Range Resources is eager for the future of the natural gas market.
Credited with discovering the Marcellus Shale, the company has had a long-standing presence in the natural gas-heavy Appalachian Basin.
The pure-play company is seeing an exponential increase in demand for the gassy hydrocarbon materialize in real time—just a conceptual idea a decade ago, said CEO Dennis Degner at Hart Energy’s DUG Appalachia Conference & Expo.
The shift from a "what kind of winter will we have" demand conversation to a more durable, long-term outlook excites Range, Degner said.
The natural gas market is expected to double by the end of the decade as LNG export terminals and AI data centers come online, he said. Plus, the reshoring of manufacturing is expected to boost demand as well.
Range is well-positioned to meet this demand thanks to its extensive and high-quality inventory in Appalachia, Degner said. The E&P has a contiguous acreage position in Southwest Pennsylvania of approximately 440,000 net acres that’s combined with its infrastructure development for gas and NGLs.
Degner dove further into Range’s strategies to capitalize on natural gas demand in this Hart Energy exclusive interview with Deon Daugherty.
Hi, I am Deon Daugherty, editor-in-chief at Hart Energy here in Pittsburgh for Hart’s DUG Appalachia Conference & Expo. And joining me now is Dennis Degner, CEO of Range Resources. Dennis, thank you for being with us.
Dennis Degner: Thank you for having me.
DD: You were on the stage and did a magnificent job of course. Let's talk about some of the things that have you so excited, some of the momentum maybe behind Appalachia gas.
Degner: Yeah, I think what's really gotten us excited at Range is the fact that a lot of the demand that we've been talking about, for the past number of years, is starting to take shape and you're starting to see it materialize. If you were to just really look back about four or five years ago, LNG growth and expansion was still under construction, and I think there were still some question marks about how durable is the LNG market, how much growth could we really expect? Now we're talking by the end of the decade to see it essentially double from where it is today, and we're at 17 Bcf/d, which is an all-time high. I think the other thing that gets us excited is the opportunity set around power demand, AI data centers and also the reshoring of manufacturing. So we see a lot of ways for our sector and specifically how Range could really be successful in meeting some of that demand going forward.
Because the key to it is going to be assurances of supply from low emissions, energy sources like natural gas where it's abundant, reliable and Range has the inventory to be able to participate in that space. Backing up, say 10 years ago to 15 years ago, the demand conversation was really revolving around “tell me what kind of winter you think we're going to have.” And now I think we're at a place where we're not only conceptually talking about all this growing demand, but there's line of sight on it and it looks durable. And there's really a lot of great ways for us to participate in that with our inventory, so we're excited about the future of natural gas.
DD: Let's talk about your inventory really quickly. Lots of companies are going through the cycle where first they wanted to be diverse and have acreage all over the country, and then they've decided to be a pure play. Then it seemed like diversification again. You've taken a contrarian view on that and are remaining, for the most part, a pure-play. How does your inventory allow that?
Degner: Well, I think the inventory is what underpins this whole conversation and really many of the questions we may talk about today. And I think when you look at not only just the quantity of inventory that Range has aggregated here in Appalachia, but also the quality of it. It really has allowed us to think differently about being a pure-play producer here in Appalachia. I think the other part is not only do we have a lot of inventory and it's a good quality, but it's in a contiguous acreage position. Now, I think that's not uncommon in today's oil and gas development, but it is really unique. When you look here in Southwest Pennsylvania, not only did we aggregate this contiguous acreage position that's rather large, it's roughly half a million net acres, but we also, as being a first mover in the basin, had the ability to put in an infrastructure to move the gas and NGLs that allowed us to diversify our marketing portfolio, put NGLs on a waterborne export.
And so it's not just the inventory, but the inventory also coupled with how we looked at marketing and getting our products to those premium markets, the markets that are in most need and most growth going forward. So I think as we now talk about the demand component that's materializing in the future, our acreage position, the quality of our inventory allowed us to focus our attention here in Appalachia. And so over the course of time we did monetize several of the assets that we had across the Lower 48. Now we're a pure-play Appalachia producer and we're really proud of that.
DD: Well, it's really interesting. We were talking earlier about how Range is credited with discovering the Marcellus [Shale]. So you've been here a long time and managed to divest things that weren't core, but at the same time sort of build up with your infrastructure as well as the production and the acreage that you needed for that. So you've sort of taken a holistic view, if you will, of growth in this one particular basin. It seems pretty smart.
Degner: Well, we feel like when you start to think about all of the strengths of this region and not only the quality of the asset base and again the quality of the inventory, but it's also the people. And I think the thing that we try and talk about a lot is importance around the inventory, but really there is a very unique employee base here for us that. We say all the time, “you have to have an asset and you have to have people to develop it.” And our team is really phenomenal. And I think the region, not only from our team's perspective, but when you look at the labor pool here in this area in Southwest Pennsylvania, it's going to be incredibly impactful when you think about future data center development and also this power demand AI conversation. So a lot of what we would say crossroads align here in our ability, in our sector to really be a leader in the space of driving this AI revolution.
DD: That's great. I think it's a good place to stop. Dennis, thank you so much for joining us.
Degner: Thank you very much for having me.
DD: All right. And thank you all for sticking with us. Have a good one.