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© Business Wire 2008

2008-07-14 12:47:10 -


-RANGE RESOURCES CORPORATION (NYSE:RRC) today provided an operationalupdate on its activities in the Marcellus Shale play located in theAppalachian Basin.

John Pinkerton, Range's Chairman and CEO,said, "With more than 100 wells drilled in the Marcellus Shale,including 20 horizontal wells, we are extremely pleased with ourprogress to date. We believe we have developed a
solidunderstanding of the play's technical aspects and are moving from thetesting phase to the development stage. Given our 1.4 million acreleasehold position, the Marcellus play holds enormous potential forRange and its shareholders. Importantly, the Marcellus play has thepotential to be a very large economic stimulus to the states involvedand provide a domestic, cleaner and less expensive alternative toforeign oil."

Range continues to accelerate both its drillingand acreage acquisition efforts in the Marcellus Shale play. Includingtransactions that are expected to close shortly, Range's high-gradedleasehold position in the Marcellus play now stands at approximately850,000 acres. The play is developing into two regional areas -southwestern Pennsylvania and northern West Virginia (the "SW") andnortheastern Pennsylvania and southern New York (the "NE"). Of Range'shigh-graded acreage position, roughly 60% is located in the SW and 40%in the NE. The SW has the largest concentration of historicallydeveloped Appalachian oil and gas fields and existing pipelineinfrastructure that is better developed than in the NE. As a result,Range anticipates that the ramp up of Marcellus production will beginprimarily in the SW and then move to the NE.

The Marcellusplay is situated in an enviable position with regard to selling naturalgas into the high-demand northeastern natural gas markets. Rangepreviously announced an agreement with MarkWest Energy Partners, L.P.to construct and operate pipelines and processing facilities covering aportion of its Marcellus acreage position. Work has commenced on threeinfrastructure projects, two in the SW and one in the NE. Theseinfrastructure projects will connect Range's developing Marcellus Shalefields to the larger interstate carriers. Range has secured firmtransportation capacity on interstate carriers totaling 150 Mmcf perday and is holding discussions to expand this capacity as the playdevelops.

Currently, Range has three rigs operating in theMarcellus play and plans to drill 40 horizontal wells in 2008. Laterthis year, Range expects to add two fit-for-purpose rigs. Preliminaryplanning for 2009 includes increasing to eight rigs. Wells arecurrently being drilled, completed and tested, after which they areshut-in awaiting pipeline build out. The initial phase of the pipelineand processing infrastructure is expected to be completed in firstquarter 2009. Production start up will be phased in, but is expected toreach 30 Mmcf per day in the first quarter of 2009. As additional wellsare connected and drilled, production is anticipated to increasethroughout 2009.

In addition to pipeline and processinginfrastructure, access to and disposal of water will be an importantpart of the Marcellus play. Similar to other successful shale plays inthe U.S., hydraulically fracturing the horizontal wells drilled to theMarcellus Shale formation with large, multi-stage water fracs is thekey to unlocking the natural gas reserves. Range, in concert with anindustry consortium is working with various agencies to ensure thatMarcellus development is undertaken in an environmentally prudentfashion to protect the region's water resources. Range is in theprocess of securing water sources and post production water treatmentservices from a number of alternative sources already approved byregulatory agencies. This will facilitate Range's ability to implementits future drilling plans in a timely manner.

Through thefirst quarter of 2008, Range has announced results for 15 horizontalwells. The last 10 reported horizontal wells had an average peakinitial rate of 4.1 Mmcfe per day. Five additional horizontal wells arein various stages of completion and testing. The results on several ofthese wells are expected to be available by the time of our secondquarter earnings release later this month. Based on the results todate, Range estimates that the gross average reserves per horizontalwell are in the range of 3 to 4 Bcfe. In a development mode, Rangeanticipates that a typical Marcellus horizontal well will cost $3 to $4million. Based on results to date, estimated finding and developmentcosts range from $0.90 to $1.60 per mcfe. Based on its currenttechnical evaluation of the Marcellus Shale formation, Range estimatesgas in place in the core SW and NE areas will range from 70 to 150 Bcfper section with variation attributable to thickness, depth, porosity,reservoir pressure and total organic carbon of the shales. Usinggeological, engineering and production data obtained from the wellsdrilled throughout the Marcellus fairway, Range has revised upward itsestimate of the unrisked reserve potential of its leasehold position to15 to 22 Tcfe. Of this total, 10 to 15 Tcf are located in the SW, withthe remainder in the NE.

In addition to drilling additionalwells and building out infrastructure, Range is continuing to pursueits Marcellus Shale play leasehold acquisition effort. So far in 2008,approximately 200,000 acres of additional leasehold have been acquired.Parties wishing to lease their property should call Range's LandDepartment in Pittsburgh at 724-743-6700.

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