Range Resources

Range Resources Corp.

Company type	Public (NYSE: RRC)
Industry	Independent oil and gas exploration and production
Founded	1976
Headquarters	Fort Worth, Texas, USA
Key people	John H. Pinkerton, Chairman/CEO Jeffrey L. Ventura, President/COO Ray Walker, Vice President Matt Pitzarella, spokesman
Revenue	$907 million USD (2009)
Operating income	$59 million USD (2009)
Net income	($54)million USD (2009)
Number of employees	787 (2009)b
Website	http://www.rangeresources.com

Range Resources is a Texas-based natural gas company mainly engaged in the fracking and well drilling of shale gas contained in the Marcellus Formation in the Eastern United States. The company was first to devise techniques for extracting gas from the Marcellus Shale, through the use of test wells in Mount Pleasant, Pennsylvania. Because much of the Marcellus Shale lies under rural but significantly-populated areas, the company routinely purchases leases from small homeowners for the rights to drill on their land. They have over $1 billion USD invested in southwestern Pennsylvania, while it also has operations in the Southwestern United States. Founded in 1976 and headquartered at Fort Worth, Texas, its current CEO is John Pinkerton and its current COO and president is Jeffrey Ventura.

History

Range Resources traces its roots to Lomak Petroleum, which was based in Hartville, Ohio in 1976, and drilled wells in eastern Ohio. In 1992, it moved its headquarters to Fort Worth and merged in 1998 with Domain Energy Corp. to become its present form. It also participated in a joint venture with FirstEnergy called Great Lakes Energy Partners LLC which it bought out in 2004 to form the subsidiary Range Resources Appalachia LLC.

Before its major expansion into the Marcellus Shale, Range Resources only held a small position in the Texas Barnett Shale and 9000 "worn-out gas wells across the Appalachian basin that had been producing for 25 years". However, geologist William Zagorski, who worked for the company, used the knowledge of fracking gained working in the Barnett Shale (pioneered in the region by Mitchell Energy) to attempt fracking in Appalachia, where according Ventura, "it worked on the first try". The first test used a vertical drill, but Range Resources built three horizontal test wells in 2005 (in Mount Pleasant) and bought $200 million USD worth of land in 2007. The company had spent less than $1000 per acre on average to acquire land suitable for drilling, compared to larger traditional oil and gas players who joined the exploration rush late in the game who had "recent deals primed at $14,000 an acre".

In 2010, Forbes called Range Resources "King of the Marcellus Shale" with an enterprise value of $8 billion USD, suggesting that its position should attract energy investors scared by offshore drilling's unlimited liabilities, as shown by the Deepwater Horizon oil spill. It suggested that after factoring Range's profitable use of land acquisitions, a true value could be closer to $20 billion USD.

Environmental record

However, Forbes also suggested Range may suffer if public "paranoia" against fracking activities eventually "takes hold".

In June 2010 a Range Resources well being drilled by EOG Resources suffered a blowout that took a day to control; a West Virginia Range Resources well (being drilled by Chief Oil & Gas) suffered a seven-day fire and an explosion that injured seven workers. Pennsylvania temporarily banned EOG from drilling and fracking, and ordered the plugging of three boreholes in the Marcellus shale after complaints about water well pollution from gas and fracking fluids.

Investigative reports by This American Life and New York Times investigated the company, using operations in Amwell Township and Mount Pleasant as case studies. Journalists Eliza Griswold and Sarah Koenig found water pollution and air pollution of lease-held land to be an endemic problem. Problems included residents complaining of black running water that corroded faucets and household machinery, showers smelling of "rotten eggs" (hydrogen sulfide) and diarrhea, "mysterious stomach pains", extreme fatigue or anemia. Medical tests of residents complaining of headaches, nosebleeds and the inability to concentrate showed elevated blood levels of industrial organic solvents and heavy metals such as toluene and arsenic. When presented with such complaints, Range Resources generally would not find anything wrong with residents' drinking water, arguing their labs' test results show that residents' complaints of illness and dying animals may have causes other than poisoning or pollution. CEO Pinkerton nevertheless remains convinced about the safety of fracking: "You just have to be careful when drilling through layers with water."

One resident in Amwell was riding her horse behind Range Resources' chemical pond for holding fracking flowback when she encountered "a hissing and bubbling sound in the stream" and a "red foamy oil slick" that caused the stream to exhibit "rainbow water". Range maintained that it was likely caused by "decayed vegetation that gave off gas", having attributed previous complaints of malodor to harmless anaerobic bacteria that grew near their fluid compressor stations. However chemical tests of the area later "revealed the presence of acetone, toluene, benzene, phenol, arsenic, barium, heavy metals and methane".

Sanctions

Range Resources has paid $219,875 in fines to the Commonwealth of Pennsylvania as of May 2010. The bulk was $141,175 levied for a fracking fluid spill that killed aquatic life in Washington County's Brush Creek — protected by the state as a "high-quality waterway") — according to the Pittsburgh Business Times. However, Ray Walker, vice president, said that Range Resources has "made a lot of adjustments since then". The fluid spill was due to a "faulty elbow pipe"; according to Walker, Range has since "gone to a completely different pipe manufacturer and a completely different pipe design". Firings and changed procedures also followed the incident.

Public relations

Range Resources has sponsored public relations campaigns supporting permitted use zoning regulations rather than conditional use regulations, which could permit citizen review of Range's activities near their land or neighbourhoods. According to NPR, the campaigns sometimes are thinly-veiled coercion. "Mount Pleasant and its three citizen supervisors were ridiculously outmanned...in [an ensuing] full-scale PR war" with Range Resources when the supervisors decided to follow conditional use zoning policy used in other states such as Texas, Colorado and Wyoming. Through letters to citizens, Range threatened to cut off funding to the township if the township refused to support permitted use zoning for Range. Other opposing townships have also been sued by Range Resources over zoning policies.

On November 8 2011, CNBC reported on a conference which Range Resources attended, in which those in the energy industry were advised to "download the US Army / Marine Corps Counterinsurgency Manual, because we are dealing with an insurgency".

In the conference, Range Resources spokesman Matt Pitzarella also said that Range had "several former psy ops folks...[who are] very comfortable in dealing with localized issues and local governments. Really all they do is spend most of their time helping folks develop local ordinances and things like that. But very much having that understanding of psy ops in the Army and in the Middle East has applied very helpfully here for us in Pennsylvania." Pitzarella later clarified that he meant to refer to "one employee of the firm", whose psy ops background made him adept at handling emotionally-charged township meetings. However, Sharon Wilson, the recorder of the remarks, said "the comments reveal what the fracking industry thinks about people in the communities that are impacted by the industry."

"My Range Resources"

As part of an effort to reassure the public of its activities, Range Resources has started a campaign, "My Range Resources" which depict "ordinary people... who have benefited from allowing drilling on their land". The ad campaign includes, in the words of one Centre Daily Times journalist Bob Myers, "real Pennsylvanians talking earnestly about the wonderful experiences they’ve had with Range Resources".

According to Elwin Green of the Pittsburgh Post-Gazette, Range Resources stands out because most gas companies generally prefer to keep a low profile, preferring to "tout their successes to Wall Street, but not to Main Street". In contrast, Range Resources' campaign uses testimonials such as, "Natural gas has been ... a godsend to this area," from farmers or "In the last two years, probably 60 percent of our business is natural gas," from local business owners. Vice president Ray Walker was quoted as saying, "A lot of people don't know much about our industry or about Range Resources...we're committed to being the very best that we can be. We want to be accountable, transparent and accessible to people." Videos produced by public relations firms Big Picture Communications and Downtown's Animal Inc. used "unscripted video and purposely avoided using company spokespeople". Blake Lewis, CEO of Lewis Public Relations in Dallas and a board member of the Public Relations Society of America gave Range Resources' website "high marks".

However, journalists' reactions been skeptical or mixed. According to Myers, "a quick review of the state Department of Environmental Protection records suggests that the truth is more complicated than the ads suggest...the folks at Range define good stewardship in a slightly different manner than is customary." Reg Henry of the Nashua Telegraph thought "the whole promotion was skin crawling... but now I read MyRangeResources and I think: How cute is that for a gas drilling company? It makes me think of my daughter’s My Little Pony when she was a mite".