Range Expands in Louisiana with $4.4B Acquisition

FORT WORTH, Texas – Range Resources, a major oil and natural gas driller in the Appalachian region, will pay $3.3 billion to acquire Memorial Resource Development Corp. of Houston, the companies announced the morning.

The all-stock transaction includes Range assuming $1.1 million in MRD’s net debt.

Range has approximately 1 million net acres across Pennsylvania, most of which has stacked pay potential for the Marcellus, Utica and Upper Devonian shale formations, the company says. Range pioneered drilling in the Marcellus shale in 2004 with the Renz #1 well in Washington County, Pa.

Memorial Resource Development Corp.’s leaseholds are concentrated in Lincoln Parish, La., in the Terryville region, which has been producing natural gas since 1954. The company describes these assets of having “extensive production histories, high drilling success rates, and significant horizontal redevelopment potential.”

“This acquisition will give Range strategic positioning in both the Appalachian and Gulf Coast regions, providing greater marketing capabilities and opportunities, with added beneficial exposure to growing natural gas demand, said Jeff Venture, CEO of Range Resources, in a prepared statement.

Under the definitive agreement, MRD shareholders will receive 0.375 shares of Range common stock for each share of MRD common stock held. Based on the Range closing price on May 13, the transaction has an implied value to MRD shareholders of $15.75 per share, representing a 17% premium to the closing price. Following the transaction, shareholders of MRD are expected to own approximately 31% of the outstanding shares of Range, the companies said.

Shares of Range closed at $42.01 Friday, down from more than $90 in June 2014, The Wall Street Journal reports. Memorial Resource Development Corp. closed at $13.45 Friday, down from nearly $30 in September 2014.

The transaction is expected to close in the second half of 2016.

Pictured: A Range Resources well sits atop farmland in Washington County, Pa.

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