Penn Hills native to head Range Resources
A Penn Hills native will be the new leader of one of the biggest Marcellus shale companies, but don't expect that to bring any special benefits to the region, an industry expert said Monday.
Texas-based Range Resources Corp., third-largest landholder in the Appalachian gas field, will promote its president and chief operating officer, Jeffrey Ventura, 53, to chief executive officer, it announced yesterday. The transition is effective Jan. 1 for the company, which has offices in Cecil and more than 300 Pennsylvania employees.
"Aside from the PR, there is little local residents get out of this," Kent Moors, director of Duquesne University's Energy Policy Research Group, wrote in an e-mail. "He will need to deliver on the bottom line."
To do that, he's got to compete with multibillion-dollar international companies that bought into the region while natural gas futures prices are lingering at lower than $4.40 per million Btus. But Ventura and the current CEO, John H. Pinkerton, deflected questions about those challenges in an interview Monday, saying they have the resources and staff to compete, and a strong position in the Marcellus.
The company last month sold its properties in the Barnett shale in Texas, raising about $900 million to focus on developing its operations in the Marcellus, a gas-rich layer of earth stretching from Kentucky to New York. Industry officials and analysts have touted it as one of the country's most profitable shale fields, with break-even prices ranging from $3 to $4.50 per million cubic feet.
Range has leased nearly 800,000 acres of land in the Marcellus. In the years after starting with the company in 2003, Ventura oversaw Range's investment in the formation before it was successfully tapped. It was part of a strategy to find low-risk sources that would yield steady production, and it will help Range's gas reserves increase tenfold, he said.
"We've got a great position in (the Marcellus), so the dollars we're investing we get a strong return for," Ventura said. "We've got cash carrying over from the Barnett, so I think we're in good shape."
The company lost $25 million, or 16 cents a share, in the first quarter, compared with a $77 million profit, or 48 cents a share, in the same quarter last year.
Its stock has dropped about $4 since it announced those numbers, and an additional 22 cents after yesterday's announcement of the executive transition plan, to $52.06 a share. It is still up nearly 3 percent for the year and more than 93 percent since 2006.
The transition plan had been in the works for several years, said Pinkerton, comparing himself to a football coach who simply wanted to step aside from a high-pressure job. He'll be the company's executive chairman, he said.
The company's planning to hire more workers, despite the likes of Exxon Mobil, Shell and Chevron moving in and recent claims that shale formations may not be as bountiful as predicted, he added.
"We've got the biggest team, we've got the most experience. And we're a big enough company and can raise enough capital that we can compete head on with them. And we plan to," Pinkerton said.
"There were people who didn't think computers were going to work either, or that people weren't going to be able to go to the moon. The biggest gas fields in the world right now are all shale plays."
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