e424b5
Filed pursuant to
Rule 424(b)(5)
Registration No. 333-135193
CALCULATION OF
REGISTRATION FEE
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Maximum
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Proposed
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Title of Each Class of
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Amount to be
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Aggregate
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Maximum
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Amount of
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Securities Offered
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Registered
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Offering Price
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Offering Price
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Registration Fee
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Common Stock
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4,830,000
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$320,615,400
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$66.38
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$12,601
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(1) |
The filing fee of $12,601 is calculated in accordance with
Rule 457(r) of the Securities Act of 1933.
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Prospectus supplement
To prospectus dated
June 21, 2006
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4,200,000 shares
Common stock
We are selling 4,200,000 shares of our common stock.
Our common stock is listed on the New York Stock Exchange under
the symbol RRC. On April 30, 2008 the last reported
sale price of our common stock on the New York Stock Exchange
was $66.38 per share.
Shortly following the pricing of this offering, subject to
market conditions, we expect to offer approximately
$250 million in principal amount of senior subordinated
notes due 2018 in a registered public offering. The completion
of this offering is not conditioned upon the completion of the
public offering of senior subordinated notes, and vice versa.
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Per share
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Total
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Public offering price
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$
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66.3800
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$
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278,796,000
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Underwriting discounts and commissions
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$
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2.6552
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$
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11,151,840
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Proceeds to Range Resources, before expenses
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$
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63.7248
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$
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267,644,160
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We have granted the underwriters an option for a period of
30 days to purchase up to 630,000 additional shares to
cover over-allotments, if any.
Investing in our common stock involves certain risks. See
Risk Factors beginning on
page S-8
of this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed on the adequacy or accuracy of this
prospectus supplement or accompanying base prospectus. Any
representation to the contrary is a criminal offense.
We expect that delivery of the shares will be made in book-entry
form through the facilities of The Depository Trust Company
on or about May 6, 2008.
Joint book-running
managers
Co-managers
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Banc
of America Securities LLC
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Johnson
Rice & Company L.L.C.
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CALYON
SECURITIES (USA) INC.
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Natixis
Bleichroeder Inc.
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Pritchard
Capital Partners, LLC
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Simmons &
Company
international
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SunTrust
Robinson Humphrey
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Tudor,
Pickering, Holt & Co.
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April 30, 2008
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not, and the underwriters have
not, authorized any other person to provide you with different
information. If anyone provides you with different or
inconsistent information, you should not rely on it.
We are not, and the underwriters are not, making an offer to
sell securities in any jurisdiction where the offer or sale is
not permitted.
You should assume that the information appearing in this
prospectus supplement and the accompanying prospectus is
accurate only as of the respective dates on the front cover of
these documents or earlier dates specified herein or therein and
that the information incorporated herein by reference is
accurate only as of its date. Our business, financial condition,
results of operations and prospects may have changed since those
dates. It is important that you read and consider all of the
information in this prospectus supplement on the one hand, and
the information contained in the accompanying prospectus and any
document incorporated by reference, on the other hand, in making
your investment decision.
Table of
contents
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Prospectus supplement
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S-ii
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S-iii
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S-1
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S-8
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S-17
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S-18
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S-19
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S-20
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S-23
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S-23
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S-23
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S-24
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Prospectus
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About this prospectus
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1
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Where you can find more information
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1
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Information we incorporate by reference
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1
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Forward-looking statements
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2
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Use of proceeds
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3
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Description of capital stock
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3
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Legal matters
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4
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Experts
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5
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Reserve engineers
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5
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S-i
Forward-looking
statements
This prospectus supplement and the documents incorporated by
reference in this prospectus supplement and the accompanying
prospectus contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934.
These statements include statements relating to our plans,
strategies, objectives, expectations, intentions and adequacy of
resources and are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. In
general, all statements other than statements of historical fact
are forward-looking statements. These forward-looking statements
are based on managements current belief, based on
currently available information, as to the outcome and timing of
future events. However, managements assumptions and our
future performance are subject to a wide range of business risks
and uncertainties and we cannot assure you that these goals and
projections can or will be met. Any number of factors could
cause actual results to differ materially from those in the
forward-looking statements, including, but not limited to:
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production variance from expectations;
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volatility of oil and natural gas prices;
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hedging results;
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the need to develop and replace reserves;
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the substantial capital expenditures required to fund operations;
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exploration risks;
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environmental risks;
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uncertainties about estimates of reserves;
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competition;
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litigation;
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our sources of liquidity;
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access to capital;
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government regulation;
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political risks;
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our ability to implement our business strategy;
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costs and results of drilling new projects;
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mechanical and other inherent risks associated with oil and
natural gas production;
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weather;
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availability of drilling equipment; and
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changes of interest rates.
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Reserve engineering is a process of estimating underground
accumulations of oil and natural gas that cannot be measured in
an exact way. The accuracy of any reserve estimate depends on
the quality of available data, the interpretation of such data
and price and cost assumptions made by our reserve engineers. In
addition, the results of drilling, testing and production
activities may justify revisions of estimates that were made
previously. If significant, such revisions would change the
schedule of any further production and development drilling.
Accordingly, reserve estimates may differ from the quantities of
oil and natural gas that are ultimately recovered.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, events, levels of activity, performance or
achievements. We do not assume responsibility for the accuracy
and completeness of the forward-looking statements.
S-ii
Should one or more of the risks or uncertainties described in
this prospectus supplement, the accompanying prospectus or the
documents we incorporate by reference, or should underlying
assumptions prove incorrect, our actual results and plans could
differ materially from those expressed in any forward-looking
statements. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
All forward-looking statements express or implied included in
this prospectus supplement, the accompanying prospectus and the
documents we incorporate by reference and attributable to Range
are expressly qualified in their entirety by this cautionary
statement. This cautionary statement should also be considered
in connection with any subsequent written or oral
forward-looking statements that Range or persons acting on its
behalf may issue.
Information we
incorporate by reference
The SEC allows us to incorporate by reference the
information we file with them, which means that we can disclose
important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus. Information that we file with
the SEC after we file this prospectus will automatically update
and may replace information in this prospectus and information
previously filed with the SEC. We do not incorporate by
reference any information in any future filings deemed furnished
and not filed pursuant to applicable rules.
We incorporate by reference in this prospectus the documents
listed below which we previously have filed with the SEC and any
future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
(excluding those filings made under Item 2.02 or 7.01 of
Form 8-K)
after we file this prospectus until the offering of the
securities terminates or we have filed with the SEC an amendment
to the registration statement relating to this offering that
deregisters all securities then remaining unsold:
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Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007;
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Quarterly Report on
Form 10-Q
for the three-months ended March 31, 2008; and
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Current Reports on
Form 8-K
filed on January 23, 2008, January 30, 2008,
February 11, 2008, February 21, 2008, March 28,
2008 and April 28, 2008.
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You may request a copy of any of these filings (other than an
exhibit to those filings unless we have specifically
incorporated that exhibit by reference into the filing), at no
cost, by telephoning us at the following number or writing us at
the following address:
Range Resources Corporation
Attention: Corporate Secretary
100 Throckmorton Street
Suite 1200
Fort Worth, Texas 76102
(817) 870-2601
S-iii
Summary
This summary highlights information contained elsewhere in
this prospectus supplement, the accompanying prospectus or the
documents incorporated by reference. It does not contain all of
the information that you should consider before making an
investment decision. You should read carefully the entire
prospectus supplement, the accompanying prospectus, the
documents incorporated by reference and the other documents to
which we refer for a more complete understanding of this
offering. You should read Risk factors beginning on
page S-8
of this prospectus supplement and in our annual report on
Form 10-K
for the year ended December 31, 2007 for more information
about important risks that you should consider before buying the
common stock to be issued in connection with this offering.
Unless the context requires otherwise or as otherwise indicated,
Range, we, us,
our or similar terms in this prospectus supplement
refer to Range Resources Corporation and its subsidiaries on a
consolidated basis. We include, beginning on
page S-24,
a glossary of some of the terms used in this prospectus
supplement, the accompanying prospectus and the documents
incorporated by reference.
Our
business
Business
We are a Fort Worth, Texas-based independent oil and gas
company, engaged in the exploration, development and acquisition
of oil and gas properties, primarily in the Southwestern,
Appalachian and Gulf Coast regions of the United States. We were
incorporated in early 1980 under the name Lomak Petroleum, Inc.
and, later that year, we completed an initial public offering
and began trading on the NASDAQ. In 1996, our common stock was
listed on the New York Stock Exchange. In 1998, we changed our
name to Range Resources Corporation. In 1999, we implemented a
strategy of internally generated drillbit growth coupled with
complementary acquisitions. Our objective is to build
stockholder value through consistent growth in reserves and
production on a cost-efficient basis. During the past five
years, we have increased our proved reserves 286%, while
production increased 115% during that same period.
At year-end 2007, our proved reserves had the following
characteristics:
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2.2 Tcfe of proved reserves;
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82% natural gas;
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64% proved developed;
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77% operated; and
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a reserve life of 17.7 years (based on fourth quarter 2007
production).
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At year-end 2007, we owned 3,385,000 gross (2,695,000 net)
acres of leasehold, including 407,800 acres where we also
own a royalty interest. We have built a multi-year inventory of
drilling projects that is estimated to be over 11,000 identified
drilling locations, of which approximately 8,500 drilling
locations are in our Appalachian region. In addition, we control
over 1,000,000 net acres of leasehold in prospective
Marcellus, Huron, Barnett and Woodford Shales.
Our corporate offices are located at 100 Throckmorton Street,
Suite 1200, Fort Worth, Texas 76102. Our telephone
number is
(817) 870-2601.
S-1
Business
strategy
Our objective is to build stockholder value through consistent
growth in reserves and production on a cost-efficient basis. Our
strategy is to employ internally generated drillbit growth
coupled with complementary acquisitions. Our strategy requires
us to make significant investments in technical staff, acreage
and seismic data and technology to build drilling inventory. Our
strategy has the following principal elements:
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Concentrate in Core Operating Areas. We currently
operate in three regions; the Southwestern (which includes the
Barnett Shale of North Central Texas, the Permian Basin of West
Texas and eastern New Mexico, the East Texas Basin, the Texas
Panhandle and Anadarko Basin of Western Oklahoma), Appalachian
(which includes tight-gas, shale, coal bed methane and
conventional oil and gas production in Pennsylvania, Virginia,
Ohio, New York and West Virginia) and the Gulf Coast (which
includes onshore Texas, Louisiana and Mississippi).
Concentrating our drilling and producing activities in these
core areas allows us to develop the regional expertise needed to
interpret specific geological and operating trends and develop
economies of scale. Operating in multiple core areas allows us
to blend the production characteristics of each area to balance
our portfolio toward our goal of consistent production and
reserve growth.
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Maintain Multi-Year Drilling Inventory. We focus on
areas where multiple prospective productive horizons and
development opportunities exist. We use our technical expertise
to build and maintain a multi-year drilling inventory. A large,
multi-year inventory of drilling projects increases our ability
to consistently grow production and reserves. Currently, we have
over 11,000 identified drilling locations in inventory. In 2007,
we drilled 967 gross (698 net) wells and we drilled
189 gross (142.7 net) wells in the first quarter of 2008.
In 2008, our capital program targets the drilling of
968 gross (715 net) wells.
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Make Complementary Acquisitions. We target
complementary acquisitions in existing core areas and focus on
acquisition opportunities where our existing operating and
technical knowledge is transferable and drilling results can be
forecast with confidence. Over the past three years, we have
completed $1.2 billion of complementary acquisitions. These
acquisitions have been located in the Southwestern and
Appalachian regions.
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Maintain Long Life, Low Decline Reserve Base. Long
life, low decline, oil and gas reserves provide a more stable
growth platform than short life, high decline reserves. We
believe that long life reserves reduce reinvestment risk as they
lessen the amount of reinvestment capital deployed each year to
replace production. Long life, low decline oil and gas reserves
also assist us in minimizing costs as stable production makes it
easier to build and maintain operating economies of scale.
Lastly, the inherent greater predictability of low decline oil
and gas reserve production better lends itself to commodity
price hedging than high decline reserves. We use our
acquisition, divestiture, and drilling activity to execute this
strategy.
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Maintain Flexibility. Because of the volatility of
commodity prices and the risks involved in drilling, we remain
flexible and adjust our capital budget throughout the year. We
may defer capital projects to seize an attractive acquisition
opportunity. If certain areas generate higher than anticipated
returns, we may accelerate drilling in those areas and decrease
capital expenditures elsewhere. We also believe in maintaining a
strong balance sheet and using commodity hedging. This allows us
to be more opportunistic in lower price environments as well as
provide more consistent financial results.
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S-2
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Equity Ownership and Incentive Compensation. We want
our employees to act like owners. To achieve this, we reward and
encourage them through equity ownership in us. As of
March 31, 2008, our employees owned equity securities
(vested and unvested) that had an aggregate market value of
approximately $329.0 million.
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Recent
developments
Capital budget
increase
On April 25, 2008, our Board of Directors approved an
increase to our 2008 capital expenditure budget by
$200 million to $1.265 billion. The capital budget
increase is associated with expanding our leasehold position in
the Marcellus Shale play in Appalachia.
Senior
subordinated notes offering
Shortly following the pricing of this offering, subject to
market conditions, we expect to offer approximately
$250 million in principal amount of senior subordinated
notes due 2018 in a registered public offering. The size of the
senior subordinated notes offering may be increased or decreased
depending on market conditions. The completion of this offering
is not conditioned upon the completion of the public offering of
senior subordinated notes, and vice versa. We cannot give any
assurance that the senior subordinated notes offering will be
completed. Please see Use of proceeds and
Capitalization.
S-3
The
offering
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Common stock offered by us |
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4,200,000 shares (or 4,830,000 shares if the
underwriters exercise in full their option to purchase an
additional 630,000 shares) |
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Common stock to be outstanding immediately after completion
of this offering(1) |
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154,323,469 shares (or 154,953,469 shares if the
underwriters exercise in full their option to purchase an
additional 630,000 shares) |
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Over-allotment option |
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630,000 shares |
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Use of proceeds |
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The net proceeds from the sale of the shares, after deducting
underwriting discounts and commissions and estimated offering
expenses, will be approximately $266.9 million, or
approximately $307.0 million if the underwriters
overallotment option is exercised in full. |
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We intend to use the net proceeds from this offering to pay down
a portion of the outstanding balance of our senior credit
facility. Such amounts may be reborrowed from time to time for
general corporate purposes including, but not limited to,
acreage acquisitions. Certain of the underwriters or their
affiliates are lenders under our senior credit facility and will
receive a portion of the net proceeds from this offering used to
pay down our senior credit facility. See Use of
Proceeds. |
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NYSE symbol |
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RRC |
(1) The number of shares of common stock to be
outstanding after this offering excludes stock appreciation
rights and options to purchase 7,973,786 shares outstanding
under our employee benefit and equity plans as of March 31,
2008.
S-4
Summary condensed
consolidated financial data
The following table shows selected financial information as of
and for the periods indicated. We derived the information in the
following table from, and that information should be read
together with and is qualified in its entirety by reference to,
(i) our audited consolidated financial statements and the
accompanying notes included in our Annual Report on
Form 10-K
for the year ended December 31, 2007, which is incorporated
herein by reference, and (ii) our unaudited consolidated
financial statements and the accompanying notes included in our
Quarterly Report on
Form 10-Q
for the three months ended March 31, 2008, which is
incorporated herein by reference. This summary table should be
read in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations,
included in each of our Annual Report on
Form 10-K
for the year ended December 31, 2007 and our Quarterly
Report on
Form 10-Q
for the three months ended March 31, 2008, each of which is
incorporated herein by reference.
A significant producing property acquisition in 2006 affects the
comparability of year-to-year financial and operating data. In
March 2007, we sold our Gulf of Mexico properties for proceeds
of $155.0 million. Accordingly, the financial and
statistical data contained in the following discussion reflects
the reclassification of our Gulf of Mexico operations to
discontinued operations. All weighted average shares and per
share data have been adjusted for the three-for-two stock split
effected December 2, 2005.
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(dollars in thousands, except
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Year ended
December 31,
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Three months ended
March 31,
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per share data)
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2005
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2006
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2007
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2007
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2008
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Statement of operations data:
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Revenues
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Oil and gas sales
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$
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495,470
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$
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599,139
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$
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862,537
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$
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193,316
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$
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307,384
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Transportation and gathering
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2,306
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2,422
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2,290
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184
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1,129
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Derivative fair value (loss) income
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10,303
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142,395
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(7,767
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)
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(42,620
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)
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(123,767
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Other
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1,024
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856
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5,031
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1,961
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20,592
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Total revenue
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$
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509,103
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$
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744,812
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$
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862,091
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$
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152,841
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$
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205,338
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Costs and expenses
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Direct operating
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$
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57,866
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$
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81,261
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$
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108,741
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$
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25,414
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$
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32,950
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Production and ad valorem taxes
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30,822
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36,415
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42,443
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10,412
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13,840
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Exploration
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29,529
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44,088
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43,345
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11,710
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16,593
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General and administrative
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33,444
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49,886
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68,428
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14,678
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17,412
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Deferred compensation plan
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29,474
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6,873
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28,332
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11,247
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20,611
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Interest expense
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37,619
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55,849
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77,737
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18,848
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23,146
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Depletion, depreciation and amortization
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114,364
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154,739
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227,328
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47,332
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71,570
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Total costs and expenses
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$
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333,118
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$
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429,111
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$
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596,354
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$
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139,641
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$
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196,122
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Income from continuing operations before income taxes
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$
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175,985
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$
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315,701
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$
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265,737
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$
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13,200
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$
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9,216
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Income tax provision
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Current
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1,071
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1,912
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320
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|
|
|
384
|
|
|
|
886
|
|
Deferred
|
|
|
64,809
|
|
|
|
119,840
|
|
|
|
98,441
|
|
|
|
4,447
|
|
|
|
6,590
|
|
|
|
|
|
|
|
|
|
$
|
65,880
|
|
|
$
|
121,752
|
|
|
$
|
98,761
|
|
|
$
|
4,831
|
|
|
$
|
7,476
|
|
|
|
|
|
|
|
S-5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands, except
|
|
Year ended
December 31,
|
|
|
Three months ended
March 31,
|
|
per share data)
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2007
|
|
|
2008
|
|
|
|
|
Income from continuing operations
|
|
$
|
110,105
|
|
|
$
|
193,949
|
|
|
$
|
166,976
|
|
|
$
|
8,369
|
|
|
$
|
1,740
|
|
Income (loss) from discontinued operations
|
|
|
906
|
|
|
|
(35,247
|
)
|
|
|
63,593
|
|
|
|
64,768
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
111,011
|
|
|
$
|
158,702
|
|
|
$
|
230,569
|
|
|
$
|
73,137
|
|
|
$
|
1,740
|
|
|
|
|
|
|
|
Earnings per common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basicincome from continuing operations
|
|
$
|
0.89
|
|
|
$
|
1.45
|
|
|
$
|
1.16
|
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
Basicincome (loss) from discontinued operations
|
|
|
|
|
|
|
(0.26
|
)
|
|
|
0.44
|
|
|
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
Basicnet income
|
|
$
|
0.89
|
|
|
$
|
1.19
|
|
|
$
|
1.60
|
|
|
$
|
0.53
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
Dilutedincome from continuing operations
|
|
$
|
0.85
|
|
|
$
|
1.39
|
|
|
$
|
1.11
|
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
Dilutedincome (loss) from discontinued operations
|
|
|
0.01
|
|
|
|
(0.25
|
)
|
|
|
0.43
|
|
|
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
Dilutednet income
|
|
$
|
0.86
|
|
|
$
|
1.14
|
|
|
$
|
1.54
|
|
|
$
|
0.51
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
Cash flow data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from operating activities
|
|
$
|
325,745
|
|
|
$
|
479,875
|
|
|
$
|
642,291
|
|
|
$
|
91,633
|
|
|
$
|
206,303
|
|
Net cash used in investing activities
|
|
|
432,377
|
|
|
|
911,659
|
|
|
|
1,020,572
|
|
|
|
12,206
|
|
|
|
485,228
|
|
Net cash provided from financing activities
|
|
|
93,000
|
|
|
|
429,416
|
|
|
|
379,917
|
|
|
|
86,046
|
|
|
|
274,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
As of March 31,
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2007
|
|
|
2008
|
|
|
|
|
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets(1)
|
|
$
|
207,977
|
|
|
$
|
388,925
|
|
|
$
|
261,814
|
|
|
$
|
345,249
|
|
|
$
|
273,033
|
|
Current liabilities(2)
|
|
|
321,760
|
|
|
|
251,685
|
|
|
|
305,433
|
|
|
|
184,944
|
|
|
|
502,056
|
|
Oil and gas properties, net
|
|
|
1,679,593
|
|
|
|
2,608,088
|
|
|
|
3,503,808
|
|
|
|
2,789,850
|
|
|
|
3,961,454
|
|
Total assets
|
|
|
2,018,985
|
|
|
|
3,187,674
|
|
|
|
4,016,508
|
|
|
|
3,280,884
|
|
|
|
4,487,695
|
|
Bank debt
|
|
|
269,200
|
|
|
|
452,000
|
|
|
|
303,500
|
|
|
|
537,500
|
|
|
|
592,500
|
|
Subordinated notes
|
|
|
346,948
|
|
|
|
596,782
|
|
|
|
847,158
|
|
|
|
596,874
|
|
|
|
847,257
|
|
Stockholders equity(3)
|
|
|
696,923
|
|
|
|
1,256,161
|
|
|
|
1,728,022
|
|
|
|
1,298,914
|
|
|
|
1,643,998
|
|
Weighted average dilutive shares outstanding
|
|
|
129,126
|
|
|
|
138,711
|
|
|
|
149,911
|
|
|
|
143,230
|
|
|
|
153,790
|
|
Cash dividends declared per common share
|
|
|
0.06
|
|
|
|
0.09
|
|
|
|
0.13
|
|
|
|
0.03
|
|
|
|
0.04
|
|
|
|
|
|
|
(1)
|
|
At December 31, 2007 the
balance included deferred tax assets of $26.9 million. At
December 31, 2005 the balance included deferred tax assets
of $61.7 million. At December 31, 2007 the balance
includes a $53.0 million unrealized derivative asset
compared to $93.6 million in 2006. At March 31, 2008
the balance included a deferred tax asset of $68.5 million.
|
|
(2)
|
|
At December 31, 2007 the
balance includes unrealized derivative liabilities of
$30.5 million compared to $4.6 million at
December 31, 2006 and $160.1 million at
December 31, 2005. At March 31, 2008 the balance
included unrealized derivative liabilities of
$205.7 million.
|
|
(3)
|
|
Stockholders equity includes
other comprehensive income (loss) of ($26.8 million) at
December 31, 2007 compared to $36.5 million at
December 31, 2006 and ($147.1 million) at
December 31, 2005. At March 31, 2008 the balance
included other comprehensive losses of ($110.5 million).
|
S-6
Summary
production data
The following table sets forth summary data with respect to our
production and sales of oil and natural gas for the periods
indicated. The information set forth in this table reflects the
reclassification of prior year amounts to report the results of
operations of our Gulf of Mexico properties sold in the first
quarter of 2007 as discontinued operations. For additional
information on price calculations, see the information set forth
in our annual report on
Form 10-K
for the year ended December 31, 2007 in Item 7.
Managements Discussion and Analysis of Financial Condition
and Results of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
Year ended December 31,
|
|
|
March 31,
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2007
|
|
|
2008
|
|
|
|
|
Average daily production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (Bbls)
|
|
|
8,025
|
|
|
|
8,326
|
|
|
|
9,205
|
|
|
|
9,317
|
|
|
|
8,292
|
|
NGLs (Bbls)
|
|
|
2,772
|
|
|
|
2,991
|
|
|
|
3,054
|
|
|
|
3,035
|
|
|
|
3,434
|
|
Natural gas (Mcf)
|
|
|
157,832
|
|
|
|
193,734
|
|
|
|
245,465
|
|
|
|
218,822
|
|
|
|
300,250
|
|
Total (Mcfe)
|
|
|
222,611
|
|
|
|
261,639
|
|
|
|
319,016
|
|
|
|
292,930
|
|
|
|
370,605
|
|
Average sales prices (wellhead):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl)
|
|
$
|
53.30
|
|
|
$
|
62.36
|
|
|
$
|
67.47
|
|
|
$
|
56.01
|
|
|
$
|
94.65
|
|
NGLs (per Bbl)
|
|
|
31.52
|
|
|
|
33.62
|
|
|
|
41.40
|
|
|
|
30.13
|
|
|
|
52.06
|
|
Natural gas (per Mcf)
|
|
|
8.00
|
|
|
|
6.59
|
|
|
|
6.54
|
|
|
|
6.41
|
|
|
|
7.85
|
|
Total (per Mcfe)
|
|
|
7.99
|
|
|
|
7.25
|
|
|
|
7.37
|
|
|
|
6.88
|
|
|
|
8.96
|
|
Average sales price (including all derivative
settlements):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl)
|
|
$
|
38.63
|
|
|
$
|
47.46
|
|
|
$
|
60.16
|
|
|
$
|
55.99
|
|
|
$
|
70.25
|
|
NGLs (per Bbl)
|
|
|
27.27
|
|
|
|
33.62
|
|
|
|
41.40
|
|
|
|
30.13
|
|
|
|
52.06
|
|
Natural gas (per Mcf)
|
|
|
6.21
|
|
|
|
6.62
|
|
|
|
7.66
|
|
|
|
8.22
|
|
|
|
9.25
|
|
Total (per Mcfe)
|
|
|
6.13
|
|
|
|
6.80
|
|
|
|
8.02
|
|
|
|
8.23
|
|
|
|
9.55
|
|
|
|
S-7
Risk
factors
You should carefully consider and evaluate all the
information included or incorporated by reference in this
prospectus supplement and the accompanying prospectus, including
the risks described below, before you decide to buy our common
stock. Our business, financial condition and results of
operations could be materially adversely affected by any of
these risks. The trading price of the common stock could
decline, and you may lose all or part of your investment. The
risks described below are not the only ones facing our company.
Additional risks not presently known to us or that we currently
deem immaterial individually or in the aggregate may also impair
our business operations.
This prospectus supplement and documents incorporated by
reference also contain forward-looking statements that involve
risks and uncertainties, some of which are described in the
documents incorporated by reference in this prospectus
supplement and the accompanying prospectus. Our actual results
could differ materially from those anticipated in these
forward-looking statements as a result of various factors,
including the risks and uncertainties faced by us described
below or incorporated by reference in this prospectus supplement
and the accompanying prospectus.
Risks related to
our business
Volatility of
oil and natural gas prices significantly affects our cash flow
and capital resources and could hamper our ability to produce
oil and gas economically
Oil and natural gas prices are volatile, and a decline in prices
would adversely affect our profitability and financial
condition. The oil and natural gas industry is typically
cyclical, and prices for oil and natural gas have been highly
volatile. Historically, the industry has experienced severe
downturns characterized by oversupply
and/or weak
demand. Higher oil and natural gas prices have contributed to
our positive earnings over the last several years. However,
long-term supply and demand for oil and natural gas is uncertain
and subject to a myriad of factors such as:
|
|
|
the domestic and foreign supply of oil and gas;
|
|
the price and availability of alternative fuels;
|
|
weather conditions;
|
|
the level of consumer demand;
|
|
the price of foreign imports;
|
|
world-wide economic conditions;
|
|
political conditions in oil and gas producing regions; and
|
|
domestic and foreign governmental regulations.
|
Decreases in oil and natural gas prices from current levels
could adversely affect our revenues, net income, cash flow and
proved reserves. Significant and prolonged price decreases could
have a material adverse effect on our operations and limit our
ability to fund capital expenditures. Without the ability to
fund capital expenditures, we will be unable to replace reserves
and production.
Hedging
transactions may limit our potential gains and involve other
risks
To manage our exposure to price risk, we, from time to time
enter into hedging arrangements, using commodity derivatives
with respect to a significant portion of our future production.
The
S-8
goal of these hedges is to lock in prices so as to limit
volatility and increase the predictability of cash flow. These
transactions limit our potential gains if oil and natural gas
prices rise above the price established by the hedge.
In addition, hedging transactions may expose us to the risk of
financial loss in certain circumstances, including instances in
which:
|
|
|
our production is less than expected;
|
|
|
the counterparties to our futures contracts fail to perform
under the contracts; or
|
|
|
a sudden, unexpected event materially impacts oil or natural gas
prices or the relationship between the hedged price index and
the oil and gas sales price.
|
Some of our derivatives do not qualify for hedge accounting.
These contracts are accounted for using the mark-to-market
accounting method. Due to continued rising commodity prices for
oil and natural gas in 2008, we reported a non-cash unrealized
mark-to-market loss from our oil and gas derivatives of
$135.2 million for the quarter ended March 31, 2008.
If commodity prices for oil and natural gas continue to rise, we
would expect to incur additional realized and non-cash
unrealized losses from our oil and gas hedges. If this occurs,
our results of operations, net income and earnings per share may
be adversely affected.
Information
concerning our reserves and future net reserve estimates is
uncertain
There are numerous uncertainties inherent in estimating
quantities of proved oil and natural gas reserves and their
values, including many factors beyond our control. Estimates of
proved reserves are by their nature uncertain. Although we
believe these estimates are reasonable, actual production,
revenues and costs to develop will likely vary from estimates,
and these variances could be material.
Reserve estimation is a subjective process that involves
estimating volumes to be recovered from underground
accumulations of oil and natural gas that cannot be directly
measured. As a result, different petroleum engineers, each using
industry-accepted geologic and engineering practices and
scientific methods, may calculate different estimates of
reserves and future net cash flows based on the same available
data. Because of the subjective nature of oil and natural gas
reserve estimates, each of the following items may differ
materially from the amounts or other factors estimated:
|
|
|
the amount and timing of oil and natural gas production;
|
|
the revenues and costs associated with that production; and
|
|
the amount and timing of future development expenditures.
|
The discounted future net revenues from our proved reserves
included or incorporated by reference in this prospectus
supplement should not be considered as the market value of the
reserves attributable to our properties. As required by
generally accepted accounting principles, the estimated
discounted future net revenues from our proved reserves are
based generally on prices and costs as of the date of the
estimate, while actual future prices and costs may be materially
higher or lower. In addition, the 10 percent discount
factor that is required to be used to calculate discounted
future net revenues for reporting purposes under generally
accepted accounting principles is not necessarily the most
appropriate discount factor based on the cost of capital in
effect from time to time and risks associated with our business
and the oil and natural gas industry in general.
S-9
If oil and
natural gas prices decrease or drilling efforts are
unsuccessful, we may be required to record write-downs of our
oil and natural gas properties
In the past, we have been required to write down the carrying
value of certain of our oil and natural gas properties, and
there is a risk that we will be required to take additional
write-downs in the future. This could occur when oil and natural
gas prices are low, or if we have downward adjustments to our
estimated proved reserves, increases in our estimates of
operating or development costs, deterioration in our drilling
results or mechanical problems with wells where the cost to
redrill or repair does not justify the expense.
Accounting rules require that the carrying value of oil and
natural gas properties be periodically reviewed for possible
impairment. Impairment is recognized when the book
value of a proven property is greater than the expected
undiscounted future net cash flows from that property and on
acreage when conditions indicate the carrying value is not
recoverable. We may be required to write down the carrying value
of a property based on oil and natural gas prices at the time of
the impairment review, as well as a continuing evaluation of
drilling results, production data, economics and other factors.
While an impairment charge reflects our long-term ability to
recover an investment, it does not impact cash or cash flow from
operating activities, but it does reduce our reported earnings
and increases our leverage ratios.
Our business
is subject to operating and environmental hazards and risks that
could result in substantial losses or liabilities that may not
be fully covered under our insurance policies
Oil and natural gas operations are subject to many risks,
including well blowouts, craterings, explosions, uncontrollable
flows of oil, natural gas or well fluids, fires, formations with
abnormal pressures, pipeline ruptures or spills, pollution,
releases of toxic natural gas and other environmental hazards
and risks. If any of these hazards occur, we could sustain
substantial losses as a result of:
|
|
|
injury or loss of life;
|
|
severe damage to or destruction of property, natural resources
and equipment;
|
|
pollution or other environmental damage;
|
|
clean-up
responsibilities;
|
|
regulatory investigations and penalties; or
|
|
suspension of operations.
|
As we drill to deeper horizons and in more geologically complex
areas, we could experience a greater increase in operating and
financial risks due to inherent higher reservoir pressures and
unknown downhole risk exposures. As we continue to drill deeper,
the number of rigs capable of drilling to such depths will be
fewer and we may experience greater competition from other
operators.
We maintain insurance against some, but not all, of these
potential risks and losses. We may elect not to obtain insurance
if we believe that the cost of available insurance is excessive
relative to the risks presented. Recently, we have experienced
substantial increases in premiums especially in the areas
affected by the hurricanes and tropical storms. Insurers have
imposed revised limits affecting how much the insurers will pay
on actual storm claims plus the cost to re-drill wells where
substantial damage has been incurred. Insurers are also
requiring us to retain larger deductibles and reducing the scope
of what insurable losses will include. Even with the increase in
future insurance premiums, coverage will be reduced, requiring
us to bear a greater potential risk if our oil and gas
properties are damaged. We do not maintain any
S-10
business interruption insurance. In addition, pollution and
environmental risks generally are not fully insurable. If a
significant accident or other event occurs that is not fully
covered by insurance, it could have a material adverse affect on
our financial condition and results of operations.
We are subject
to financing and interest rate exposure risks
Our business and operating results can be harmed by factors such
as the availability, terms of and cost of capital, increases in
interest rates or a reduction in credit rating. These changes
could cause our cost of doing business to increase, limit our
ability to pursue acquisition opportunities and place us at a
competitive disadvantage. For example, at March 31, 2008,
59% of our debt was at fixed interest rates with the remaining
41% subject to variable interest rates. Recent unfavorable
disclosures concerning the sub-prime mortgage market may lead to
a contraction in credit availability impacting our ability to
finance our operations.
Many of our
current and potential competitors have greater resources than we
have and we may not be able to successfully compete in
acquiring, exploring and developing new properties
We face competition in every aspect of our business, including,
but not limited to, acquiring reserves and leases, obtaining
goods, services and employees needed to operate and manage our
business and marketing oil and natural gas. Competitors include
multinational oil companies, independent production companies
and individual producers and operators. Many of our competitors
have greater financial and other resources than we do. As a
result, these competitors may be able to address these
competitive factors more effectively than we can or weather
industry downturns more easily than we can.
The demand for
field services and their ability to meet that demand may limit
our ability to drill and produce our oil and natural gas
properties
Due to current industry demands, well service providers and
related equipment and personnel are in short supply. This is
causing escalating prices, the possibility of poor services
coupled with potential damage to downhole reservoirs and
personnel injuries. Such pressures will likely increase the
actual cost of services, extend the time to secure such services
and add costs for damages due to accidents sustained from the
over use of equipment and inexperienced personnel. In some
cases, we are operating in new areas where services and
infrastructure do not exist or in urban areas which are more
restrictive.
The oil and
natural gas industry is subject to extensive
regulation
The oil and natural gas industry is subject to various types of
regulations in the United States by local, state and federal
agencies. Legislation affecting the industry is under constant
review for amendment or expansion, frequently increasing our
regulatory burden. Numerous departments and agencies, both state
and federal, are authorized by statute to issue rules and
regulations binding on participants in the oil and natural gas
industry. Compliance with such rules and regulations often
increases our cost of doing business and, in turn, decreases our
profitability.
Our operations are subject to numerous and increasingly strict
federal, state and local laws, regulations and enforcement
policies relating to the environment. We may incur significant
costs and liabilities in complying with existing or future
environmental laws, regulations and
S-11
enforcement policies and may incur costs arising out of property
damage or injuries to employees and other persons. These costs
may result from our current and former operations and even may
be caused by previous owners of property we own or lease. Any
past, present or future failure by us to completely comply with
environmental laws, regulations and enforcement policies could
cause us to incur substantial fines, sanctions or liabilities
from cleanup costs or other damages. Incurrence of those costs
or damages could reduce or eliminate funds available for
exploration, development or acquisitions or cause us to incur
losses.
Acquisitions
are subject to the risks and uncertainties of evaluating
reserves and potential liabilities and may be disruptive and
difficult to integrate into our business
We could be subject to significant liabilities related to our
acquisitions. It generally is not feasible to review in detail
every individual property included in an acquisition.
Ordinarily, a review is focused on higher valued properties.
However, even a detailed review of all properties and records
may not reveal existing or potential problems in all of the
properties, nor will it permit us to become sufficiently
familiar with the properties to assess fully their deficiencies
and capabilities. We do not always inspect every well we
acquire, and environmental problems, such as groundwater
contamination, are not necessarily observable even when an
inspection is performed.
For example, in 1997, we consummated a large acquisition that
proved extremely disappointing. Production from the acquired
properties fell more rapidly than anticipated and further
development results were below the results we had originally
projected. The poor production performance of these properties
resulted in material downward reserve revisions. There is no
assurance that our recent
and/or
future acquisition activity will not result in similarly
disappointing results.
In addition, there is intense competition for acquisition
opportunities in our industry. Competition for acquisitions may
increase the cost of, or cause us to refrain from, completing
acquisitions. Our acquisition strategy is dependent upon, among
other things, our ability to obtain debt and equity financing
and, in some cases, regulatory approvals. Our ability to pursue
our acquisition strategy may be hindered if we are not able to
obtain financing on terms acceptable to us or regulatory
approvals.
Acquisitions often pose integration risks and difficulties. In
connection with recent and future acquisitions, the process of
integrating acquired operations into our existing operations may
result in unforeseen operating difficulties and may require
significant management attention and financial resources that
would otherwise be available for the ongoing development or
expansion of existing operations. Future acquisitions could
result in our incurring additional debt, contingent liabilities,
expenses and diversion of resources, all of which could have a
material adverse effect on our financial condition and operating
results.
Our success
depends on key members of our management and our ability to
attract and retain experienced technical and other professional
personnel
Our success is highly dependent on our management personnel,
none of which is currently subject to an employment contract.
The loss of one or more of these individuals could have a
material adverse effect on our business. Furthermore,
competition for experienced technical and other professional
personnel is intense. If we cannot retain our current personnel
or attract
S-12
additional experienced personnel, our ability to compete could
be adversely affected. Also, the loss of experienced personnel
could lead to a loss of technical expertise.
Our future
success depends on our ability to replace reserves that we
produce
Because the rate of production from oil and natural gas
properties generally declines as reserves are depleted, our
future success depends upon our ability to economically find or
acquire and produce additional oil and natural gas reserves.
Except to the extent that we acquire additional properties
containing proved reserves, conduct successful exploration and
development activities or, through engineering studies, identify
additional behind-pipe zones or secondary recovery reserves, our
proved reserves will decline as reserves are produced. Future
oil and natural gas production, therefore, is highly dependent
upon our level of success in acquiring or finding additional
reserves that are economically recoverable. We cannot assure you
that we will be able to find or acquire and develop additional
reserves at an acceptable cost.
Drilling is a
high-risk activity
The cost of drilling, completing, and operating a well is often
uncertain, and many factors can adversely affect the economics
of a well. Our efforts will be uneconomical if we drill dry
holes or wells that are productive but do not produce enough oil
and natural gas to be commercially viable after drilling,
operating and other costs. Furthermore, our drilling and
producing operations may be curtailed, delayed, or canceled as a
result of other factors, including:
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|
|
high costs, shortages or delivery delays of drilling rigs,
equipment, labor, or other services;
|
|
|
unexpected operational events and drilling conditions;
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|
|
reductions in oil and natural gas prices;
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|
|
limitations in the market for oil and natural gas;
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|
|
adverse weather conditions;
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|
|
facility or equipment malfunctions;
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|
|
equipment failures or accidents;
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|
|
title problems;
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|
|
pipe or cement failures;
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|
casing collapses;
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|
|
compliance with environmental and other governmental
requirements;
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|
environmental hazards, such as natural gas leaks, oil spills,
pipelines ruptures, and discharges of toxic gases;
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|
lost or damaged oilfield drilling and service tools;
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unusual or unexpected geological formations;
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loss of drilling fluid circulation;
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pressure or irregularities in formations;
|
S-13
|
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|
fires;
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|
natural disasters;
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|
|
blowouts, surface craterings and explosions; and
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|
uncontrollable flows of oil, natural gas or well fluids.
|
If any of these factors were to occur with respect to a
particular field, we could lose all or a part of our investment
in the field, or we could fail to realize the expected benefits
from the field, either of which could materially and adversely
affect our revenue and profitability.
New
technologies may cause our current exploration and drilling
methods to become obsolete
The oil and natural gas industry is subject to rapid and
significant advancements in technology, including the
introduction of new products and services using new
technologies. As competitors use or develop new technologies, we
may be placed at a competitive disadvantage, and competitive
pressures may force us to implement new technologies at a
substantial cost. In addition, competitors may have greater
financial, technical and personnel resources that allow them to
enjoy technological advantages and may in the future allow them
to implement new technologies before we can. One or more of the
technologies that we currently use or that we may implement in
the future may become obsolete. We cannot be certain that we
will be able to implement technologies on a timely basis or at a
cost that is acceptable to us. If we are not able to maintain
technological advancements consistent with industry standards,
our operations and financial condition may be adversely affected.
Our business
depends on oil and natural gas transportation facilities, many
of which are owned by others
The marketability of our oil and natural gas production depends
in part on the availability, proximity and capacity of pipeline
systems owned by third parties. The unavailability of or lack of
available capacity on these systems and facilities could result
in the shut-in of producing wells or the delay or discontinuance
of development plans for properties. Although we have some
contractual control over the transportation of our product,
material changes in these business relationships could
materially affect our operations. We generally do not purchase
firm transportation on third party facilities and therefore, our
production transportation can be interrupted by those having
firm arrangements. Federal and state regulation of oil and
natural gas production and transportation, tax and energy
policies, changes in supply and demand, pipeline pressures,
damage to or destruction of pipelines and general economic
conditions could adversely affect our ability to produce, gather
and transport oil and natural gas.
The disruption of third-party facilities due to maintenance
and/or
weather could negatively impact our ability to market and
deliver our products. We have no control over when or if such
facilities are restored or what prices will be charged. A total
shut-in of production could materially affect us due to a lack
of cash flow, and if a substantial portion of the production is
hedged at lower than market prices, those financial hedges would
have to be paid from borrowings absent sufficient cash flow.
S-14
Our
indebtedness could limit our ability to successfully operate our
business
We are leveraged and our exploration and development program
will require substantial capital resources estimated to range
from $1.3 billion to $1.5 billion per year over the
next three years, depending on the level of drilling and the
expected cost of services. Our existing operations will also
require ongoing capital expenditures. In addition, if we decide
to pursue additional acquisitions, our capital expenditures will
increase both to complete such acquisitions and to explore and
develop any newly acquired properties.
The degree to which we are leveraged could have other important
consequences, including the following:
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we may be required to dedicate a substantial portion of our cash
flows from operations to the payment of our indebtedness,
reducing the funds available for our operations;
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|
|
a portion of our borrowings are at variable rates of interest,
making us vulnerable to increases in interest rates;
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|
|
we may be more highly leveraged than some of our competitors,
which could place us at a competitive disadvantage;
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|
our degree of leverage may make us more vulnerable to a downturn
in our business or the general economy;
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|
we are subject to numerous financial and other restrictive
covenants contained in our senior credit facility and
subordinated notes indentures;
|
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|
our debt level could limit our flexibility in planning for, or
reacting to, changes in our business and the industry in which
we operate; and
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we may have difficulties borrowing money in the future.
|
Despite our current levels of indebtedness we still may be able
to incur substantially more debt. This could further increase
the risks described above.
Any failure to
meet our debt obligations could harm our business, financial
condition and results of operations
If our cash flow and capital resources are insufficient to fund
our debt obligations, we may be forced to sell assets, seek
additional equity or restructure our debt. In addition, any
failure to make scheduled payments of interest and principal on
our outstanding indebtedness would likely result in a reduction
of our credit rating, which could harm our ability to incur
additional indebtedness on acceptable terms. Our cash flow and
capital resources may be insufficient for payment of interest on
and principal of our debt in the future and any such alternative
measures may be unsuccessful or may not permit us to meet
scheduled debt service obligations, which could cause us to
default on our obligations and impair our liquidity.
We exist in a
litigious environment
Any constituent could bring suit or allege a violation of an
existing contract. This action could delay when operations can
actually commence or could cause a halt to production until such
alleged violations are resolved by the courts. Not only could we
incur significant legal and support expenses in defending our
rights, planned operations could be delayed which would
S-15
impact our future operations and financial condition. Such legal
disputes could also distract management and other personnel from
their primary responsibilities.
Our financial
statements are complex
Due to accounting rules, our financial statements continue to be
complex, particularly with reference to hedging, asset
retirement obligations, equity awards, deferred taxes and the
accounting for our deferred compensation plan. We expect such
complexity to continue and possibly increase.
Risks related to
our common stock
Common
stockholders will be diluted if additional shares are
issued
In 2004 and 2005, we sold 33.8 million shares of common
stock to finance acquisitions. In 2006, we issued
6.5 million shares of common stock as part of the
acquisition of Stroud Energy Inc. While the exchanges have
reduced interest expense, preferred dividends and future
repayment obligations, the larger number of common shares
outstanding had a dilutive effect on our existing stockholders.
Our ability to repurchase our shares for cash is limited by our
bank credit facility and our senior subordinated note
agreements. In 2007, we sold 8.1 million shares of common
stock to finance acquisitions. In addition, we may issue
additional shares of common stock, additional subordinated notes
or other securities or debt convertible into common stock, to
extend maturities or fund capital expenditures, including
acquisitions. If we issue additional shares of our common stock
in the future, it may have a dilutive effect on our current
outstanding stockholders.
Dividend
limitations
Limits on the payment of dividends and other restricted
payments, as defined, are imposed under our bank credit facility
and under our senior subordinated note agreements. These
limitations may, in certain circumstances, limit or prevent the
payment of dividends independent of our dividend policy.
Our stock
price may be volatile and you may not be able to resell shares
of our common stock at or above the price you paid
The price of our common stock fluctuates significantly, which
may result in losses for investors. The market price of our
common stock has been volatile. From January 1, 2005 to
April 30, 2008, the sale price of our common stock reported
by the New York Stock Exchange ranged from a low of $12.34 per
share to a high of $73.70 per share. We expect our stock to
continue to be subject to fluctuations as a result of a variety
of factors, including factors beyond our control. These include:
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|
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production variance from expectations;
|
|
volatility of oil and natural gas prices;
|
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hedging results;
|
|
changes in financial estimates by securities analysts;
|
|
changes in market valuations of comparable companies;
|
|
additions or departures of key personnel; and
|
|
future sales of our stock.
|
We may fail to meet expectations of our stockholders or of
securities analysts at some time in the future, and our stock
price could decline as a result.
S-16
Price range of
common stock and dividend history
Our common stock is listed on the New York Stock Exchange
(NYSE) under the symbol RRC. During
2007, trading volume averaged 1.6 million shares per day.
The following table shows the quarterly high and low sale
prices, cash dividends declared and volumes as reported on the
NYSE composite tape for the past two years and for the first
quarter of 2008.
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|
|
|
|
|
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|
Cash dividends
|
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|
High
|
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|
Low
|
|
|
declared
|
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
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|
$
|
30.52
|
|
|
$
|
22.52
|
|
|
|
$0.02
|
|
Second Quarter
|
|
|
30.29
|
|
|
|
21.74
|
|
|
|
0.02
|
|
Third Quarter
|
|
|
30.37
|
|
|
|
23.38
|
|
|
|
0.02
|
|
Fourth Quarter
|
|
|
31.77
|
|
|
|
22.80
|
|
|
|
0.03
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
33.80
|
|
|
$
|
25.59
|
|
|
|
$0.03
|
|
Second Quarter
|
|
|
40.50
|
|
|
|
33.40
|
|
|
|
0.03
|
|
Third Quarter
|
|
|
41.87
|
|
|
|
33.28
|
|
|
|
0.03
|
|
Fourth Quarter
|
|
|
51.88
|
|
|
|
37.17
|
|
|
|
0.04
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
65.53
|
|
|
$
|
43.02
|
|
|
|
$0.04
|
|
|
|
Between April 1, 2008 and April 30, 2008, our common
stock traded at prices between $61.68 and $73.70 per share.
Our senior subordinated notes are not listed on an exchange, but
trade over-the-counter.
The payment of dividends is subject to declaration by the Board
of Directors and depends on earnings, capital expenditures and
various other factors. The bank credit facility and our senior
subordinated notes allow for the payment of common and preferred
dividends, with certain limitations. The determination of the
amount of future dividends, if any, to be declared and paid is
at the sole discretion of our board and will depend upon our
level of earnings and capital expenditures and other matters
that the board of directors deems relevant.
S-17
Use of
proceeds
The net proceeds from the sale of the shares, after deducting
underwriting discounts and commissions and estimated offering
expenses, will be approximately $266.9 million, or
approximately $307.0 million if the underwriters
overallotment option is exercised in full.
We intend to use the net proceeds from this offering to pay down
a portion of the outstanding balance of our senior credit
facility. Such amounts may be reborrowed from time to time for
general corporate purposes including, but not limited to,
acreage acquisitions.
Our senior credit facility has a maturity date of
October 25, 2012. The weighted average interest rate on our
senior credit facility was 5.0% for the three months ended
March 31, 2008. Certain of the underwriters or their
affiliates are lenders under our senior credit facility and will
receive a portion of the net proceeds from this offering used to
pay down our senior credit facility.
Shortly following the closing of this offering, subject to
market conditions, we expect to issue approximately
$250 million in principal amount of senior subordinated
notes due 2018 in a registered public offering. The size of the
senior subordinated notes offering may be increased or decreased
depending on market conditions. The completion of this offering
is not conditioned upon the completion of the public offering of
senior subordinated notes, and vice versa. We cannot give any
assurance that the senior subordinated notes offering will be
completed. We estimate that we will receive net proceeds of
approximately $245.0 million from the senior subordinated
notes offering after deducting the underwriters discounts
but before estimated offering expenses. We expect to use the net
proceeds from the senior subordinated notes offering to pay down
a portion of the outstanding balance of our senior credit
facility. For additional information regarding the impact of the
proposed senior subordinated notes offering on our financial
statements, please read Capitalization.
S-18
Capitalization
The following table sets forth our consolidated cash and cash
equivalents and our consolidated capitalization as of
March 31, 2008 on: (i) an actual basis; (ii) an as
adjusted basis to give effect to this offering and the
application of the estimated net proceeds of this offering in
the manner described under Use of proceeds; and
(iii) an as further adjusted basis to give effect to the
issuance of $250 million of senior subordinated notes in
our pending senior subordinated notes offering described under
Summary Recent developments Senior
subordinated notes offering and the application of the
estimated net proceeds from that offering in the manner
described in footnote 2 to the table. The size of the senior
subordinated notes offering may be increased or decreased
depending on market conditions. If we increase the amount of
notes offered, we would use any additional proceeds to further
repay amounts outstanding under our senior credit facility. We
cannot give any assurance that the senior subordinated notes
offering will be completed.
This table is derived from, should be read together with, and is
qualified in its entirety by reference to (i) our unaudited
consolidated financial statements and the accompanying notes and
(ii) Managements Discussion and Analysis of
Financial Condition and Results of Operations, included in
our Quarterly Report on
Form 10-Q
for the three months ended March 31, 2008, which is
incorporated herein by reference.
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|
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|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2008
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|
|
|
|
|
|
|
|
As further
|
|
|
|
|
|
|
As adjusted
|
|
|
adjusted
|
|
(dollars in thousands)
|
|
Actual
|
|
|
for this offering(1)
|
|
|
for notes offering(2)
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
90
|
|
|
$
|
90
|
|
|
$
|
90
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior credit facility(3)
|
|
|
592,500
|
|
|
|
325,606
|
|
|
|
81,106
|
|
73/8% senior
subordinated notes due 2013
|
|
|
197,691
|
|
|
|
197,691
|
|
|
|
197,691
|
|
63/8% senior
subordinated notes due 2015
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
150,000
|
|
71/2% senior
subordinated notes due 2016
|
|
|
249,566
|
|
|
|
249,566
|
|
|
|
249,566
|
|
71/2% senior
subordinated notes due 2017
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
250,000
|
|
New senior subordinated notes
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
|
|
|
|
Total long-term debt
|
|
$
|
1,439,757
|
|
|
$
|
1,172,863
|
|
|
$
|
1,178,363
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $.01 par value; 250,000,000 shares
authorized; 150,123,469 shares issued and outstanding at
March 31, 2008, 154,323,469 as adjusted(4)
|
|
|
1,501
|
|
|
|
1,543
|
|
|
|
1,543
|
|
Additional paid-in capital
|
|
|
1,392,101
|
|
|
|
1,658,953
|
|
|
|
1,658,953
|
|
Common stock held in treasury
|
|
|
(5,334
|
)
|
|
|
(5,334
|
)
|
|
|
(5,334
|
)
|
Retained earnings
|
|
|
366,263
|
|
|
|
366,263
|
|
|
|
366,263
|
|
Other comprehensive income (loss)
|
|
|
(110,533
|
)
|
|
|
(110,533
|
)
|
|
|
(110,533
|
)
|
|
|
|
|
|
|
Total stockholders equity
|
|
$
|
1,643,998
|
|
|
$
|
1,910,892
|
|
|
$
|
1,910,892
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
3,083,755
|
|
|
$
|
3,083,755
|
|
|
$
|
3,089,255
|
|
|
|
|
|
|
(1)
|
|
Includes an estimated
$266.9 million of net proceeds from this offering after
payment of all transaction expenses.
|
|
(2)
|
|
We expect to use the net proceeds
from the senior subordinated notes offering to pay down a
portion of the outstanding balance of our senior credit facility.
|
|
(3)
|
|
As of April 30, 2008, the
balance of the senior credit facility was $621.5 million.
|
|
(4)
|
|
Outstanding common stock excludes
stock appreciation rights and options to purchase
7,973,786 shares outstanding under our employee benefit and
equity plans as of March 31, 2008.
|
S-19
Underwriting
We are offering the shares of common stock described in this
prospectus supplement through a number of underwriters.
J.P. Morgan Securities Inc. and Credit Suisse Securities
(USA) LLC are acting as joint book running managers of the
offering and as representatives of the underwriters. We have
entered into an underwriting agreement with the underwriters.
Subject to the terms and conditions of the underwriting
agreement, we have agreed to sell to the underwriters, and each
underwriter has severally agreed to purchase, at the public
offering price less the underwriting discounts and commissions
set forth on the cover page of this prospectus supplement, the
number of shares of common stock listed next to its name in the
following table:
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|
|
|
|
Name
|
|
Number of shares
|
|
|
J.P. Morgan Securities Inc.
|
|
|
1,302,000
|
Credit Suisse Securities (USA) LLC
|
|
|
630,000
|
Deutsche Bank Securities Inc.
|
|
|
252,000
|
Banc of America Securities LLC
|
|
|
168,000
|
BMO Capital Markets Corp.
|
|
|
168,000
|
Friedman, Billings, Ramsey & Co., Inc.
|
|
|
168,000
|
Johnson Rice & Co L.L.C.
|
|
|
168,000
|
KeyBanc Capital Markets Inc.
|
|
|
168,000
|
Morgan Stanley & Co. Incorporated
|
|
|
168,000
|
Raymond James & Associates, Inc.
|
|
|
168,000
|
Wachovia Capital Markets, LLC
|
|
|
168,000
|
Calyon Securities (USA) Inc.
|
|
|
84,000
|
Natixis Bleichroeder Inc.
|
|
|
84,000
|
Pritchard Capital Partners, LLC
|
|
|
84,000
|
RBC Capital Markets Corporation
|
|
|
84,000
|
Simmons & Company International
|
|
|
84,000
|
SunTrust Robinson Humphrey, Inc.
|
|
|
84,000
|
Tristone Capital Co.
|
|
|
84,000
|
Tudor, Pickering, Holt & Co. Securities, Inc.
|
|
|
84,000
|
|
|
|
|
Total
|
|
|
4,200,000
|
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The underwriters are committed to purchase all the common shares
offered by us if they purchase any shares. The underwriting
agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may also be
increased or the offering may be terminated.
The underwriters propose to offer the common shares directly to
the public at the public offering price set forth on the cover
page of this prospectus supplement and to certain dealers at
that price less a concession not in excess of $1.5932 per share.
Any such dealers may resell shares to certain other brokers or
dealers at a discount of up to $0.1000 per share from the public
offering price. After the public offering of the shares, the
offering price and other selling terms may be changed by the
underwriters.
The underwriters have an option to buy up to 630,000 additional
shares of common stock from us to cover sales of shares by the
underwriters which exceed the number of shares specified in the
table above. The underwriters have 30 days from the date of
this prospectus supplement to exercise this over allotment
option. If any shares are purchased with this over-allotment
option, the underwriters will purchase shares in approximately
the same proportion as shown in the
S-20
table above. If any additional shares of common stock are
purchased, the underwriters will offer the additional shares on
the same terms as those on which the shares are being offered.
The underwriting fee is equal to the public offering price per
share of common stock less the amount paid by the underwriters
to us per share of common stock. The underwriting fee is $2.6552
per share. The following table shows the per share and total
underwriting discounts and commissions to be paid to the
underwriters assuming both no exercise and full exercise of the
underwriters option to purchase additional shares.
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Without over-allotment
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With full over-allotment
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exercise
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exercise
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Per Share
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$
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2.6552
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$
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2.6552
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Total
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$
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11,151,840
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$
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12,824,616
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We estimate that the total expenses of this offering, including
registration, filing and listing fees, printing fees and legal
and accounting expenses, but excluding the underwriting
discounts and commissions, will be approximately $750,000.
We have agreed that we will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file
with the Securities and Exchange Commission a registration
statement under the Securities Act relating to, any shares of
our common stock or securities convertible into or exchangeable
or exercisable for any shares of our common stock, or publicly
disclose the intention to make any offer, sale, pledge,
disposition or filing, without the prior written consent of
J.P. Morgan Securities Inc. and Credit Suisse Securities
(USA) LLC for a period of 60 days after the date of this
prospectus.
Our directors and executive officers have entered into lock up
agreements with the underwriters prior to the commencement of
this offering pursuant to which we and each of these persons or
entities, with limited exceptions, for a period of 60 days
after the date of this prospectus, may not, without the prior
written consent of J.P. Morgan Securities Inc. and Credit
Suisse Securities (USA) LLC, (1) offer, pledge, announce
the intention to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of our common stock (including, without
limitation, common stock which may be deemed to be beneficially
owned by such directors, executive officers, managers and
members in accordance with the rules and regulations of the SEC
and securities which may be issued upon exercise of a stock
option or warrant) or (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the common stock, whether
any such transaction described in clause (1) or
(2) above is to be settled by delivery of common stock or
such other securities, in cash or otherwise. Notwithstanding the
foregoing, it is understood that we may allow certain executive
officers and directors, at our sole discretion, to sell up to an
aggregate total of 1,000,000 shares of common stock without
further written consent from J.P. Morgan Securities Inc.
and Credit Suisse Securities (USA) LLC.
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of
1933.
In connection with this offering, the underwriters may engage in
stabilizing transactions, which involves making bids for,
purchasing and selling shares of common stock in the open market
for the purpose of preventing or retarding a decline in the
market price of the common stock while this offering is in
progress. These stabilizing transactions may include making
short sales of the common stock, which involves the sale by the
underwriters of a greater number of shares of
S-21
common stock than they are required to purchase in this
offering, and purchasing shares of common stock on the open
market to cover positions created by short sales. Short sales
may be covered shorts, which are short positions in
an amount not greater than the underwriters over allotment
option referred to above, or may be naked shorts,
which are short positions in excess of that amount. The
underwriters may close out any covered short position either by
exercising their over allotment option, in whole or in part, or
by purchasing shares in the open market. In making this
determination, the underwriters will consider, among other
things, the price of shares available for purchase in the open
market compared to the price at which the underwriters may
purchase shares through the over allotment option. A naked short
position is more likely to be created if the underwriters are
concerned that there may be downward pressure on the price of
the common stock in the open market that could adversely affect
investors who purchase in this offering. To the extent that the
underwriters create a naked short position, they will purchase
shares in the open market to cover the position.
The underwriters have advised us that, pursuant to
Regulation M of the Securities Exchange Act of 1934, they
may also engage in other activities that stabilize, maintain or
otherwise affect the price of the common stock, including the
imposition of penalty bids. This means that if the
representatives of the underwriters purchase common stock in the
open market in stabilizing transactions or to cover short sales,
the representatives can require the underwriters that sold those
shares as part of this offering to repay the underwriting
discount received by them.
These activities may have the effect of raising or maintaining
the market price of the common stock or preventing or retarding
a decline in the market price of the common stock, and, as a
result, the price of the common stock may be higher than the
price that otherwise might exist in the open market. If the
underwriters commence these activities, they may discontinue
them at any time. The underwriters may carry out these
transactions on the New York Stock Exchange, in the over the
counter market or otherwise.
Certain of the underwriters and their affiliates have provided
in the past to us and our affiliates and may provide from time
to time in the future certain commercial banking, financial
advisory, investment banking and other services for us and such
affiliates in the ordinary course of their business, for which
they have received and may continue to receive customary fees
and commissions. The underwriters and their affiliates may
provide similar services in the future. In particular, certain
of the underwriters or their affiliates are lenders under our
senior credit facility and will receive the net proceeds from
this offering used to pay down our senior credit facility. In
addition, from time to time, certain of the underwriters and
their affiliates may effect transactions for their own account
or the account of customers, and hold on behalf of themselves or
their customers, long or short positions in our debt or equity
securities or loans, and may do so in the future.
We intend to use more than 10% of the net proceeds from the sale
of the shares to repay indebtedness owed by us to certain of the
underwriters or their affiliates. Accordingly, the offering is
being made in compliance with the requirements of
Rule 2710(h) of the Conduct Rules of the National
Association of Securities Dealers, Inc. (which are part of the
Financial Industry Regulatory Authority Rules).
S-22
Legal
matters
Our legal counsel, Vinson & Elkins L.L.P., Houston,
Texas, will pass upon certain legal matters in connection with
the offered securities. The underwriters will be represented by
Davis Polk & Wardwell, New York, New York.
Experts
The consolidated financial statements of Range Resources
Corporation appearing in its Annual Report on
Form 10-K
for the year ended December 31, 2007, and the effectiveness
of Range Resources Corporations internal control over
financial reporting as of December 31, 2007 have been
audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon,
included therein, and incorporated herein by reference. Such
consolidated financial statements and Range Resources
Corporation managements assessment of the effectiveness of
internal control over financial reporting as of
December 31, 2007 are incorporated herein by reference in
reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
Reserve
engineers
Certain information presented and incorporated by reference in
this prospectus supplement and in the accompanying prospectus
regarding estimated quantities of oil and natural gas reserves
occurred by us, the future net revenues from those reserves and
their present value is based on estimates of the reserves and
present values prepared by or derived from estimates prepared by
DeGolyer and MacNaughton, Wright & Company, Inc. and
H.J. Gruy and Associates, Inc. The reserve information is
presented and incorporated by reference herein in reliance upon
the authority of said firms as experts with respect to such
reports.
S-23
Glossary of
certain oil and natural gas terms
In this prospectus supplement, the following terms have the
meanings specified below.
BblOne stock tank barrel, or 42 U.S. gallons
liquid volume, used herein in reference to crude oil or other
liquid hydrocarbons.
BcfOne billion cubic feet.
BcfeOne billion cubic feet of natural gas
equivalents, based on a ratio of 6 Mcf for each barrel of
oil, which reflects the relative energy content.
Development WellA well drilled within the proved
area of an oil or natural gas reservoir to the depth of a
stratigraphic horizon known to be productive.
Dry HoleA well found to be incapable of producing
oil or natural gas in sufficient economic quantities.
Exploratory WellA well drilled to find oil or gas
in an unproved area, to find a new reservoir in an existing
field or to extend a known reservoir.
Gross Acres Or Gross WellsThe total acres or wells,
as the case may be, in which a working interest is owned.
Infill WellA well drilled between known producing
wells to better exploit the reservoir.
LIBORLondon Interbank Offer Rate, the rate of
interest at which banks offer to lend to one another in the
wholesale money markets in the City of London. This rate is a
yardstick for lenders involved in many high value transactions.
MbblOne thousand barrels of crude oil or other
liquid hydrocarbons.
McfOne thousand cubic feet of gas.
Mcf Per DayOne thousand cubic feet of gas per day.
McfeOne thousand cubic feet of natural gas
equivalents, based on a ratio of 6 Mcf for each barrel of
oil or NGL, which reflects relative energy content.
MmbblOne million barrels of crude oil or other
liquid hydrocarbons.
MmbtuOne million British thermal
units. A British thermal unit is the heat required to
raise the temperature of one-pound of water from 58.5 to 59.5
degrees Fahrenheit.
MmcfOne million cubic feet of gas.
MmcfeOne million cubic feet of gas equivalents.
Net Acres Or Net WellsThe sum of the fractional
working interests owned in gross acres or gross wells.
Present Value (PV)The present value, discounted at
10%, of future net cash flows from estimated proved reserves,
using constant prices and costs in effect on the date of the
report (unless such prices or costs are subject to change
pursuant to contractual provisions).
Productive WellA well that is producing oil or
natural gas or that is capable of production.
S-24
Proved Developed Non-Producing ReservesReserves
that consist of (i) proved reserves from wells which have
been completed and tested but are not producing due to lack of
market or minor completion problems which are expected to be
corrected and (ii) proved reserves currently behind the
pipe in existing wells and which are expected to be productive
due to both the well log characteristics and analogous
production in the immediate vicinity of the wells.
Proved Developed Producing ReservesProved reserves
that can be expected to be recovered from currently producing
zones under the continuation of present operating methods.
Proved Developed ReservesProved reserves that can
be expected to be recovered through existing wells with existing
equipment and operating methods.
Proved ReservesThe estimated quantities of crude
oil, natural gas and natural gas liquids which geological and
engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs under existing
economic and operating conditions.
Proved Undeveloped ReservesProved reserves that are
expected to be recovered from new wells on undrilled acreage, or
from existing wells where a relatively major expenditure is
required for recompletion.
RecompletionThe completion for production of
another formation in an existing well bore.
Reserve Life IndexProved reserves at a point in
time divided by the then annual production rate.
Royalty InterestAn interest in an oil and gas
property entitling the owner to a share of oil and natural gas
production free of costs of production.
Standardized MeasureThe present value, discounted
at 10%, of future net cash flows from estimated proved reserves
after income taxes, calculated holding prices and costs constant
at amounts in effect on the date of the report (unless such
prices or costs are subject to change pursuant to contractual
provisions) and otherwise in accordance with the SECs
rules for inclusion of oil and natural gas reserve information
in financial statements filed with the SEC.
TcfeOne trillion cubic feet of natural gas
equivalent, computed on an approximate energy equivalent basis
that one Bbl equals six Mcf.
Term Overriding RoyaltyA royalty interest that is
carved out of the operating or working interest in a well. Its
term does not necessarily extend to the economic life of the
property and may be of shorter duration than the underlying
working interest. The term overriding royalties in which the
Company participates through Independent Producer Finance
typically extend until amounts financed and a designated rate of
return have been achieved. If such point in time is reached, the
override interest reverts back to the working interest owner.
Working InterestThe operating interest that gives
the owner the right to drill, produce and conduct operating
activities on the property and a share of production, subject to
all royalties, overriding royalties and other burdens, and to
all costs of exploration, development and operations, and all
risks in connection therewith.
S-25
PROSPECTUS
Range Resources
Corporation
Common Stock
We may offer and sell securities from time to time in amounts,
at prices and on terms that we will determine at the times of
the offerings. In addition, selling shareholders to be named in
a prospectus supplement may offer, from time to time, shares of
Range Resources Corporation common stock.
You should read this prospectus and the related prospectus
supplements carefully before you invest in our securities. Any
prospectus supplement may add, update or change information
contained in this prospectus. This prospectus may not be used to
offer and sell our securities unless accompanied by a prospectus
supplement describing the method and terms of the offering of
those offered securities.
We may sell the securities to or through underwriters, and also
to other purchasers or through agents. The names of the
underwriters will be stated in the prospectus supplements and
other offering material. We may also sell securities directly to
investors.
Our common stock is listed on the New York Stock Exchange
under the symbol RRC.
You should read this prospectus and any supplement carefully
before you invest. AN INVESTMENT IN OUR SECURITIES INVOLVES
RISKS. PLEASE READ THE RISK FACTORS DESCRIBED IN ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT, IN OUR
FORM 10-K
AND IN ANY OF THE DOCUMENTS WE INCORPORATE BY REFERENCE.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is June 21, 2006
Table of
contents
We have not authorized any dealer, salesman or other person to
give any information or to make any representation other than
those contained or incorporated by reference in this prospectus
and the accompanying prospectus supplement. You must not rely
upon any information or representation not contained or
incorporated by reference in this prospectus or the accompanying
prospectus supplement as if we had authorized it. This
prospectus and the accompanying prospectus supplement are not an
offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which they
relate. This prospectus and the accompanying prospectus
supplement are not an offer to sell or the solicitation of an
offer to buy securities in any jurisdiction to any person to
whom it is unlawful to make an offer or solicitation in that
jurisdiction. The information contained in this prospectus and
the accompanying prospectus supplement is accurate as of the
dates on their covers. When we deliver this prospectus or an
accompanying prospectus supplement or make a sale pursuant to
this prospectus, we are not implying that the information is
current as of the date of the delivery or sale.
About
this prospectus
This prospectus is part of a registration statement on
Form S-3
that we filed with the Securities and Exchange Commission
(SEC) utilizing a shelf registration process. Under
this shelf registration process, (i) we may sell the
securities described in this prospectus in one or more offerings
or (ii) selling shareholders to be named in a prospectus
replacement may, from time to time, sell common stock in one or
more offerings. This prospectus provides you with a general
description of the securities we may offer. Each time securities
are sold, we will provide a prospectus supplement that will
contain specific information about the terms of the offering and
the securities to be sold. This prospectus does not contain all
of the information included in the registration statement. The
prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the
additional information under the heading Where You Can
Find More Information.
Unless otherwise noted herein, as used in this prospectus,
Range, Range Resources, we,
our, ours, us and the
Company refer to Range Resources Corporation and its
consolidated subsidiaries, except where the context otherwise
requires or as otherwise indicated.
Where you
can find more information
This prospectus does not contain all of the information included
in the registration statement and all of the exhibits and
schedules thereto. For further information about the registrant,
you should refer to the registration statement. Summaries of
agreements or other documents is this prospectus are not
necessarily complete. Please refer to the exhibits to the
registration statement for complete copies of such documents.
We file annual, quarterly and other periodic reports, proxy
statements and other information with the SEC. Our SEC filings
are available over the Internet at the SECs web site at
http://www.sec.gov. You may also read and copy any document we
file with the SEC at the SECs public reference room
located at Room 1580, 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for more information on the public reference room and its copy
charges. You may also inspect our SEC reports and other
information at the New York Stock Exchange, 11 Wall
Street, New York, New York 10005, or at our website at
http://www.rangeresources.com. We do not intend for information
contained in our website to be part of this prospectus.
Information
we incorporate by reference
The SEC allows us to incorporate by reference the
information we file with them, which means that we can disclose
important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus. Information that we file with
the SEC after we file this prospectus will automatically update
and may replace information in this prospectus and information
previously filed with the SEC. We do not incorporate by
reference any information in any future filings deemed furnished
and not filed pursuant to applicable rules.
We incorporate by reference in this prospectus the documents
listed below which we previously have filed with the SEC and any
future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
(excluding information deemed furnished under SEC regulations)
after we file this prospectus until the offering of the
securities terminates or we have filed with the SEC an amendment
to the registration statement relating to this offering that
deregisters all securities then remaining unsold:
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Annual Report on
Form 10-K
for the fiscal year ended December 31, 2005;
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Quarterly Report on
Form 10-Q/A
for the quarterly period ended March 31, 2006, filed on
May 11, 2006; and
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Current Reports on
Form 8-K
filed on January 4, 2006, filed on January 18, 2006,
filed on January 25, 2006, filed on February 2, 2006,
filed on February 24, 2006, filed on March 30, 2006,
filed on April 19, 2006, filed on May 16, 2006 (and
the
Form 8-K/A
filed on May 16, 2006), filed on May 23, 2006, filed
on May 26, 2006, filed on June 9, 2006 and filed on
June 12, 2006; and
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The description of the Registrants Common Stock contained
in the Registration Statement on Form 10, dated
June 18, 1980, and filed with the Commission pursuant to
Section 12(g) of the Securities Exchange Act of 1934 (the
Exchange Act), including any subsequent amendment(s)
or report(s) filed for the purpose of updating such description.
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You may request a copy of any of these filings (other than an
exhibit to those filings unless we have specifically
incorporated that exhibit by reference into the filing), at no
cost, by telephoning us at the following number or writing us at
the following address:
Range Resources Corporation
Attention: Corporate Secretary
100 Throckmorton Street
Suite 1200
Fort Worth, Texas 76102
(817) 870-2601
Forward-looking
statements
This prospectus and the documents incorporated by reference in
this prospectus contain forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Exchange Act. These statements
include statements relating to our plans, strategies,
objectives, expectations, intentions and adequacy of resources
and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. In general,
all statements other than statements of historical fact are
forward-looking statements. These forward-looking statements are
based on managements current belief, based on currently
available information, as to the outcome and timing of future
events. However, managements assumptions and our future
performance are subject to a wide range of business risks and
uncertainties and we cannot assure you that these goals and
projections can or will be met. Any number of factors could
cause actual results to differ materially from those in the
forward-looking statements, including, but not limited to:
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production variance from expectations,
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volatility of oil and natural gas prices,
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hedging results,
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the need to develop and replace reserves,
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the substantial capital expenditures required to fund operations,
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exploration risks,
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environmental risks,
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uncertainties about estimates of reserves,
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competition,
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litigation,
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our sources of liquidity,
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access to capital,
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government regulation,
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political risks,
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our ability to implement our business strategy,
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costs and results of drilling new projects,
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mechanical and other inherent risks associated with oil and
natural gas production,
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weather,
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availability of drilling equipment,
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changes of interest rates, and
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other risks detailed in our filings with the SEC.
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Reserve engineering is a process of estimating underground
accumulations of oil and natural gas that cannot be measured in
an exact way. The accuracy of any reserve estimate depends on
the quality of available data, the interpretation of such data
and price and cost assumptions made by our reserve engineers. In
addition, the results of drilling, testing and production
activities may justify revisions of estimates that were made
previously. If significant, such revisions would change the
schedule of any further production and development drilling.
Accordingly, reserve estimates may differ from the quantities of
oil and natural gas that are ultimately recovered.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, events, levels of activity, performance or
achievements. We do not assume responsibility for the accuracy
and completeness of the forward-looking statements.
Should one or more of the risks or uncertainties described in
this prospectus or the documents we incorporate by reference
occur, or should underlying assumptions prove incorrect, our
actual results and plans could differ materially from those
expressed in any forward-looking statements. Except as required
by applicable law, including the securities laws of the
United States and the rules and regulations of the SEC, we
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise.
All forward-looking statements express or implied, included in
this prospectus and the documents we incorporate by reference
and attributable to Range are expressly qualified in their
entirety by this cautionary statement. This cautionary statement
should also be considered in connection with any subsequent
written or oral forward-looking statements that Range or persons
acting on its behalf may issue.
Use of
proceeds
Unless we inform you otherwise in a prospectus supplement, we
expect to use the net proceeds from the sale of the securities
covered by this prospectus that are sold by us for general
corporate purposes, which may include but are not limited to
reduction or refinancing of debt or other corporate obligations,
repurchasing or redeeming our securities, the financing of
capital expenditures, acquisitions and additions to our working
capital. We may temporarily use the net proceeds received from
any offering of securities to repay our senior credit facility
or other debt until we can use such net proceeds for the stated
purpose. We will not receive any of the proceeds from the sale
of securities covered by this prospectus that are sold by
selling shareholders.
Description
of capital stock
At June 16, 2006, our authorized and outstanding capital
stock consisted of:
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10,000,000 shares of preferred stock, par value
$1.00 per share, of which, no shares are issued and
outstanding; and
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250,000,000 shares of common stock, par value
$0.01 per share, of which 131,419,682 shares were
outstanding.
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Common
Stock
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Dividends. Common stockholders may receive
dividends when declared by the board of directors. Dividends may
be paid in cash, stock or other form. In certain cases, common
stockholders may not receive dividends until we have satisfied
our obligations to any preferred stockholders. Certain of our
debt instruments restrict the payment of cash dividends.
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Voting Rights. Each share of common stock is
entitled to one vote in the election of directors and other
matters. Common stockholders are not entitled to cumulative
voting rights.
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Fully Paid. All outstanding shares of common
stock are fully paid and non-assessable. Any additional common
stock we offer under this Prospectus and issue will also be
fully paid and non-assessable.
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Other Rights. Common stockholders are not
entitled to preemptive rights. If we liquidate, dissolve or
wind-up our
business, either voluntarily or not, common stockholders will
share equally in the assets remaining after we pay our creditors
and preferred stockholders, if any.
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Listing. Our outstanding shares of common
stock are listed on the New York Stock Exchange under the
symbol RRC. Any additional common stock we
issue will also be listed on the NYSE.
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Special
Provision of Delaware Law
We are subject to the provisions of Section 203 of the
Delaware General Corporation Law. In general, Section 203
prohibits a public Delaware corporation from engaging in a
business combination with an interested
stockholder for a period of three years after the date of
the transaction in which the person became an interested
stockholder, unless:
(a) before that person became an interested stockholder,
the corporations board of directors approved the
transaction in which the interested stockholder became an
interested stockholder or approved the business combination;
(b) upon completion of the transaction that resulted in the
interested stockholders becoming an interested
stockholder, the interested stockholder owns at least 85% of the
voting stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of the
corporation and by employee stock plans that do not provide
employees with the right to determine confidentially whether
share held subject to the plan will be tendered in a tender or
exchange offer); or
(c) following the transaction in which that person became
an interested stockholder, the business combination is approved
by the corporations board of directors and authorized at a
meeting of stockholders by the affirmative vote of the holders
of at least two-thirds of the outstanding voting stock not owned
by the interested stockholder.
Under Section 203, these restrictions also do not apply to
certain business combinations proposed by an interested
stockholder following the announcement or notification of one of
certain extraordinary transactions involving the corporation and
a person who was not an interested stockholder during the
previous three years or who became an interested stockholder
with the approval of a majority of the corporations
directors, if that extraordinary transaction is approved or not
opposed by a majority of the directors who were directors before
any person became an interested stockholder in the previous
three years or who were recommended for election or elected to
succeed such directors by a majority of such directors then in
office. Business combination included mergers,
assets sales and other transactions resulting in a financial
benefit to the stockholder. Interested stockholder
is a person who, together with affiliates and associates, owns
(or, within three years, did own) 15% or more of the
corporations voting stock.
Legal
matters
Our legal counsel, Vinson & Elkins L.L.P., Dallas,
Texas, will pass upon certain legal matters in connection with
the offered securities. Any underwriters will be advised about
issues relating to any offering by their own legal counsel.
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Experts
The consolidated financial statements of Range Resources
Corporation appearing in Range Resources Corporations
Annual Report
(Form 10-K)
for the year ended December 31, 2005, and Range Resources
Corporation managements assessment of the effectiveness of
internal control over financial reporting as of
December 31, 2005 included therein, have been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon, included
therein, and incorporated herein by reference. Such consolidated
financial statements and managements assessment are
incorporated herein by reference in reliance upon such reports
given on the authority of such firm as experts in accounting and
auditing.
Reserve
engineers
Certain information incorporated by reference in this prospectus
regarding estimated quantities of oil and natural gas reserves,
the future net revenues from those reserves and their present
value is based on estimates of the reserves and present values
prepared by or derived from estimates prepared by DeGolyer and
MacNaughton, Wright & Company, Inc. and H.J. Gruy
and Associates, Inc. The reserve information is incorporated by
reference herein in reliance upon the authority of said firms as
experts with respect to such reports.
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