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Here's Why You Should Retain Range Resources (RRC) Stock
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Range Resources Corporation (RRC - Free Report) is a leading natural gas exploration and production company. For 2025, the company is likely to see earnings growth of 46.7%.
What’s Favoring the Stock?
In its latest short-term energy outlook, the U.S. Energy Information Administration revealed that it expects Henry Hub spot natural gas spot average price to be higher in the second half of this year at $2.90 per million British thermal units (MMBtu) compared with $2.10 per MMBtu in the first half.
Also, for 2025, EIA expects the price of the commodity to be higher at $3.30 per MMBtu than the projected price of $2.50 for this year. This can benefit the leading natural gas producer, Range Resources, which carries a Zacks Rank #3 (Hold).
RRC has decades of low-risk drilling inventory in Appalachia, brightening its production outlook. The company has lower well costs per lateral foot than many other upstream players.
It has a strong focus on strengthening its balance sheet. Over the past several years, RRC has consistently reduced its net debt load. Notably, the company has the lowest emission intensity among the upstream companies in the United States.
Risks
In spite of the positives, RRC’s overall operations are significantly exposed to extreme oil and natural gas price volatility.
Matador Resources recently entered into a $1.91 billion agreement to expand its footprint in the prolific Delaware Basin. With the deal expected to close in the late third quarter of 2024, the company is projected to have more than 190,000 net acres in the Delaware Basin on a pro forma basis. Consequently, the company estimates that its production will exceed 180,000 barrels of oil equivalent per day, positioning it for significant growth and enhanced operational scale.
Chevron generates most of its earnings from its upstream operations. The integrated energy giant has a strong foothold in the Permian – the most prolific basin in the United States – where a significant portion of the energy major’s acreage has minimum royalty payments. Thus, CVX will generate handsome cashflows through its upstream business, banking on handsome oil prices.
In addition to maintaining disciplined capital spending, Chevron has a strong balance sheet, providing a solid foundation to rely on during unfavorable energy market conditions.
To expand its premier asset portfolio, SM Energy recently agreed to acquire 80% of XCL Resources’ oil and gas assets in the Uinta Basin for $2.04 billion. The value-driven acquisition, likely to close in September this year, will increase its inventory of net locations and boost its oil production. SM Energy is also committed to maintaining its strong balance sheet, which it can rely on during low oil prices.
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Here's Why You Should Retain Range Resources (RRC) Stock
Range Resources Corporation (RRC - Free Report) is a leading natural gas exploration and production company. For 2025, the company is likely to see earnings growth of 46.7%.
What’s Favoring the Stock?
In its latest short-term energy outlook, the U.S. Energy Information Administration revealed that it expects Henry Hub spot natural gas spot average price to be higher in the second half of this year at $2.90 per million British thermal units (MMBtu) compared with $2.10 per MMBtu in the first half.
Also, for 2025, EIA expects the price of the commodity to be higher at $3.30 per MMBtu than the projected price of $2.50 for this year. This can benefit the leading natural gas producer, Range Resources, which carries a Zacks Rank #3 (Hold).
RRC has decades of low-risk drilling inventory in Appalachia, brightening its production outlook. The company has lower well costs per lateral foot than many other upstream players.
It has a strong focus on strengthening its balance sheet. Over the past several years, RRC has consistently reduced its net debt load. Notably, the company has the lowest emission intensity among the upstream companies in the United States.
Risks
In spite of the positives, RRC’s overall operations are significantly exposed to extreme oil and natural gas price volatility.
Stocks to Consider
Better-ranked energy companies include Matador Resources Company (MTDR - Free Report) , Chevron Corporation (CVX - Free Report) and SM Energy Company (SM - Free Report) . While SM Energy sports a Zacks Rank #1 (Strong Buy), Matador Resources and Chevron carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Matador Resources recently entered into a $1.91 billion agreement to expand its footprint in the prolific Delaware Basin. With the deal expected to close in the late third quarter of 2024, the company is projected to have more than 190,000 net acres in the Delaware Basin on a pro forma basis. Consequently, the company estimates that its production will exceed 180,000 barrels of oil equivalent per day, positioning it for significant growth and enhanced operational scale.
Chevron generates most of its earnings from its upstream operations. The integrated energy giant has a strong foothold in the Permian – the most prolific basin in the United States – where a significant portion of the energy major’s acreage has minimum royalty payments. Thus, CVX will generate handsome cashflows through its upstream business, banking on handsome oil prices.
In addition to maintaining disciplined capital spending, Chevron has a strong balance sheet, providing a solid foundation to rely on during unfavorable energy market conditions.
To expand its premier asset portfolio, SM Energy recently agreed to acquire 80% of XCL Resources’ oil and gas assets in the Uinta Basin for $2.04 billion. The value-driven acquisition, likely to close in September this year, will increase its inventory of net locations and boost its oil production. SM Energy is also committed to maintaining its strong balance sheet, which it can rely on during low oil prices.