RANGE RESOURCES CORP (RRC)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview of Our Business

We are an independent natural gas, natural gas liquids and oil company engaged in the exploration, development and acquisition of natural gas, NGLs and oil properties in the Appalachian region of the United States. We operate in one segment and have a single company-wide management team that administers all properties as a whole rather than by discrete operating segments. We measure financial performance as a single enterprise and not on a geographical or an area-by-area basis.

Our overarching business objective is to build stockholder value through returns-focused development of properties. Our strategy to achieve our business objective is to generate consistent cash flows from reserves and production through internally generated drilling projects occasionally coupled with complementary acquisitions and divestitures. Currently, our investment portfolio is focused on high-quality natural gas and NGLs assets in the Commonwealth of Pennsylvania. Our revenues, profitability and future growth depend substantially on prevailing prices for natural gas, NGLs and oil and on our ability to economically find, develop, acquire, produce and sell these reserves.

Commodity prices have been and are expected to remain volatile. We believe we are well-positioned to manage challenges that could occur during price variations and that we can endure the continued fluctuations in current and future commodity prices by:

•
exercising discipline in our capital investments;

•
maintaining a competitive cost structure;

•
diversifying sales outlets;

•
managing price risk through the partial hedging of our production;

•
maintaining a strong balance sheet; and

•
optimizing drilling, completion and operational efficiencies.

Prices for natural gas, NGLs and oil fluctuate widely and affect:

•
our revenues, profitability and cash flow;

•
the amount of cash flow available to us for reinvestment or return to our stockholders;

•
the quantity of natural gas, NGLs and oil that we can economically produce;

•
the quantity of natural gas, NGLs and oil shown as proved reserves; and

•
our ability to borrow and raise additional capital, if needed.

We prepare our financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect our reported results of operations and the amount of our reported assets, liabilities and proved reserves. We use the successful efforts method of accounting for our natural gas, NGLs and oil activities. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the preceding consolidated financial statements and notes in Item 1.

Market Conditions

We believe we are positioned for sustainable long-term success. We continue to monitor the impact of the actions of OPEC and other large hydrocarbon producing nations; the Russia-Ukraine war; military action in the Middle East and flows of energy commodities through the Strait of Hormuz; global inventories of natural gas, NGLs and oil; future U.S. infrastructure investment; future monetary and fiscal policy; tariffs and their impacts on global trade and energy demand; and governmental policies aimed at the energy sector, including those focused on transitioning towards lower carbon energy. We expect prices for the commodities we produce to remain volatile given the complex dynamics of supply and demand that exist in the global energy markets. In first six months 2026, average natural gas prices increased primarily due to increased demand from winter weather and liquefied natural gas ("LNG") export growth. Longer-term natural gas futures prices remain constructive based on market expectations of continued LNG export expansion and increasing global power demand, while associated gas-related activity in oil basins and dry gas basin activity are expected to show modest rates of growth due to infrastructure constraints, moderated reinvestment rates and inventory deterioration. In addition, the global energy shortage experienced in recent years and geopolitical disruptions of energy flows from key producing regions further highlighted the need for affordable and reliable fuel sources, supporting continued strong structural demand growth for U.S. LNG exports, as well as domestic electricity generation. Other factors such as supply chain disruptions, cost inflation, concerns over a potential economic recession and the pace of changes in global monetary policy may impact global demand for natural gas, NGLs and oil. We continue to assess and monitor the impact of these factors on our business and operations.

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Benchmarks decreased for natural gas and increased for NGLs and oil in second quarter 2026 when compared to the same period of the prior year. Benchmarks increased for natural gas and oil and decreased for NGLs in first six months 2026 when compared to the same period of the prior year.

The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the three and six months ended June 30, 2026 and 2025:

(a)
Based on weighted average of bid week prompt month prices on the New York Mercantile Exchange ("NYMEX").

(b)
Based on our estimated NGLs product composition per barrel.

Prices for natural gas, NGLs and oil that we produce significantly impact our revenues and cash flows. Our price realizations (not including the impact of our derivatives) may differ from these benchmarks for many reasons, including quality, location or production being sold at different indices.

Consolidated Results of Operations

Overview of Second Quarter 2026 Results

In second quarter 2026, we experienced an increase in revenue from the sale of natural gas, NGLs and oil compared to the same quarter of 2025, due to a 2% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) combined with a 5% increase in total production.

During second quarter 2026, we recognized net income of $195.3 million, or $0.83 per diluted common share compared to net income of $237.6 million, or $0.99 per diluted common share during second quarter 2025. The lower net income in second quarter 2026 compared to second quarter 2025 is primarily due to lower derivative fair value income.

Our second quarter 2026 financial and operating performance included the following results:

•
revenue from the sale of natural gas, NGLs and oil increased 5% from the same period of 2025 due to a 1% increase in average realized prices (before cash settlements on our derivatives) combined with a 5% increase in production volumes;

•
revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 6% from the same period of 2025;

•
direct operating expense per mcfe increased to $0.13 during second quarter 2026 compared to $0.11 during the same period of 2025, primarily due to higher water hauling, labor costs and workovers;

•
transportation, gathering, processing and compression per mcfe remained flat at $1.52 in second quarter 2026 compared to the same period of 2025;

•
general and administrative expense per mcfe increased to $0.23 in second quarter 2026 compared to $0.21 in the same period of 2025, primarily due to higher employee-related costs and legal expense; and

•
interest expense per mcfe decreased 46% from the same period of 2025 due to lower debt balances and lower interest rates.

Second quarter 2026 also included the following returns of capital and balance sheet highlights:

•
repurchased $78.4 million (2.0 million shares) of our common stock;

•
paid $23.6 million of dividends, an 11% higher dividend of $0.10 per share compared to $0.09 per share in the same period of 2025; and

•
maintained substantial liquidity with $1.5 billion available under our credit facility.

We generated $235.0 million of cash from operating activities in second quarter 2026, a decrease of $101.2 million from second quarter 2025, primarily due to timing and working capital changes.

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Overview of First Six Months 2026 Results

In first six months 2026, we experienced an increase in revenue from the sale of natural gas, NGLs and oil compared to the same period of 2025 due to a 17% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) and a 2% increase in total production.

During first six months 2026, we recognized net income of $537.0 million, or $2.27 per diluted common share compared to net income of $334.6 million, or $1.39 per diluted common share during the same period 2025. The higher net income in first six months 2026 compared to first six months 2025 is primarily due to increased realized prices combined with an increase in production.

Our first six months 2026 financial and operating performance included the following results:

•
revenue from the sale of natural gas, NGLs and oil increased 17% from the same period of 2025 due to a 15% increase in average realized prices (before cash settlements on our derivatives) combined with a 2% increase in production volumes;

•
revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 14% from the same period of 2025;

•
direct operating expense per mcfe increased to $0.14 in first six months 2026 compared to $0.12 the same period of 2025, primarily due to higher water hauling, labor costs and workovers;

•
transportation, gathering, processing and compression per mcfe increased to $1.57 in first six months 2026 compared to $1.53 in the same period of 2025, primarily due to an increase in processing and electricity costs;

•
general and administrative expense per mcfe increased to $0.23 in first six months 2026 compared to $0.21 in the same period of 2025, primarily due to higher employee-related costs, software costs and legal expense; and

•
interest expense per mcfe decreased 43% from the same period of 2025 due to lower debt balances and lower interest rates.

First six months 2026 also included the following returns of capital and balance sheet highlights:

•
repurchased $105.5 million (2.8 million shares) of our common stock;

•
paid $47.5 million of dividends, increasing per share dividend by 11% to a cumulative $0.20 per share compared to $0.18 per share in the same period of 2025;

•
reduced our higher interest rate debt by redeeming $600 million principal balance of our 8.25% senior notes due 2029 by utilizing borrowings under the credit facility, while retaining $1.5 billion in available liquidity under our credit facility.

We generated $854.2 million of cash from operating activities in first six months 2026, an increase of $187.9 million from first six months 2025, which reflects the impact of higher realized prices.

Natural Gas, NGLs and Oil Sales, Production and Realized Price Calculations

Our revenues vary primarily as a result of changes in realized commodity prices and production volumes. Our revenues are generally recognized when control of the product is transferred to the customer and collectability is reasonably assured. The following table illustrates the primary components of natural gas, NGLs and oil sales for the three and six months ended June 30, 2026 and 2025 (in thousands):

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to assist you in understanding our business and results of operations together with our present financial condition and should be read in conjunction with the information under Item 8. Financial Statements and Supplementary Data and other financial information found elsewhere in this Form 10-K. See also matters referenced in the foregoing pages under "Disclosures Regarding Forward-Looking Statements."

The following tables and discussions set forth key operating and financial data for the years ended December 31, 2025 and 2024. For similar discussions of the year ended December 31, 2024 compared to December 31, 2023 results, refer to Item 7. Managements’ Discussion and Analysis of Financial Condition and Results of Operations under Part II of our annual report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 25, 2025.

Overview of Our Business

We are an independent natural gas, NGLs and oil company engaged in the exploration, development and acquisition of natural gas, NGLs and oil properties located in the Appalachian region of the United States. We operate in one segment and have a single company-wide management team that administers all properties as a whole rather than by discrete operating segments. We measure financial performance as a single enterprise and not on an area-by-area basis.

Our overarching business objective is to build stockholder value through returns-focused development of natural gas, NGLs and oil properties. Our strategy to achieve our business objective is to generate consistent cash flows from reserves and production through internally generated drilling projects occasionally coupled with complementary acquisitions and divestitures. Currently, our investment portfolio is focused on high quality natural gas and NGLs assets in the Commonwealth of Pennsylvania. Our revenues, profitability and future growth depend substantially on prevailing prices for natural gas, NGLs and oil and on our ability to economically find, develop, acquire, produce and sell these reserves.

Commodity prices have been and are expected to remain volatile. We believe we are well-positioned to manage any challenges that could occur during price variations and that we can endure the continued fluctuations in current and future commodity prices by:

•
exercising discipline in our capital investments;

•
maintaining a competitive cost structure;

•
diversifying sales outlets;

•
managing price risk through partial hedging of our production;

•
maintaining a strong balance sheet; and

•
optimizing drilling, completion and operational efficiencies.

Prices for natural gas, NGLs, and oil fluctuate widely and affect:

•
our revenues, profitability and cash flow;

•
the amount of cash flow available to us for reinvestment or return to our stockholders;

•
the quantity of natural gas, NGLs and oil that we can economically produce;

•
the quantity of natural gas, NGLs and oil shown as proved reserves; and

•
our ability to borrow and raise additional capital, if needed.

We prepare our financial statements in conformity with U.S. GAAP, which require us to make estimates and assumptions that affect our reported results of operations and the amount of our reported assets, liabilities and proved natural gas, NGLs and oil reserves. We use the successful efforts method of accounting for our natural gas, NGLs and oil activities.

Outlook for 2026

As we enter 2026, we believe we are positioned for sustainable long-term success. For 2026, we expect our capital budget to be in the range of $650 million to $700 million for natural gas, NGLs and oil related activities, excluding any potential acquisitions, for which we do not budget. As has been our historical practice, we will periodically review our capital expenditures throughout the year and may adjust the budget based on commodity prices, drilling success and other factors. We expect our 2026 capital budget to achieve modest growth in production relative to 2025 production, while also supporting our longer-term operational plans. Our 2026 capital budget is focused on generating free cash flow while efficiently developing our resource base to achieve competitive full cycle

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returns for our stockholders. The prices we receive for our natural gas, NGLs and oil production are largely based on current market prices, which are beyond our control. The price risk on a portion of our forecasted natural gas, NGLs and oil production for 2026 is partially mitigated by entering into commodity derivative contracts, and we intend to continue to enter into these types of contracts. We believe it is likely that commodity prices will continue to be volatile during 2026.

Market Conditions

We continue to monitor the impact of the actions of OPEC and other large producing nations, the Russia-Ukraine conflict, tensions in the Middle East, global inventories of natural gas, NGLs and oil, future U.S infrastructure investment, future monetary and fiscal policy, tariffs and their impacts on global trade and energy demand and governmental policies aimed at transitioning towards lower carbon energy. We expect prices for commodities we produce to remain volatile given the complex dynamics of supply and demand that exist in the global energy markets. During 2025, natural gas prices increased primarily due to increased exports from new U.S. LNG export facilities. Longer term natural gas futures prices remain constructive based on market expectations that associated gas-related activity in oil basins and dry gas basin activity will show modest rates of growth due to infrastructure constraints, moderated reinvestment rates and core inventory exhaustion. In addition, the global energy shortage experienced in recent years further highlighted the need for affordable and reliable fuel sources, supporting continued strong structural demand growth for United States LNG exports, as well as domestic electricity generation. Other factors such as geopolitical disruptions, supply chain disruptions, cost inflation, concerns over a potential economic recession and the pace and changes in global monetary policy may impact global demand for natural gas, NGLs and oil. We continue to assess and monitor the impact and consequences of these factors on our business and operations.

Benchmarks for natural gas increased in 2025 compared to 2024, while NGLs slightly decreased. As a result, we have experienced increases in our price realizations in 2025. Recently, benchmark natural gas prices have increased further compared to the fourth quarter 2025, with the average NYMEX monthly settlement price for natural gas increasing to $4.69 per mcf for January 2026 and $7.46 for February 2026 settlement following winter weather. The following table lists related benchmarks for natural gas, oil and NGLs composite prices for the years ended December 31, 2025 and 2024.

(a)
Based on average of monthly last day settlement prices on the New York Mercantile Exchange ("NYMEX").

(b)
Based on our estimated NGLs product composition per barrel.

Prices for various quantities of natural gas, NGLs and oil that we produce significantly impact our revenues and cash flows. Our price realizations (not including the impact of our derivatives) may differ from the benchmarks for many reasons, including quality, location, or production being sold at different prices.

Management’s Discussion and Analysis of Results of Operations

Overview of 2025 Results

For the year ended December 31, 2025, we experienced an increase in revenue from the sale of natural gas, NGLs and oil due to a 14% increase in net realized prices (average prices including all derivative settlements and third-party transportation costs paid by us) compared to 2024. Daily production in 2025 averaged 2.24 Bcfe compared to 2.18 Bcfe in 2024.

During 2025, we recognized net income of $658.0 million, or $2.74 per diluted common share compared to $266.3 million, or $1.09 per diluted common share during 2024. The increase in net income for the year ended December 31, 2025 compared to 2024 is primarily due to higher realized prices combined with slightly higher production.

During 2025, our financial and operating performance included the following results:

•
revenue from the sale of natural gas, NGLs and oil increased 27% from the same period of 2024 with a 24% increase in average realized prices (before cash settlements on our derivatives) combined with a 2% increase in production volumes;

•
revenue from the sale of natural gas, NGLs and oil (including cash settlements on our derivatives) increased 11% from the same period of 2024;

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•
transportation, gathering, processing and compression expense per mcfe was $1.50 in 2025 compared to $1.48 in the same period of 2024 primarily due to the increase of electricity costs and FERC rates;

•
direct operating expense per mcfe increased to $0.13 in 2025 compared to $0.12 in the same period of 2024 due to an increase in workover costs;

•
general and administrative expense per mcfe for 2025 remained the same at $0.22 compared to the same period of 2024;

•
interest expense per mcfe for 2025 decreased 13% from the same period of 2024 due to lower debt balances;

•
our DD&A rate per mcfe for 2025 remained the same compared to the same period of 2024;

•
drilled and completed 53 net wells with a 100% success rate;

The year ended December 31, 2025 also included the following returns of capital and balance sheet highlights:

•
paid $85.7 million in dividends, increasing per share dividend by 12.5% to an annual $0.36 per common share compared to $0.32 per common share in 2024;

•
repurchased $230.6 million of our common stock compared to $65.3 million in 2024;

•
repurchased in the open market $2.2 million principal amount of our 4.875% senior notes due 2025 at a discount and repaid the remaining $606.5 million principal balance of our 4.875% senior notes due 2025 at par by utilizing cash on hand and borrowing on our credit facility;

•
maintained substantial liquidity with the accumulation of cash on hand of $204,000 along with $1.7 billion available under our credit facility;

•
enabled longer laterals and enhanced efficiency through continued selective acreage leasing and lease renewals to consolidate our acreage positions in the Marcellus Shale play in Pennsylvania by investing $51.8 million to acquire unproved acreage; and

•
our capital investment for 2025 was $673.8 million, which was within our announced range of $650.0 million to $690.0 million.

We generated $1.2 billion of cash from operating activities in 2025, which is $226.8 million higher compared to 2024 and reflects higher realized prices and higher production volumes.

The year ended December 31, 2025 also included the following highlights that emphasized our corporate sustainability initiatives:

•
expanded "A" grade MiQ certification to include all Pennsylvania production;

•
maintained net zero scope 1 and 2 GHG emissions through direct emissions reductions and verified carbon credits;

•
continued to recycle approximately 100% of our flowback and produced water generated from our operations; and

•
expanded the installation and use of compressed air pneumatic controllers.

Natural Gas, NGLs and Oil Sales, Production and Realized Price Calculations

Our revenues vary from year-to-year as a result of changes in realized commodity prices and production volumes. The following table illustrates the primary components of natural gas, NGLs and oil sales for the

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]