Range Announces Record 2007 Results

RANGE RESOURCES CORPORATION (NYSE: RRC) today announced its 2007 results. Production, total revenues, oil and gas sales revenues, cash flow and earnings all reached record high levels for the year. Reported total revenues were $862 million up 16%, oil and gas sales revenues were $863 million up 44%, cash flow was $632 million up 43% and earnings were $231 million up 45% or $1.54 diluted earnings per share. The following measures are the most comparable to analysts' estimates for the same amounts for the year which constitute non-GAAP measures. Please see the accompanying tables for the calculation of these non-GAAP measures. Oil and gas sales revenues including all cash-settled derivatives totaled $944 million, a 38% increase over the prior year. Cash flow from operations before changes in working capital increased 44% to $674 million. Net income comparable to analyst estimates was $253 million, increasing 63% from the prior comparable year. Diluted earnings per share were $1.69, a 51% increase. A 17% increase in production coupled with an 18% rise in realized prices drove the results. Range replaced 537% of production during the year at an all-in cost of $1.82 per mcfe. Proved reserves increased 27% to 2.2 Tcfe. Commenting, John H. Pinkerton, the Company’s President and CEO, said, "2007 was an outstanding year for Range and its stockholders. Financially, record highs were achieved for all the key metrics both on an absolute and per share basis. Operationally, production rose 17% and proved reserves increased 27% at an attractive all-in cost of $1.82 per mcfe. Looking ahead, we are in an excellent position to set record results again in 2008. Our drilling inventory now exceeds 11,000 locations, and we are off to a fast start with our 2008 drilling program. Importantly, we continue to make solid progress with regard to delineating and expanding our emerging plays. The unrisked reserve potential of the drilling inventory and emerging plays far exceeds our current proven reserves and will be the catalyst for our future growth for many years to come.” Production for the year totaled 117.6 Bcfe, comprised of 90.5 Bcf of gas and 4.5 million barrels of oil and liquids. Production rose in each quarter of the year and averaged 322 Mmcfe per day. Range has achieved consecutive production increases in each of the past 20 quarters. Wellhead prices, after adjustment for all cash-settled hedges and derivatives, rose 18% to $8.03 per mcfe. The average gas price rose 16% to $7.66 per mcf, as the average oil price rose 27% to $60.13 a barrel. The cash margin per mcfe for 2007 rose to a record $5.67 per mcfe, 22% higher than 2006. Reported total revenues for the fourth quarter were $223 million up 27%, oil and gas sales revenues were $241 million up 54%, cash flow was $187 million up 53% and earnings were $34 million up significantly over the $0.4 million of the prior year. Diluted earnings per share for the fourth quarter were $0.22 as compared to a breakeven amount in the prior year due to a loss on discontinued operations. The amounts corresponding to analysts' estimates for the same measures which are non-GAAP measures for the fourth quarter of 2007 are as follows (see the accompanying tables for the calculation of these non-GAAP measures). Oil and gas revenues, including all cash-settled derivatives, rose 48% to $262 million, while realized prices increased 26% to $8.29 per mcf. Production in the quarter increased 17%, averaging 343 Mmcfe per day. Cash flow from operations before changes in working capital increased 64% to a record $190 million. During the quarter, the Company provided a $6.4 million allowance for unproved acreage, which reduced diluted earnings per share by three cents. Net income comparable to analysts' estimates would have been $61 million or $0.40 per diluted share, 90% greater than the comparable prior year. As previously reported, the Company replaced 537% of production in 2007. Drilling alone replaced 424% of production. Proved reserves at December 31, 2007 totaled 2.2 Tcfe, including 1.8 Tcf of natural gas and 67 million barrels of crude oil and liquids. Reserves increased 475 Bcfe or 27% during the year. At year-end, reserves were 82% natural gas by volume, and the reserve life index stood at 17.7 years based on fourth quarter production rates. The percentage of proved developed reserves increased to 64% versus 63% in 2006. Independent petroleum consultants reviewed 86% of the reserves by volume. At year-end, the pretax present value of proved reserves, based on constant prices and costs, discounted at 10% totaled $5.2 billion and the after tax standardized measure was $3.7 billion. The reserve value was based on year-end benchmark prices of $6.80 per Mmbtu and $95.98 per barrel NYMEX. The Company’s all-in finding and development cost averaged $1.82 per mcfe. Drilling expenditures, including $78 million of acreage costs in 2007, totaled $894 million equating to a drill bit finding and development cost of $1.79 per mcfe. The Company has set a 2008 capital budget, excluding acquisitions, of $1.065 billion to fund the drilling of 968 (715 net) wells and 82 (66 net) recompletions. Based on current futures prices and hedges in place, the 2008 capital budget is anticipated to be funded with internal cash flow and asset sales. Range’s drilling program continues to achieve excellent results. At our Nora field in Virginia two separate pilot programs to test downspacing of coal bed methane and tight gas sand wells are achieving early positive results. Our first horizontal well was completed to the Huron shale in the fourth quarter and achieved commercial rates. Ten additional horizontal shale wells are planned here in 2008. Currently the field is producing about 50 Mmcfe per day, net to Range’s interest. With continued positive results in our downspacing programs, there could be as many as 6,000 remaining drilling locations. In our North Texas Barnett Shale play, we currently own in excess of 100,000 net acres and production is now averaging 98 Mmcfe per day, a three-fold increase versus the same time last year. Two new wells drilled in Tarrant County were recently placed on production at initial rates of 8.9 (6.2 net) and 8.3 (5.8 net) Mmcfe per day. Finally, in the Marcellus Shale play in the Appalachian Basin our leasehold position now totals 1.1 million net acres, of which 650,000 net acres are currently considered prospective for shale gas development. Our latest horizontal shale completion just came online at 3.3 Mmcfe per day. This is in addition to the two horizontal shale completions announced last week which came on line at 4.7 and 4.0 mcfe per day. In the last seven months, Range has drilled seven successive horizontal shale wells in the play with initial production rates ranging between 3.2 to 4.7 Mmcfe per day. Given our substantial acreage position, this play represents as much as 10 to 15 Tcfe in unproven unrisked reserve potential for the Company. In 2008, we plan to drill a total of 60 Marcellus shale wells, 40 of which are planned as horizontal wells. The Company will host a conference call on Wednesday, February 27 at 1:00 p.m. ET to review these results. To participate in the call, please dial 877-407-8035 and ask for the Range Resources 2007 financial results conference call. A replay of the call will be available through March 5 at 877-660-6853. The conference ID for the replay is 274505 and the Account number is 286. A simultaneous webcast of the call may be accessed over the Internet at www.rangeresources.com or www.vcall.com. To listen, please go to either website in time to register and install any necessary software. The webcast will be archived for replay on the Company’s website for 15 days. Non-GAAP Financial Measures: Earnings for 2007 included a $78.8 million mark-to-market loss on certain derivative transactions, derivative ineffective hedging losses of $820,000, a non-cash stock compensation expense of $52.3 million and a gain on discontinued operations of $60.2 million net of tax. Excluding such items, income before income taxes would have been $401 million, a 57% increase over the prior year. Adjusting for the after-tax effect of these items, the Company’s earnings would have been $252.6 million in 2007 or $1.76 per share ($1.69 per diluted share). If similar items were excluded, 2006 earnings would have been $155.4 million or $1.16 per share ($1.12 per diluted share). Earnings for 2006 included mark-to-market derivative gains of $86.5 million, ineffective hedging gains of $6 million and $26 million of non-cash stock compensation. (See reconciliation of non-GAAP earnings in the accompanying table.) The Company believes results excluding these items are more comparable to estimates provided by security analysts and, therefore, are useful in evaluating operational trends of the Company and its performance relative to other oil and gas producing companies. Cash flow from operations before changes in working capital as defined in this release represents net cash provided by operations before changes in working capital and exploration expense adjusted for certain non-cash compensation items. Cash flow from operations before changes in working capital is widely accepted by the investment community as a financial indicator of an oil and gas company’s ability to generate cash to internally fund exploration and development activities and to service debt. Cash flow from operations before changes in working capital is also useful because it is widely used by professional research analysts in valuing, comparing, rating and providing investment recommendations of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Cash flow from operations before changes in working capital is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operations, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity. A table is included which reconciles net cash provided by operations to Cash flow from operations before changes in working capital as used in this release. The cash prices realized for oil and natural gas production including the amounts realized on cash settled derivatives is a critical component in the Company’s performance tracked by investors and professional research analysts in valuing, comparing, rating and providing investment recommendations and forecasts of companies in the oil and gas exploration and production industry. In turn, many investors use this published research in making investment decisions. Due to the GAAP disclosures of various hedging and derivative transactions, such information is now reported in various lines of the income statement. The Company believes that it is important to furnish a table reflecting the details of the various components of each income statement line to better inform the reader the details of each amount and provide a summary of the realized cash-settled amounts which historically were reported as oil and gas sales revenues. This information will serve to bridge the gap between various readers’ understanding and fully disclose the information needed. On its website, the Company provides additional comparative information on prior periods. RANGE RESOURCES CORPORATION (NYSE: RRC) is an independent oil and gas company operating in the Southwestern, Appalachian and Gulf Coast regions of the United States. Except for historical information, statements made in this release, including those relating to expected reserves quantities, capital expenditures, drilling inventory, unrisked reserve potential and emerging plays are 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 are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are subject to a wide range of business risks and uncertainties and there is no assurance 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. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in the Company’s filings with the Securities and Exchange Commission, which are incorporated by reference. Finding costs from all sources is calculated by taking all cash expenditures for drilling, development, acreage and acquisitions divided by the sum of extensions, discoveries, additions, purchases and revisions to reserve volumes. Drill bit finding costs is calculated by taking all cash expenditures for drilling, development and acreage costs divided by the sum of extensions, discoveries, additions and revisions to reserves volumes. The Securities and Exchange Commission has generally permitted oil and gas companies, in filings made with the Securities and Exchange Commission, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use the terms "potential,” "probable," "possible" or "unproven" to describe volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines may prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the Company. While we believe our calculations of unproven drill sites and estimation of unproven reserves and are reasonable, such calculations and estimates have not been reviewed by third-party engineers or appraisers and do not take into account any capital or commercial constraints. Such disclosures as to "unproven reserve potential” has not been risked for possible failure to find commercial quantities of oil and gas reserves when drilled. RANGE RESOURCES CORPORATION         STATEMENTS OF INCOME Based on GAAP reported earnings with additional details of items included in each line in Form 10-K Three Months Ended December 31, Twelve Months Ended December 31, (Unaudited, in thousands, except per share data) 2007 2006 2007 2006   Revenues Oil and gas sales (a) $ 240,901 $ 155,996 $ 862,537 $ 599,139 Transportation and gathering 1,184 572 2,684 2,742 Transportation and gathering - non-cash stock compensation (b) (97 ) (83 ) (394 ) (320 ) Cash-settled derivative gain (a)(c) 21,033 13,759 71,822 49,939 Change in mark-to-market on unrealized derivatives (c) (38,598 ) 2,757 (78,769 ) 86,491 Ineffective hedging gain (loss) (d) (1,322 ) 2,475 (820 ) 5,965 Gain (loss) on sale of properties (d) (2 ) 176 20 21 Other (d)   284     915     5,011     835   $ 223,383   $ 176,567   27% $ 862,091   $ 744,812   16%   Expenses Direct operating 30,021 23,485 106,901 79,858 Direct operating – non-cash stock compensation (b) 487 374 1,840 1,403 Production and ad valorem taxes 9,485 8,445 42,443 36,415 Exploration 12,793 10,012 39,872 41,009 Exploration – non-cash stock compensation (b) 884 883 3,473 3,079 General and administrative 13,319 9,924 50,180 35,591 General and administrative – non-cash stock compensation (b) 4,535 3,948 18,248 14,295 Deferred compensation plan (e) (10 ) 7,220 28,332 6,873 Interest 21,381 17,583 77,737 55,849 Depletion, depreciation and amortization   71,530     48,487     227,328     154,739     164,425     130,361   26%   596,354     429,111   39%   Income from continuing operations before income taxes 58,958 46,206 28% 265,737 315,701 -16%   Income taxes Current (96 ) 97 320 1,912 Deferred   24,743     20,307     98,441     119,840     24,647     20,404     98,761     121,752     Income from continuing operations 34,311 25,802 33% 166,976 193,949 -14%   Discontinued operations, net of taxes   -     (25,375 )   63,593     (35,247 )   Net income $ 34,311   $ 427   NM $ 230,569   $ 158,702   45% Basic Income from continuing operations $ 0.23 $ 0.19 $ 1.16 $ 1.45 Discontinued operations   -     (0.19 )   0.44     (0.26 ) Net income $ 0.23   $ 0.00   NM $ 1.60   $ 1.19   35%   Diluted Income from continuing operations $ 0.22 $ 0.18 $ 1.11 $ 1.39 Discontinued operations   -     (0.18 )   0.43     (0.25 ) Net income $ 0.22   $ 0.00   NM $ 1.54   $ 1.14   35%   Weighted average shares outstanding, as reported Basic 146,982 137,521 7% 143,791 133,751 8% Diluted 153,032 142,544 7% 149,911 138,711 8%   (a) See separate oil and gas sales information table. (b) Costs associated with FASB 123R which have been reflected in the categories associated with the direct personnel costs. (c) Included in Derivative fair value income in 10-K. (d) Included in Other revenues in the 10-K. (e) Reflects the change in the market value of the vested Company stock and other investments during the period held in the deferred compensation plan. NM = not meaningful RANGE RESOURCES CORPORATION             STATEMENTS OF INCOME Restated for Gulf of Mexico Discontinued Three Months Ended December 31, Three Months Ended December 31, Operations, a non-GAAP Presentation (Unaudited, in thousands) 2007 As reported GOM Discontinued Operations 2007 Including GOM 2006 As reported GOM Discontinued Operations 2006 Including GOM   Revenues Oil and gas sales (a) $ 240,901 $ - $ 240,901 $ 155,996 $ 7,568 $ 163,564 Transportation and gathering 1,184 - 1,184 572 9 581 Transportation and gathering – stock based compensation (97 ) - (97 ) (83 ) - (83 ) Cash-settled derivative gain (a) 21,033   - 21,033 13,759 - 13,759 Change in mark-to-market on unrealized derivatives (38,598 ) - (38,598 ) 2,757 - 2,757 Ineffective hedging gain (loss) (1,322 ) - (1,322 ) 2,475 - 2,475 Equity method investment (306 ) - (306 ) 609 - 609 Gain (loss) on sale of properties (2 ) - (2 ) 176 - 176 Interest and other   590     -   590     306     (17 )   289     223,383     -   223,383     176,567     7,560     184,127     Expenses Direct operating 30,021 - 30,021 23,485 3,378 26,863 Direct operating – stock based compensation 487 487 374 - 374 Production and ad valorem taxes 9,485 - 9,485 8,445 89 8,534 Exploration 12,793 - 12,793 10,012 (10 ) 10,002 Exploration – stock based compensation 884 - 884 883 - 883 General and administrative 13,319 - 13,319 9,924 - 9,924 General and administrative – stock based compensation 4,535 - 4,535 3,948 - 3,948 Non-cash compensation deferred compensation plan (10 ) - (10 ) 7,220 - 7,220 Interest expense 21,381 - 21,381 17,583 544 18,127 Depletion, depreciation and amortization   71,530     -   71,530     48,487     3,531     52,018     164,425     -   164,425     130,361     7,532     137,893     Income from continuing operations before income taxes 58,958 - 58,958 46,206 28 46,234   Income taxes provision Current (96 ) - (96 ) 97 - 97 Deferred   24,743     -   24,743     20,307     10     20,317     24,647     -   24,647     20,404     10     20,414     Income from continuing operations 34,311 - 34,311 25,802 18 25,820   Discontinued operations – Austin Chalk, net of tax - - - (25,393 ) - (25,393 ) Discontinued operations – Gulf of Mexico, net of tax   -     -   -     18     (18 )   -     Net income $ 34,311   $ - $ 34,311   $ 427   $ -   $ 427     OPERATING HIGHLIGHTS (Unaudited)   2007   GOM Discontinued Operations 2007 Including GOM   2006   GOM Discontinued Operations 2006 Including GOM   Average Daily Production Oil (bbl) 8,692 - 8,692 8,417 325 8,742 Natural gas liquids (bbl) 3,012 - 3,012 2,826 - 2,826 Gas (mcf) 273,097 - 273,097 212,559 11,533 224,092 Equivalents (mcfe) (b) 343,322 - 343,322 280,013 13,487 293,500   Average Prices Realized (c) Oil (bbl) $ 60.25 $ - $ 60.25 $ 49.43 $ 40.07 $ 49.09 Natural gas liquids (bbl) $ 51.83 $ - $ 51.83 $ 29.59 $ - $ 29.59 Gas (mcf) $ 7.94 $ - $ 7.94 $ 6.33 $ 6.00 $ 6.31 Equivalents (mcfe) (b) $ 8.29 $ - $ 8.29 $ 6.59 $ 6.10 $ 6.57   Direct Operating Costs per mcfe (d) Field expenses $ 0.89 $ - $ 0.89 $ 0.86 $ 1.77 $ 0.91 Workovers $ 0.06   $ - $ 0.06   $ 0.05   $ 0.95   $ 0.08   Total operating costs $ 0.95   $ - $ 0.95   $ 0.91   $ 2.72   $ 0.99     (a) See separate oil and gas sales information table. (b) Oil and natural gas liquids are converted to gas equivalents on a basis of six mcf per barrel. (c) Average prices, including all cash-settled derivatives. (d) Excludes non-cash stock compensation. RANGE RESOURCES CORPORATION             STATEMENTS OF INCOME Restated for Gulf of Mexico Discontinued Twelve Months Ended December 31, Twelve Months Ended December 31, Operations, a non-GAAP Presentation (Unaudited, in thousands) 2007 As reported GOM Discontinued Operations 2007 Including GOM 2006 As reported GOM Discontinued Operations 2006 Including GOM   Revenues Oil and gas sales (a) $ 862,537 $ 9,938 $ 872,475 $ 599,139 $ 34,850 $ 633,989 Transportation and gathering 2,684 10 2,694 2,742 85 2,827 Transportation and gathering – stock based compensation (394 ) - (394 ) (320 ) - (320 ) Cash-settled derivative gain (a) 71,822 - 71,822 49,939 - 49,939 Change in mark-to-market on unrealized derivatives (78,769 ) - (78,769 ) 86,491 - 86,491 Ineffective hedging gain (loss) (820 ) - (820 ) 5,965 - 5,965 Equity method investment 974 - 974 548 - 548 Gain (loss) on sale of properties 20 - 20 21 - 21 Interest and other   4,037     (1 )   4,036     287     (19 )   268     862,091     9,947     872,038     744,812     34,916     779,728     Expenses Direct operating 106,901 2,477 109,378 79,858 10,963 90,821 Direct operating – stock based compensation 1,840 - 1,840 1,403 - 1,403 Production and ad valorem taxes 42,443 105 42,548 36,415 500 36,915 Exploration 39,872 - 39,872 41,009 1,164 42,173 Exploration – stock based compensation 3,473 - 3,473 3,079 - 3,079 General and administrative 50,180 47 50,227 35,591 - 35,591 General and administrative – stock based compensation 18,248 - 18,248 14,295 - 14,295 Non-cash compensation deferred compensation plan 28,332 - 28,332 6,873 - 6,873 Interest expense 77,737 594 78,331 55,849 1,728 57,577 Depletion, depreciation and amortization   227,328     3,325     230,653     154,739     14,922     169,661     596,354     6,548     602,902     429,111     29,277     458,388     Income from continuing operations before income taxes 265,737 3,399 269,136 315,701 5,639 321,340   Income taxes provision Current 320 - 320 1,912 - 1,912 Deferred   98,441     1,190     99,631     119,840     1,974     121,814   98,761 1,190 99,951 121,752 1,974 123,726   Income from continuing operations 166,976 2,209 169,185 193,949 3,665 197,614   Discontinued operations – Austin Chalk, net of tax (411 ) - (411 ) (38,912 ) - (38,912 ) Discontinued operations – Gulf of Mexico, net of tax   64,004     2,209     61,795     3,665     (3,665 )   -     Net income $ 230,569   $ -   $ 230,569   $ 158,702   $ -   $ 158,702     OPERATING HIGHLIGHTS (Unaudited)   2007   GOM Discontinued Operations 2007 Including GOM   2006   GOM Discontinued Operations 2006 Including GOM   Average Daily Production Oil (bbl) 9,205 106 9,311 8,326 331 8,657 Natural gas liquids (bbl) 3,054 - 3,054 2,991 - 2,991 Gas (mcf) 245,465 2,612 248,077 193,734 12,477 206,211 Equivalents (mcfe) (b) 319,016 3,251 322,267 261,639 14,458 276,097   Average Prices Realized (c) Oil (bbl) $ 60.16 $ 58.17 $ 60.13 $ 47.46 $ 42.48 $ 47.27 Natural gas liquids (bbl) $ 41.40 $ - $ 41.40 $ 33.62 $ - $ 33.62 Gas (mcf) $ 7.66 $ 8.06 $ 7.66 $ 6.62 $ 6.53 $ 6.61 Equivalents (mcfe) (b) $ 8.02 $ 8.38 $ 8.03 $ 6.80 $ 6.60 $ 6.79   Direct Operating Costs per mcfe (d) Field expenses $ 0.86 $ 1.78 $ 0.87 $ 0.80 $ 1.48 $ 0.84 Workovers $ 0.06   $ 0.31   $ 0.06   $ 0.04   $ 0.60   $ 0.06   Total operating costs $ 0.92   $ 2.09   $ 0.93   $ 0.84   $ 2.08   $ 0.90     (a) See separate oil and gas sales information table. (b) Oil and natural gas liquids are converted to gas equivalents on a basis of six mcf per barrel. (c) Average prices, including all cash-settled derivatives. (d) Excludes non-cash stock compensation. RANGE RESOURCES CORPORATION   BALANCE SHEETS (Audited, in thousands) December 31, 2007 December 31,2006   Assets Current unrealized derivative gain $ 53,018 $ 93,588 Other current assets 208,796 137,872 Assets held for sale - 79,304 Assets of discontinued operation - 78,161 Oil and gas properties 3,503,808 2,608,088 Transportation and field assets 61,126 47,143 Unrealized derivative gain 1,082 61,068 Other   188,678   82,450 $ 4,016,508 $ 3,187,674   Liabilities and Stockholders’ Equity Liabilities of discontinued operation $ - $ 28,333 Current asset retirement obligation 1,903 3,853 Current unrealized derivative loss 30,457 4,621 Other current liabilities 273,073 214,878   Bank debt 303,500 452,000 Subordinated notes   847,158   596,782 Total long-term debt   1,150,658   1,048,782   Deferred taxes 590,786 468,643 Unrealized derivative loss 45,819 266 Deferred compensation liability 120,223 90,094 Long-term asset retirement obligation 75,567 72,043   Common stock and retained earnings 1,760,181 1,219,640 Treasury stock (5,334) - Other comprehensive income   (26,825)   36,521 Total stockholders’ equity   1,728,022   1,256,161 $ 4,016,508 $ 3,187,674 RANGE RESOURCES CORPORATION     CASH FLOWS FROM OPERATIONS (Unaudited, in thousands) Three Months Ended December 31, Twelve Months Ended December 31,   2007       2006     2007       2006     Net income $ 34,311 $ 427 $ 230,569 $ 158,702 Adjustments to reconcile net income to net cash provided by operations: Gain from discontinued operations - 25,375 (63,593 ) 35,247 Gain from equity investment 306 (609 ) (974 ) (548 ) Deferred income tax (benefit) 24,743 20,307 98,441 119,840 Depletion, depreciation and amortization 71,530 48,486 227,328 154,738 Exploration dry hole costs 6,077 5,798 15,149 15,089 Change in mark-to-market on unrealized derivatives 38,598 (2,757 ) 78,769 (86,491 ) Ineffective hedging (gain) loss 1,322 (2,476 ) 820 (5,654 ) Allowance for bad debts - 80 - 80 Amortization of deferred issuance costs 610 606 2,277 1,827 Deferred and stock-based compensation 7,382 13,616 54,152 27,455 (Gain) loss on sale of assets and other (35 ) (69 ) 2,212 940   Changes in working capital: Accounts receivable (20,975 ) 862 (50,570 ) 30,185 Inventory and other 632 754 (1,040 ) (1,157 ) Accounts payable 17,043 12,752 28,640 (5,049 ) Accrued liabilities   5,028     (1,308 )   9,922     (3,695 ) Net changes in working capital   1,728     13,060     (13,048 )   20,284   Net cash provided from continuing operations $ 186,572   $ 121,844   $ 632,102   $ 441,509   RECONCILIATION OF CASH FLOWS, a non-GAAP measure     (Unaudited, in thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2007       2006     2007       2006     Net cash provided from continuing operations, as reported $ 186,572 $ 121,844 $ 632,102 $ 441,509   Net change in working capital (1,728 ) (13,060 ) 13,048 (20,284 )   Exploration expense 6,716 4,214 24,723 25,920   Cash flow from Gulf of Mexico properties - 3,549 6,829 21,725   Other (1,658 )   (684 )   (3,123 )   (1,977 )   Cash flow from operations before changes in working capital, non-GAAP measure $ 189,902   $ 115,863   $ 673,579   $ 466,893         ADJUSTED WEIGHTED AVERAGE SHARES OUTSTANDING (Unaudited, in thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2007   2006     2007     2006     Basic: Weighted average shares outstanding 149,323 138,724 145,869 135,016 Stock held by deferred compensation plan (2,341 ) (1,203 )   (2,078 )   (1,265 ) 146,982   137,521     143,791     133,751     Dilutive: Weighted average shares outstanding 149,323 138,724 145,869 135,016 Dilutive stock options under treasury method 3,709   3,820     4,042     3,695   153,032   142,544     149,911     138,711   RANGE RESOURCES CORPORATION   OIL AND GAS SALES INFORMATION A Non-GAAP Measure Including Gulf of Mexico Based upon Statements of Income Including Gulf of Mexico Discontinued Operations Discontinued Operations (Unaudited, in thousands, except per unit data) Three Months Ended December 31,   Twelve Months Ended December 31,   2007       2006       2007       2006     Oil and gas sales components: Oil sales $ 65,667 $ 47,994 $ 228,947 $ 197,813 NGL sales 14,361 7,693 46,152 36,705 Gas sales 170,780 121,558 593,215 495,920   Cash-settled hedges (effective): Crude oil (16,687 ) (8,516 ) (23,755 ) (48,444 ) Natural gas   6,780     (5,165 )   27,916     (48,005 ) Total oil and gas sales, as reported $ 240,901   $ 163,564   47% $ 872475   $ 633,989   38%   Derivative fair value income (loss) components: Cash-settled derivatives (ineffective): Crude oil $ (799 ) $ - $ (828 ) $ - Natural gas 21,832 13,759 72,650 49,939   Change in mark-to-market on unrealized derivatives   (39,920 )   5,232     (79,589 )   92,456   Total derivative fair value income, as reported $ 18,887   $ 18,991   $ (7,767 ) $ 142,395     Oil and gas sales, including cash-settled derivatives: Oil sales $ 48,181 $ 39,478 $ 204,364 $ 149,369 Natural gas liquid sales 14,361 7,693 46,152 36,705 Gas sales   199,392     130,152     693,781     497,854   Total $ 261,934   $ 177,323   48% $ 944,297   $ 683,928   38%   Production during the period: Oil (bbl) 799,676 804,275 -1% 3,398,534 3,159,623 8% Natural gas liquid (bbl) 277,105 259,971 7% 1,114,730 1,091,785 2% Gas (mcf) 25,124,892 20,616,478 22% 90,547,993 75,266,847 20% Equivalent (mcfe) (a) 31,585,578 27,001,954 17% 117,627,577 100,775,295 17%   Average prices realized, including cash-settled hedges and derivatives: Crude oil (per bbl) $ 60.25 $ 49.09 23% $ 60.13 $ 47.27 27% Natural gas liquid (per bbl) $ 51.83 $ 29.59 75% $ 41.40 $ 33.62 23% Gas (per mcf) $ 7.94 $ 6.31 26% $ 7.66 $ 6.61 16% Equivalent (per mcfe) (a) $ 8.29 $ 6.57 26% $ 8.03 $ 6.79 18%   (a) Oil and natural gas liquids are converted to gas equivalents on a basis of six mcf per barrel. RANGE RESOURCES CORPORATION     RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AS REPORTED TO INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES EXCLUDING CERTAIN NON-CASH ITEMS, a non-GAAP measure (Unaudited, in thousands, except per share data)   Three Months Ended December 31, Twelve Months Ended December 31, 2007   2006 2007 2006   As reported $ 58,958 $ 46,206 28% $ 265,737 $ 315,701 -16% Adjustment for certain non-cash items (Gain) loss on sale of properties 2 (176 ) (20 ) (21 ) Gulf of Mexico – discontinued operations - 28 3,399 5,639 Change in mark-to-market on unrealized derivatives 38,598 (2,757 ) 78,769 (86,491 ) Ineffective hedging (gain) loss 1,322 (2,475 ) 820 (5,965 ) Amortization of ineffective interest hedges - - - 311 Transportation and gathering – non-cash stock compensation 97 83 394 320 Direct operating – non-cash stock compensation 487 374 1,840 1,403 Exploration expenses – non-cash stock compensation 884 883 3,473 3,079 General & administrative – non-cash stock compensation 4,535 3,948 18,248 14,295 Deferred compensation plan – non-cash stock compensation   (10 )   7,220     28,332     6,873   As adjusted 104,873 53,334 97% 400,992 255,144 57%   Income taxes, adjusted Current (96 ) 97 320 1,912 Deferred   44,014     23,437     148,063     97,806   Net income excluding certain items, a non-GAAP measure $ 60,955   $ 29,800   105% $ 252,609   $ 155,426   63%   Non-GAAP earnings per share Basic $ 0.41   $ 0.22   86% $ 1.76   $ 1.16   52% Diluted $ 0.40   $ 0.21   90% $ 1.69   $ 1.12   51% HEDGING POSITION As of February 26, 2008   Gas   Oil (Unaudited) Volume   Average Volume   Average Hedged Hedge Hedged Hedge (Mmbtu/d) Prices (Bbl/d) Prices   Calendar 2008 Swaps 155,000 $8.97 - - Calendar 2008 Collars 70,000 $8.01 - $10.83 9,000 $59.34 - $75.48   Calendar 2009 Swaps 70,000 $8.38 - - Calendar 2009 Collars 140,000 $8.24 - $9.19 8,000 $64.01 - $76.00   Note: Details as to the Company’s hedges are posted on its website and are updated periodically.