expense was $87.6 million in second quarter 2024 compared to $85.0 million in second quarter 2023.

This increase is due to slightly higher production volumes.

Depletion expense, the largest component of DD&A expense, was $0.44 per mcfe in first quarter 2024 and first quarter 2023.

Depletion expense, the largest component of DD&A expense, was $0.44 per mcfe in second quarter 2024 compared to $0.44 per mcfe in second quarter 2023.

DD&A expense was $174.7 million in first six months 2024 compared to $171.6 million in the same period of 2023.

This increase is due to a slight increase in production volumes.

Depletion expense was $0.44 per mcfe in first six months 2024 compared to $0.44 in the same period of 2023.

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, 2024 and 2023:

The following table summarizes DD&A expense per mcfe for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

Depletion and amortization

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Our total operating expenses also include other expenses that generally do not trend with production.

These expenses include stock-based compensation, brokered natural gas and marketing expense, exploration expense, abandonment and impairment of unproved properties, exit costs, deferred compensation plan expense and gain or loss on early extinguishment of debt.

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

The following table details the allocation of stock-based compensation to functional expense categories for the three months ended March 31, 2024 and 2023 (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, 2024 and 2023 (in thousands):

Three Months Ended

Six Months Ended

Direct operating expense

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General and administrative expense

Total stock-based compensation

Brokered natural gas and marketing expense was $31.6 million in first quarter 2024 compared to $67.1 million in first quarter 2023 due to lower commodity prices and 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, 2024 and 2023 (in thousands):

Total stock-based compensation expense

Brokered natural gas and marketing expense was $34.1 million in second quarter 2024 compared to $44.8 million in second quarter 2023 due to lower broker purchase volumes (volumes not related to our production) slightly offset by higher commodity prices.

Brokered natural gas and marketing expense was $65.7 million in first six months 2024 compared to $111.9 million in first six months 2023 due to lower commodity prices and lower broker purchase volumes.

The following table details our brokered natural gas, marketing and other net margin for the three and six months ended June 30, 2024 and 2023(in thousands):

Three Months Ended

Six Months Ended

Brokered natural gas and marketing

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Other marketing expense

Net brokered natural gas and marketing margin

Exploration expense was $4.5 million in first quarter 2024 compared to $4.6 million in first quarter 2023.

The following table details our exploration expense for the three months ended March 31, 2024 and 2023 (in thousands):

Net brokered natural gas, marketing and other net margin

Exploration expense was $6.7 million in second quarter 2024 compared to $7.4 million in second quarter 2023 due to lower seismic costs.

Exploration expense was $11.2 million in first six months 2024 compared to $12.1 million in first six months 2023 due to lower seismic costs slightly offset by higher delay rentals.

The following table details our exploration expense for the three and six months ended June 30, 2024 and 2023 (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 expense was $2.4 million in first quarter 2024 compared to $7.5 million in first quarter 2023.

Abandonment and impairment of unproved properties for first quarter 2024 decreased when compared to the same period of 2023 due to lower expected lease expirations in Pennsylvania.

Abandonment and impairment of unproved properties expense was $1.5 million in second quarter 2024 compared to $25.8 million in second quarter 2023.

Abandonment and impairment of unproved properties was $3.9 million in first six months 2024 compared to $33.3 million in the same period of 2023.

Abandonment and impairment of unproved properties for second quarter 2024 and first six months 2024 decreased when compared to the same periods of 2023 due to lower expected lease expirations in Pennsylvania.

When we do not intend to drill on a property prior to expiration, we have allowed acreage to expire and we expect to allow acreage to expire in the future.

However, we also believe acreage needed for our future development plans can be leased again.

Exit costs were $10.3 million in first quarter 2024 compared to $12.3 million in first quarter 2023.

In first quarter 2024, we recorded $10.3 million accretion expense primarily related to retained liabilities for certain gathering, transportation and processing obligations extending until 2030 compared to accretion expense of $10.3 million in the same quarter of the prior year.

First quarter 2023 also included a $2.0 million adjustment for the difference between estimated and actual payments.

Deferred compensation plan expense was a loss of $6.4 million in first quarter 2024 compared to a loss of $9.4 million in first quarter 2023.

Exit costs were $10.1 million in second quarter 2024 compared to $48.7 million in second quarter 2023.

In second quarter 2024, we recorded $10.1 million accretion expense primarily related to retained liabilities for certain gathering, transportation and processing obligations extending through 2030 compared to accretion expense of $10.9 million in the same quarter of the prior year.

Second quarter 2023 also included an adjustment of $37.8 million to increase this obligation primarily due to an increase in forecasted rates due to inflation.

Exit costs were $20.4 million in first six months 2024 compared to $61.0 million in first six months 2023.

We recorded accretion expense of $20.4 million in first six months 2024 compared to accretion expense of $21.2 million in the same period of 2023.

The first six months 2023 includes an adjustment of $39.8 million to increase this obligation primarily for an increase in forecasted rates due to inflation.

There have been no adjustments made in 2024.

Deferred compensation plan expense was a loss of $1.2 million in second quarter 2024 compared to a loss of $11.2 million in second quarter 2023.

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 $30.44 at December 31, 2023 to $34.43 at March 31, 2024.

In the same period of the prior year our stock price increased from $25.02 at December 31, 2022 to $26.47 at March 31, 2023.

Income tax expense was an expense of $18.2 million in first quarter 2024 compared to an expense of $121.9 million in first quarter 2023.

The 2024 and 2023 effective tax rates were different than the statutory tax rates due to state income taxes, equity compensation and the limitation of our executive compensation.

Our stock price decreased from $34.43 at March 31, 2024 to $33.53 at June 30, 2024.

In the same period of the prior year our stock price increased from $26.47 at March 31, 2023 to $29.40 at June 30, 2023.

During first six months 2024, deferred compensation plan expense was a loss of $7.6 million compared to a loss of $20.5 million in the same period of 2023.

Our stock price increased from $30.44 at December 31, 2023 to $33.53 at June 30, 2024.

In the same period of the prior year, our stock price increased from $25.02 at December 31, 2022 to $29.40 at June 30, 2023.

Income tax (benefit) expense was a benefit of $18.7 million in second quarter 2024 compared to an expense of $14.7 million in second quarter 2023.

Income tax benefit was $490,000 in first six months 2024 compared to an expense of $136.6 million in the same period of 2023.

The 2024 and 2023 effective tax rates were different than the statutory tax rates due to state income taxes, tax credits, equity compensation and the limitation of our executive compensation expense.

Management’s Discussion and Analysis of Financial Condition, Capital Resources and Liquidity

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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.

The following table presents sources and uses of cash and cash equivalents for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended

The following table presents sources and uses of cash and cash equivalents for the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended

Sources of cash and cash equivalents

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Repayment of senior notes

Purchases of treasury stock

Treasury stock purchases

Dividends paid

1 unchanged sentence

Sources of Cash and Cash Equivalents

Cash flows provided from operating activities in first three months 2024 was $331.9 million compared to $475.0 million in first three months 2023.

Cash flows provided from operating activities in first six months 2024 was $480.7 million compared to $601.5 million in first six months 2023.

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 decrease in cash provided from operating activities from first three months 2023 to first three months 2024 reflects lower realized prices.

As of March 31, 2024, we have hedged more than 50% of our projected natural gas production for the remainder of 2024.

Changes in working capital (as reflected in our consolidated statements of cash flows) for first three months 2024 was a positive $28.3 million compared to a positive $79.7 million for first three months 2023.

The decrease in cash provided from operating activities from first six months 2023 to first six months 2024 reflects lower working capital and lower realized prices.

As of June 30, 2024, we have hedged more than 50% of our projected natural gas production for the remainder of 2024.

Changes in working capital (as reflected in our consolidated statements of cash flows) for first six months 2024 was a negative $53.0 million compared to a positive $27.4 million for first six months 2023.

Uses of Cash and Cash Equivalents

Additions to natural gas properties for first three months 2024 were consistent with expectations relative to our announced 2024 capital budget.

Repayment of senior notes for first three months 2024 include the repurchase and settlement of $15.1 million principal amount of our 4.875% senior notes due 2025 at a discount.

Additions to natural gas properties for first six months 2024 were consistent with expectations relative to our announced 2024 capital budget.

Repayment of senior notes for first six months 2024 includes the repurchase and settlement of $66.5 million principal amount of our 4.875% senior notes due 2025 at a discount.

Treasury stock purchases for first six months 2024 include the repurchase and settlement of 305,000 shares for a total of $10.2 million as part of our previously announced stock repurchase program.

Liquidity and Capital Resources

Our main sources of liquidity are cash, internally generated cash flow from operations, capital market transactions and our bank credit facility.

At March 31, 2024, we had approximately $1.6 billion of liquidity consisting of $343.1 million of cash on hand and $1.3 billion of availability under our bank credit facility.

At June 30, 2024, we had approximately $1.6 billion of liquidity consisting of $251.1 million of cash on hand and $1.3 billion of availability under our bank credit facility.

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

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We expect our 2024 capital program to be funded by cash flows from operations.

During the three months ended March 31, 2024, we generated $331.9 million of cash flows from operating activities.

During the six months ended June 30, 2024, we generated $480.7 million of cash flows from operating activities.

Bank Credit Facility

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

As of March 31, 2024, 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 $1.5 billion.

We have undrawn letters of credit of $173.4 million as of March 31, 2024, which reduce our borrowing capacity under our bank credit facility.

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

Our scheduled borrowing base redetermination was completed in March 2024 with our borrowing base and lender commitments reaffirmed.

We currently must comply with certain financial and non-financial covenants, including limiting dividend payments, debt incurrence and requirements that maintain certain financial ratios (as defined in our bank credit agreement).

We were in compliance with all such covenants at March 31, 2024.

As of June 30, 2024, 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 $1.5 billion.

We have undrawn letters of credit of $169.2 million as of June 30, 2024, which reduce our borrowing capacity under our bank credit facility.

The borrowing base is subject to regular, semi-annual re-determinations and is dependent on a number of factors but primarily the lenders' assessment of our future cash flows.

Our scheduled borrowing base re-determination was completed in March 2024 with our borrowing base and lender commitments reaffirmed.

We currently must comply with certain financial and non-financial covenants, including limiting dividend payments, debt incurrence and requirements that we maintain certain financial ratios (as defined in our bank credit facility agreement).

We were in compliance with all such covenants at June 30, 2024.

Capital Requirements

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

During first three months 2024, we used operating cash flows to fund $155.6 million of capital expenditures as reported in our consolidated statement of cash flows within investing activities.

During first six months 2024, we used operating cash flows to fund $322.2 million of capital expenditures as reported in our consolidated statement of cash flows within investing activities.

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.

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The amounts involved may be material.

Our next significant long-term debt maturity is in the amount of $669.0 million due 2025.

Our next significant long-term debt maturity is in the principal amount of $621.1 million due 2025, and is therefore classified as current on the balance sheet.

As part of our strategy for 2024, we plan to maintain or improve our financial strength.

Cash Dividend Payments

On March 1, 2024, our board of directors approved a dividend of $0.08 per share payable on March 29, 2024 to stockholders of record at the close of business on March 15, 2024.

On May 31, 2024, our board of directors approved a dividend of $0.08 per share payable on June 28, 2024 to stockholders of record at the close of business on June 14, 2024.

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.

Stock Repurchase Program

Our total remaining share repurchase authorization was approximately $1.1 billion at March 31, 2024.

Our total remaining share repurchase authorization was approximately $1.1 billion at June 30, 2024.

Other Sources of Liquidity

2 unchanged sentences

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, 2024, 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.

In first quarter 2024, our transportation and gathering commitments increased by approximately $580.0 million over the next twelve years primarily due to contract extensions and certain agreements that were contingent on facility construction as of the end of December 31, 2023 and are now in service.

In first quarter 2024, our total remaining operating lease commitments increased by $130.4 million primarily due to additional completions and drilling equipment contracts that were effective during first quarter 2024.

These commitments will be paid over the contractual terms over the next two years.

Since December 31, 2023, there have been no material changes to our other contractual obligations.

See Note 16 to our unaudited consolidated financial statements entitled "Commitments and Contingencies" for more information on commitments.

Interest Rates

At March 31, 2024, we had approximately $1.8 billion of debt outstanding which bore interest at fixed rates averaging 6.0%.

We had no variable rate debt outstanding at March 31, 2024.

At June 30, 2024, we had approximately $1.7 billion of debt outstanding which bore interest at fixed rates averaging 6.0%.

We had no variable rate debt outstanding at June 30, 2024.

Off-Balance Sheet Arrangements

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Natural gas and oil prices have been volatile and unpredictable for many years.

Changes in natural gas prices affect us more than changes in oil prices because approximately 64% of our December 31, 2023 proved reserves are natural gas and 2% of proved reserves are oil and condensate.

Changes in natural gas prices affect us more than changes in oil prices because approximately 64% of our December 31, 2023 proved reserves are natural gas and 2% of proved reserves are oil.

In addition, a portion of our NGLs, which are 34% of proved reserves, are also impacted by changes in oil prices.

At times, we are also exposed to market risks related to changes in interest rates.

These risks did not change materially from December 31, 2023 to March 31, 2024.

These risks did not change materially from December 31, 2023 to June 30, 2024.

Commodity Price Risk

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

We have also entered into natural gas derivative instruments containing a fixed price swap and a sold option (which we refer to as a swaption).

At March 31, 2024, 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, 2024, approximated a net unrealized pretax gain of $393.9 million.

We have also entered into natural gas and oil derivative instruments containing a fixed price swap and a sold option (which we refer to as a swaption).

At June 30, 2024, 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 oil or Mont Belvieu for NGLs, approximated a net unrealized pretax gain of $241.7 million as of June 30, 2024.

These contracts expire monthly through December 2027.

At March 31, 2024, the following commodity derivative contracts were outstanding, excluding our basis swaps which are separately discussed below:

At June 30, 2024, the following commodity derivative contracts were outstanding, excluding our basis swaps which are separately discussed below:

Contract Type

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100,000 Mmbtu/day

Crude Oil (b)

30,000 Mmbtu/day

5,250 bbls/day

April - September 2024

July - September 2024

NGLs (C3-Propane)

6,500 bbls/day

We also sold natural gas swaptions of 40,000 Mmbtu/day for calendar year 2026 at a weighted average price of $4.11/Mmbtu that expire June 2024.

The fair value of these swaptions at March 31, 2024 was a net derivative liability of $358,000.

We also sold crude oil swaptions of 2,500 bbls/day for calendar year 2025 at a weighted average price of $80.00/bbl that expire through September 2024.

The fair value of these swaptions at March 31, 2024 was a net derivative liability of $1.8 million.

We also sold natural gas swaptions of 40,000 Mmbtu/day for calendar year 2026 at a weighted average price of $4.08/Mmbtu that expire through October 2024 and 30,000 MMbtu/day for 2027 at a weighted average price of $4.10 Mmbtu/day that expire in October 2024.

The fair value of these swaptions at June 30, 2024 was a net derivative liability of $1.1 million.

We also sold oil swaptions of 2,000 bbls/day for calendar year 2025 at a weighted average price of $80.00/bbl that expire in September 2024.

The fair value of these swaptions at June 30, 2024 was a net derivative liability of $967,000.

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 loss of $27.0 million at March 31, 2024 and they settle through December 2028.

The fair value of the natural gas basis swaps was a gain of $13.9 million at June 30, 2024, and they settle through December 2028.

Commodity Sensitivity Analysis

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, 2024.

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, 2024.

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, 2024, our derivative counterparties include fourteen financial institutions, of which eight are secured lenders in our bank credit facility.

At June 30, 2024, our derivative counterparties include fifteen financial institutions, of which ten are secured lenders in our bank credit facility.

Counterparty credit risk is considered when determining the fair value of our derivative contracts.

1 unchanged sentence

Interest Rate Risk

At March 31, 2024, we had total debt of approximately $1.8 billion.

At June 30, 2024, we had total debt of approximately $1.7 billion.

All of our outstanding debt is based on fixed interest rates and, as a result, we do not have significant exposure to movements in market interest rates.

Our credit facility provides for variable interest rate borrowings;

however, we did not have any borrowings outstanding as of March 31, 2024.

Our bank credit facility provides for variable interest rate borrowings;

however, we did not have any borrowings outstanding as of June 30, 2024.

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, 2024 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, 2024 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, 2024 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, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

P ART II – OTHER INFORMATION

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