Range Resources seeks to expand its gas supply agreements with power generation partners in Appalachia.
With a Marcellus and Utica inventory measured in decades, Range is poised to capture a share of the anticipated 4 Bcf/d to 5 Bcf/d of additional regional power demand expected by the end of the decade, CEO Dennis Degner said.
Appalachia power demand is growing from technology hyperscalers, data centers and other industrial users. Big Tech is securing power purchase agreements for renewable sources like nuclear and hydropower wherever possible, but natural gas is expected to supply much of the baseload power needed to keep AI data centers running reliably.
“We hear from the end users how important it is to address the 99.999% of reliability,” Degner said July 23 during Range’s second-quarter earnings call.
The nascent gas-to-AI story is beginning to take shape in the hills of Appalachia. Just as Range gained an early lead in the Marcellus play after its discovery over two decades ago, it’s now ahead of the curve on this new trend.
In April, Range, Liberty Energy and Imperial Land Corp. announced an alliance to develop a natural gas power generation facility in Washington County, Pennsylvania.
Range expects that an end user offtaker for the gas-fired power will come to the table for a deal “here in the near term,” Degner said.
Just last week, Trump-backed investors rallied in Pittsburgh to unveil $90 billion of commitments for energy and infrastructure investments in Pennsylvania shale country.
Fellow Appalachia producer EQT Corp. announced two deals to supply around 1.5 Bcf/d of its Marcellus gas to two data center projects in Pennsylvania. EQT produced about 6.34 Bcfe/d from Appalachia in the first quarter.
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“Endless” Appalachian gas
There are few names with the inventory and operational scale capable of signing the gas-to-AI power agreements emerging right now. Range Resources is one of them.
Range produced 2.2 Bcfe/d (68% natural gas) in the second quarter. The company operated two drilling rigs and a single frac crew.
Over the next two to three years, the company plans to expand production by 400 MMcfe/d by maintaining its current D&C cadence.
And Range has ample room to expand supply, given sufficient demand. The company holds 444,000 contiguous net acres in southwest Pennsylvania and another 70,000 net acres in the northeast part of the state. Range said its northeast Pennsylvania assets produced 100 MMcf/d last year.
Range says it holds over 30 years of Marcellus inventory, and that’s not even counting the company’s upside inventory in the deeper Utica and Point Pleasant formations.
It’s not unreasonable to think Range could double its companywide production over the next five to 10 years, Degner told an analyst.
“When you ask about how much could we participate it, it’s a little bit endless for us because of the inventory,” Degner said, “and our ability to absorb additional incremental activity within the current program as it sits.”
Range holds the most remaining gas inventory in the Lower 48 among the public producers, according to a Mizuho Securities USA analysis.
During the second quarter, Range drilled 285,000 lateral ft across 20 wells, an average of 14,250 ft. The company turned 12 wells to sales during the quarter.
Range also added to its DUC stockpile and expects to exit 2025 with over 400,000 lateral ft of growth inventory to start next year.
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Utica liquids potential
Range has quietly retained deep rights in northwest Pennsylvania with exposure to the deeper Utica and Point Pleasant formations.
Range still holds acreage secured by production in a region long recognized for its energy potential. It was near Titusville, Pennsylvania, that Drake’s Well, the first commercially successful oil well in the U.S., was drilled in August 1859 and sparked a boom that gave birth to the modern oil industry.
Nearby Oil City, in Venango County, grew up around the budding oil industry. John D. Rockefeller’s Standard Oil Co. built an office building in Oil City, the Transit Building, which still stands today.
Range still operates many conventional wells in the area today. The company holds 220,000 net acres in northwest Pennsylvania.
Around 190,000 net acres “have a similar thermal maturity and liquids potential as EOG’s new liquids play in Ohio,” the company said.
Last month, EOG Resources announced a $5.6 billion acquisition Encino Energy, expanding its footprint in the Ohio Utica liquids window.
Range said the Utica play on its acreage “is at a similar depth and pressure regime as EOG’s activity in Ohio.”
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