Jan 16, 2015 3 min read

Range Resources, one of the largest drillers in the Marcellus Shale, announced a reduction of nearly $500 million in its 2015 capital expenditure budget, citing continued decline in commodity prices for natural gas.

The Fort Worth, Texas-based exploration and production company said in a news release distributed after the close of Thursday’s stock market, that its capital spending budget was revised to $870 million, targeting production growth of 20 percent, down from its 24 percent growth in 2014.

In December, Range announced a 2015 spending budget of $1.3 billion, which it said was an 18 percent reduction from its 2014 budget.

Range said nearly 95 percent of its new budget is targeted to the company’s work in the Marcellus Shale. It has its regional headquarters for the Appalachian Basin in Southpointe.

The company said concentration of its operations in the Marcellus, coupled with continuing operating efficiencies and the anticipated cost reductions, allows it to target 20 percent production growth for 2015.

The announcement follows a continued decline in oil prices, caused by OPEC’s decision this fall to refuse to reduce the amount of oil it supplies, despite scant global demand. Oil prices fell by more than 40 percent since October.

A natural gas production glut and lower demand from a mild winter caused a decline in natural gas prices over the last quarter.

The Range announcement also noted it began moving propane into the Mariner East Pipeline in December, which was earlier than originally expected. The pipeline, which carries the fuel to refineries to Marcus Hook in Delaware County, is not fully operational.

Range also announced a multiyear contract to sell ethane of 5,000 barrels per day, half of its existing committed transportation volume, through the ATEX pipeline.

Jeff Ventura, chief executive officer for Range, said the company is well positioned to compete in the current market, citing a large, high quality asset base, low cost structure and a strong financial position.

Range’s announcement was followed Friday with a report the number of rigs drilling for oil and gas in the United States continued to fall.

Oilfield services company Baker Hughes Inc. said this week’s rig count plunged by 74 to 1,676 units.

The Houston firm said Friday 1,366 rigs were exploring for oil and 310 for gas. A year ago, 1,777 rigs were active.

Of the major oil- and gas-producing states, Texas’ count dove by 44, North Dakota dropped six, Oklahoma fell five, California and Wyoming each lost four and New Mexico declined by three. Arkansas, Kansas and West Virginia were down two each and Colorado, Louisiana and Utah were off one apiece.

Ohio gained one rig.

Alaska and Pennsylvania were unchanged.