Analyst Note| Stephen Ellis |
Range’s second quarter essentially met PitchBook consensus expectations of cash flow per share of $0.71 with $0.70, as the firm benefited from materially higher gas and natural gas liquids pricing. After updating our model, our fair value estimate increases slightly to $9.50 due to better near-term natural gas liquids pricing, while our no-moat rating is unchanged. Range’s gathering costs are expected to increase slightly to a midpoint of $1.45 per million cubic feet equivalent due to its priced-linked natural gas liquids contracts. In turn, realized natural gas liquids pricing is expected to be over $30 a natural gas liquid barrel in the second half of 2021 compared to about $18 per barrel in the fourth quarter of 2020.