corresp
November 19, 2010
Via Edgar and Federal Express
Ms. Anne Nguyen Parker
Branch Chief
U. S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, DC 20549
|
|
|
RE:
|
|
Range Resources Corporation |
|
|
Form 10K for the Fiscal Year Ended December 31, 2009 |
|
|
Filed February 24, 2010 |
|
|
File No. 001-12209 |
Dear Ms. Parker:
On November 9, 2010, Range Resources Corporation received comments from the staff of the
Division of Corporation Finance of the Securities and Exchange Commission to the above referenced
Form 10-K. We respectfully submit the following responses to your inquiry. For your convenience,
each response is prefaced by the exact text of the Staffs comment in italicized text.
Properties
Proved Reserves, page 20
Inquiry:
1. We note your response to prior comment 2. However, as your NGL reserves represent 10% of
your total proved reserves these appear significant and should and be disclosed separately. Please
revise.
Response:
In the past, we have consistently combined our oil and NGL reserves because we did not believe
they represented a significant portion of our total reserves. We believe our 2009 10-K is
materially accurate and we respectfully submit that because our NGL reserves are only 9.89% of our
total proved reserves, they do not warrant separate disclosure. However, due to increased wet gas
reserves from our 2010 drilling in our Marcellus Shale play and as evidenced by our September 30,
2010 Quarterly Report on Form 10-Q and our recent press releases, we expect to continue an
increased focus on NGLs and we expect that our NGL proved reserves will be a more significant part
of our total proved reserves at December 31, 2010 and
therefore, we would expect to separately disclose NGL reserves in our
2010 Annual Report on Form 10-K, along with any comparable periods.
Reserve Estimation, page 22
Inquiry:
2. In response to prior comment 3, you disclose that you will
suggest to your third
party engineers that future reserve audit reports include a specific reference to 1202(a)(9) of
Regulation S-K and expressly note their compliance with that definition. Please ensure
that future reserve audit reports reference such compliance with that definition or will define
that term in their report.
1
Response:
We will take all reasonable steps to direct our independent third party engineers to include
in their future reserve audit reports specific reference to 1202(a)(9) of Regulation S-K. Based on
discussions with our engineers, they have agreed to your request and will include this reference in
their future reports.
Undeveloped Acreage Expirations, page 24
Inquiry:
3. We note that at fiscal year end, on page 19 you disclose 131,700 net acres in the Barnett
Shale. However, as announced on October 28, 2010, you have decided to offer for sale your Barnett
Shale properties in Texas, but this only includes 53,000 net acres. If this proposed sale
encompasses all of your Barnett Shale properties, then it appears that some 78,700 acres expired in
this area alone in the nine-months since your year-end. Please clarify, and explain if these
developments reflect any inability of you to drill due to inadequate capital, equipment or
personnel.
Response:
Included in the 131,700 net acres in our 2009 Annual Report on Form 10-K was Barnett Shale
acreage and certain other related acreage which is not included in the package that we have
announced is being marketed for sale. The package we are marketing for possible sale only includes
the majority of our Barnett Shale acreage in the North Texas region which we believe was clearly
defined in our press release and third quarter analyst call. Only about 13,000 of such leasehold
acres expired in the first nine months of 2010. We allowed these acres to expire based on a
business decision to re-deploy capital elsewhere as opposed to an inability to drill due to
inadequate capital, equipment or personnel and we have continued to lease acreage in the Barnett
Shale during the year.
Supplemental Information on Natural Gas and Oil Exploration, Development and Production Activities
Estimated Quantities of Proved Oil and Gas Reserves (unaudited)
Reserve Estimation, page F-38
Inquiry:
4. In response to prior comment 4 you disclose that the wells associated with 4.5% of PUDs, or
2% of total proved reserves, have not been drilled within five years of the booking date because of
internal factors, namely the allocation of development capital across your portfolio. You response
does not indicate if and when you intend to drill and produce these wells. Unless you are
reasonably certain of developing these wells within the next five years, you should remove the
reserve estimates associated with these wells. Please revise or advise.
Response:
At December 31, 2009, we were reasonably certain that we would drill the wells associated with
these PUDs within five years. We also believed that we would have adequate capital and access to
the equipment, personnel and services necessary to drill such wells as of that date, thus
warranting their inclusion in our reserve estimates. We agree that it is appropriate to remove the
reserve estimates associated with these wells if our drilling plans and expectations change.
Exhibits 99
Inquiry:
5. We note your response to prior comment 5. Please ensure that future reserve audit reports
include the information requested by this comment.
Response:
We will take all reasonable steps to direct our independent engineering firms to include the
following in their future reserve audit reports, as required by current SEC guidance:
2
|
1) |
|
An express statement indicating that they have used all methods and procedures it
considered necessary under the circumstances to prepare the report; |
|
|
2) |
|
Express disclosure of both the specific twelve month benchmark product prices and the
specific average adjusted prices used to determine reserves; and |
|
|
3) |
|
Express disclosure of the specific percentage difference between our proved reserve
estimates and those calculated by our third party engineers. |
Based on discussions with our engineers, they have agreed to your request and will include the
above in their future reports.
Inquiry:
6. In response to prior comment 6 you disclose that such principles are sufficiently
established and relied on in the industry such that they are generally accepted. However, while
Section 1.2 of the SPE 2007 Standards does refer to generally accepted petroleum engineering and
evaluation principles, nowhere does this document list a compilation of such principles.
Accordingly, please ensure that your third party engineer omits the reference to generally
accepted industry methods and evaluation principles in its third party engineering report.
Response:
We have discussed your request with Wright and Company and Wright and Company has agreed to
exclude such reference in their future engineering reports.
Inquiry:
7. We note your response to prior comment 7, as well as the revised Wright report that you
filed with your Form 10-Q for the quarter ended September 30, 2010. However, Exchange Act Rule
12b-15 directs that all amendments must be filed under cover of the form amended. Thus, please
file an amended Form 10-K to provide this revised report.
Response:
Concurrently with the submission of this letter, we are filing through EDGAR a Form 10-K/A for
December 31, 2009 with the revised version of the Wright and Company report, along with the related
consent. For consistency and due to the proximity of this filing to the expected filing of our
Annual Report on Form 10-K for the year ended December 31, 2010, the Wright Report will also
include other staff changes requested in Item 2, 5 and 6 above.
*******
In connection with the foregoing responses, the undersigned, on behalf of the
Company, acknowledges that:
|
|
|
the Company is responsible for the adequacy and accuracy of the disclosure
in the filing; |
|
|
|
|
Staff comments or changes to disclosures in response to Staff comments do
not foreclose the Commission from taking any action with respect to the filing;
and |
|
|
|
|
the Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of
the United States. |
|
|
|
|
Please contact the undersigned at (817) 869-4224 if you have additional questions or comments. |
Sincerely,
/s/ ROGER S. MANNY
Roger S. Manny
Executive Vice President and Chief Financial Officer
|
|
|
Cc:
|
|
John H. Pinkerton, Chief Executive Officer |
|
|
David Poole, Senior Vice President and General Counsel |
|
|
Stephen M. Gill Vinson & Elkins LLP |
|
|
Kevin Dougherty United States Securities and Exchange Commission |
3