History
Range Resources swapped Permian assets for Appalachian ones, refinanced its debt, bought Memorial Resource Development in an all-stock deal, then answered activist pressure and a costly credit squeeze.
2014-2015: Trading Texas for Appalachia
The record opens in June 2014, when Range closed a swap of its Conger, Texas assets in the Permian Basin for producing properties in Virginia plus $145 million in cash from a subsidiary of EQT Corporation. The trade moved the company away from Permian exposure and toward Appalachian-region assets.
In May 2015 Range turned to its debt. It priced and completed a $750 million offering of 4.875% senior notes due 2025, using the money to pay down its bank credit facility and then refinance its 6.75% notes due 2020. The result was a lower interest rate and a longer maturity. Share numbers in this period rose only modestly, from about 161 million at the end of 2011 to about 169 million by the end of 2015.
2016: The Memorial merger
The biggest change came in 2016. In May Range agreed to buy Memorial Resource Development (MRD) in an all-stock deal, paying 0.375 Range shares for each MRD share. The deal gave Range a position in the Terryville area of North Louisiana, in the Cotton Valley and Haynesville gas plays. Range filed its registration paperwork in June.
The filings flagged two concerns. A Memorial shareholder filed a class action over the merger in July. MRD Holdco, which held about 36% of Memorial, planned to distribute roughly 26% of Memorial's shares to some 500 limited partners before completion, and the Range shares they received would have no lock-up, which raised the possibility of selling pressure.
In August Range settled with activist investor SailingStone Capital Partners. The two agreed to pick a new independent director with an oil-and-gas engineering background, Range adopted a shareholder engagement policy, and new performance criteria were added to incentive pay.
On 10 August Range sent out the final proxy and called a shareholder meeting for 15 September. The merger was valued at about $3.2 billion at 13 May prices. Existing Range holders were to own about 69% afterwards and Memorial holders about 31%.
The merger closed on 16 September 2016 after approval of more than 99%. Range issued 77,042,749 new shares, which took the share count from about 169 million to about 247 million by year end. MRD director Robert Innamorati joined a ten-member board.
2017-2019: Activist pressure
The record is quiet on the business itself for 2017, but in July 2018 Range reached a second, tougher agreement with SailingStone, by then holding about 17% of the stock. It called for two new independent directors, a board capped at nine members, and separate people holding the Chairman and CEO roles.
2020-2022: Costly debt, then relief
In January 2020 Range priced $550 million of 9.25% senior notes due 2026, nearly double the coupon on its 2015 notes, to fund tender offers retiring its 2021 and 2022 notes. This reflected a much tougher credit market.
In February 2021 Range said it would restate its first three 2020 quarters for a deferred-tax accounting error tied to CARES Act tax law changes. It also disclosed a related material weakness in its internal controls. The error did not affect cash flows.
By January 2022 conditions had improved with stronger gas prices. Range priced $500 million of 4.750% senior notes due 2030 and on 1 February 2022 used them to redeem all of its 9.25% notes due 2026, roughly halving the interest rate on that debt.
Written from the 14 story beats below (2014 to 1 Feb 2022), which come from the company's own announcements and filings.