Range Resources Corporation (RRC) | The Buildout — AI Infrastructure
The Verdict
Range Resources is a Fort Worth-based independent producer of natural gas, natural gas liquids, and oil, with principal operations in Pennsylvania's Marcellus Shale. It does not sell GPUs, data-center capacity, power-generation equipment, or AI services. Its role in the AI buildout is indirect: its natural gas can supply gas-fired power generation, including data-center-driven load.
| Market Cap | — |
| Revenue (TTM) | $3.3B |
| Revenue Growth | +19.1% |
| EBITDA Margin (TTM) | 45.0% |
| Net Debt | $1.0B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- 30-plus years of Marcellus inventory across roughly 250 pad sites, with about one-third already re-entered for incremental development.
- Management claims maintenance cost near $0.60/Mcfe to hold 2.6 Bcfe/d; Q2 drilling records include nearly 1,900 frac stages and one 24-hour run above 10,500 feet.
- Marketing structure is differentiated: about 80% of propane/butane is exported from the East Coast, with the majority linked to ARA/FEI, supporting Q1's record $4.41/bbl NGL premium and Q2's $3.49/bbl.
- Balance sheet flexibility is improving: Q1 net debt was $834M at 0.5x leverage, H1 2026 debt reduction was $337M, and management discussed net-cash optionality.
- Capital returns are current and material: H1 2026 buybacks were $105M and dividends were $47M.
What We’re Watching
- NGL premium sustainability: Q1 and Q2 premiums were aided by one-off events, international netbacks normalized since June, and the full-year guide is $2.50/bbl.
- Midstream dependency: the 10-K says the business depends on third-party transportation and NGL processing, and the H2 ramp needs processing volumes by August 2026.
- Power/data-center conversion: no new supply contract was announced on the Q2 call; Fort Cherry, NextEra, and the dozen-plus projects remain dialogue-stage.
- Service-cost inflation: LBRT expects frac pricing to inflect upward in H2 2026, and Range's 2027 maintenance capex of $570–$600M is exposed after 2026 protection.
The core return-focused gas and NGL thesis is intact and modestly strengthening: production and capex guidance held while differential guidance was raised twice, and the balance sheet supports continued returns. The unproven piece is the power/data-center optionality. The open question is whether any dialogue converts into a signed supply contract.
Earnings Beat
Range reported Q2 FY2026 revenue of $833.6M with gross margin of 58.7% and EBITDA of $417.6M, a 50.1% EBITDA margin. Net income was $195.3M. Production averaged 2.3 Bcfe/d, and the NGL premium was $3.49/bbl over Mont Belvieu, below Q1's record $4.41/bbl.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $834M | $1.0B | $700M | +19.2% |
| Gross margin | 58.7% | 63.0% | 35.1% | +2360bps |
| EBITDA | $418M | $522M | $279M | +49.7% |
| EPS | $0.83 | $1.45 | $0.99 | −16.6% |
| Production (Bcfe/d) | 2.3 | 2.2 | n/a | — |
| NGL premium over Mont Belvieu ($/bbl) | 3.49 | 4.41 | n/a | — |
This is a growth company, but it’s a growth company to meet customer demand.— Dennis Degner, CEO, 2026-07-22
Management tone: Across Q1 and Q2 2026 calls, management's tone mixed confidence with discipline. By Q2, growth language became more expansive—management described Range as a growth company and said production above 3 Bcfe/d is a possible scenario—but repeatedly conditioned growth on securing a home for molecules. Management also acknowledged that Q1's record NGL premium benefited from one-off events and that international netbacks normalized since June.
Management Guidance
Management reaffirmed 2026 production and capex guidance on the Q2 call while raising both realization guides. Q3 production is guided to ~2.4 Bcfe/d, with year-end 2026 at 2.5 Bcfe/d and 2027 at ~2.6 Bcfe/d. Full-year 2026 capex remains $650–$700M, and Q4 is expected to return to one rig and one frac crew. NGL full-year guidance was raised to $2.50/bbl over Mont Belvieu, and natural gas guidance was raised to $0.35–$0.40/Mcf versus Henry Hub.
Trajectory
Revenue went from $655.6M in Q3 FY2025 to $787.3M in Q4 FY2025, $1,034.2M in Q1 FY2026, then $833.6M in Q2 FY2026. The code-computed signal labels this an accelerating revenue trajectory, though quarterly results remain commodity-driven. Margins are expanding: gross margin rose from 25.4% in Q3 FY2025 to 63.0% in Q1 FY2026, then 58.7% in Q2, while EBITDA margin reached 50.1% in Q2.
The Model
The model projects FY+1 revenue of $3,790M and EBITDA of $1,766M, a 46.6% EBITDA margin. FY+2 revenue is projected at $4,320M and EBITDA at $2,104M, a 48.7% margin. The near-term projection is anchored by the guided production ramp to 2.5 Bcfe/d at year-end 2026 and ~2.6 Bcfe/d in 2027 plus raised FY2026 natural gas and NGL differential guidance; FY+2 extends further volume and realized-price capture.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $3.0B | $3.8B | $4.3B |
| YoY Growth | — | +26.8% | +14.0% |
| EBITDA | $1.2B | $1.8B | $2.1B |
| EBITDA Margin | 41.2% | 46.6% | 48.7% |
Projections are the median of 5 independent model runs. The model’s revenue sits 17.3% above analyst consensus.
Management reaffirmed 2026 production and capex guidance on the Q2 call while raising both realization guides. Q3 production is guided to ~2.4 Bcfe/d, with year-end 2026 at 2.5 Bcfe/d and 2027 at ~2.6 Bcfe/d. Full-year 2026 capex remains $650–$700M, and Q4 is expected to return to one rig and one frac crew. NGL full-year guidance was raised to $2.50/bbl over Mont Belvieu, and natural gas guidance was raised to $0.35–$0.40/Mcf versus Henry Hub.
What Could Go Right — and Wrong
- A signed power/data-center supply contract beyond the initial 75 MMcf/d Midwest power-plant deal converts optionality into committed demand and could justify a two-rig/two-crew program.
- NGL premiums sustain at or above the $2.50/bbl full-year guide beyond 2026.
- Additional supply commitments from the Midwest power-plant counterparty beyond the initial 75 MMcf/d.
- Export capacity additions—including Repauno in January 2027 and additional LPG capacity—support higher NGL volumes.
- Management formalizes 2028–2030 growth guidance above ~2.6 Bcfe/d.
- NGL premium erodes as European or Asian LPG indices weaken or international netbacks stay normalized.
- Third-party processing or the Repauno terminal slips, delaying the H2 2026 and 2027 volume ramps.
- Service-cost inflation pushes 2027 maintenance capex above $570–$600M.
- PJM interconnection or regulatory delay freezes data-center gas demand, leaving no signed home for growth.
- Price volatility in natural gas and NGLs, which the 10-K explicitly discloses as a risk, reduces revenue and cash flow even with differentials intact.
Looking Ahead
The next 12 months run through the H2 2026 ramp and early 2027 export additions. The August 2026 processing ramp supports Q3's ~2.4 Bcfe/d target; Q4 returns to one rig and one frac crew, with year-end production at 2.5 Bcfe/d. In January 2027, Repauno is scheduled to enter service, adding East Coast waterborne NGL export access. The 2027 target remains ~2.6 Bcfe/d, with capex similar to 2026 absent a larger growth investment.
- August 2026Processing ramp begins — Meaningful incremental volumes expected; supports Q3 ~2.4 Bcfe/d production target.
- Q3 2026Q3 production and differential report — Tests ~2.4 Bcfe/d and realized results against raised full-year differential guides.
- Q4 2026One rig, one frac crew — Capex should look closer to Q1; full-year 2026 capex held at $650–$700M.
- Year-end 2026Exit rate 2.5 Bcfe/d — Confirms H2 infrastructure ramp and DUC harvest supported the production target.
- January 2027Repauno terminal start — Scheduled in service; adds East Coast waterborne NGL export access.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.3B | $3.0B | $3.3B | +27.7% |
| Gross Margin | 23.8% | 34.8% | 47.9% | +1,102bps |
| EBITDA | $706M | $1.2B | $13.4B | +74.4% |
| EBITDA Margin | 30.2% | 41.2% | 45.0% | +1,104bps |
| Net Income | $266M | $658M | $860M | +147.1% |
| Free Cash Flow | $318M | $1.0B | $3.3B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)47.9%
- EBITDA Margin (TTM)45.0%
- Net Margin (TTM)26.0%
- ROIC15.3%
- FCF Conversion78.8%
- SBC / Revenue2.1%
The Company
Range Resources is a Fort Worth-based independent producer of natural gas, natural gas liquids, and oil, with principal operations in the Marcellus Shale in Pennsylvania. Its business combines a large, low-cost upstream position with a marketing and export operation: roughly 80% of propane and butane is exported from the East Coast, with a material portion sold under medium-term contracts linked to European and Asian LPG indices.
Range operates as one segment with a capital-efficient program centered on one base horizontal rig and one contracted electric frac fleet, supplemented by spot activity to harvest DUC inventory. It has roughly 500,000 lateral feet of drilled-uncompleted inventory, 30-plus years of Marcellus inventory across roughly 250 pad sites, and has re-entered about one-third of those sites for incremental development.
Business Segments
Competitive Landscape
The source material does not name direct upstream competitors. Management frames the competitive edge around marketing structure and contract terms, declining to disclose NGL contract details because 'there is some competition in this business, as you’d expect.' Management also says Range's balance-sheet metrics are stronger than investment-grade peers, though it does not name those peers.
Supply Chain
Range sits at the wellhead of the Marcellus and gathers and markets its production into regional power, LNG-linked, and international NGL demand. Supply-chain read-through is mostly inferred from utility and service-provider disclosures; no neighbor names Range directly.
More on RRC: Earnings recap