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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
August 28, 2003
RANGE RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-9592 34-1312571
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
777 MAIN STREET, SUITE 800
FT. WORTH, TEXAS 76102
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (817) 870-2601
Former name or former address, if changed since last report: Not applicable
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ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
As of January 1, 2003, Range Resources Corporation (the "Company")
adopted Statement of Financial Accounting Standards No. 143 "Asset Retirement
Obligations" ("SFAS 143") which required the Company to recognize an estimated
liability for the plugging and abandonment of its oil and gas wells and
associated pipelines and equipment. Under FAS 143, the Company recognizes a
liability of asset retirement obligations in the period in which they are
incurred, if a reasonable estimate can be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
The adoption of SFAS 143 resulted in (i) an increase of total liabilities
because retirement obligations are required to be recognized, (ii) an increase
in the recognized costs of assets because the retirement costs are added to the
carrying amount of the long-lived asset and (iii) an increase in depletion,
depreciation and amortization expense because of the accretion of the retirement
obligation and increased basis. The majority of the asset retirement obligations
recorded by the Company relate to the plugging and abandonment of oil and gas
wells.
The estimated liability is based on historical experience in plugging
and abandoning wells, estimated remaining lives of those wells based on reserve
estimates, external estimates as to the cost to plug and abandon the wells in
the future, and federal and state regulatory requirements. The liability is
discounted using an assumed credit-adjusted risk-free interest rate of 9%.
Revisions to the liability could occur due to changes in estimates of plugging
and abandonment costs or remaining lives of the wells, or if federal or state
regulators enact new plugging and abandonment requirements.
The adoption of SFAS 143 as of January 1, 2003 resulted in a cumulative
effect gain of $4.5 million (net of income taxes of $2.4 million) or $0.08 per
share which is included in income for the six months ended June 30, 2003. The
adoption resulted in a January 1, 2003 cumulative effect adjustment to record
(i) a $37.3 million increase in the carrying values of proved properties, (ii) a
$21.0 million decrease in accumulated depletion, (iii) a $2.3 million increase
in current plugging and abandonment liabilities, (iv) a $49.1 million increase
in non-current plugging and abandonment liabilities and (v) a $2.4 million
decrease in deferred taxes. The net impact of items (i) through (v) was to
record a gain of $4.5 million, net of tax, as a cumulative effect adjustment of
a change in accounting principle. The pro forma effect of the application of
SFAS 143, as if the statement had been adopted net-of-tax on January 1, 2000
(rather than January 1, 2003), are presented below (in thousands, except per
share data, unaudited). The following table should be read in conjunction with
the Company's latest Form 10-K.
Pro Forma
Year Ended December 31,
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2000 2001 2002
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Net income $ 36,653 $ 17,854 $ 24,535
Earnings per share -Basic $ 0.87 $ 0.36 $ 0.46
-Diluted $ 0.85 $ 0.35 $ 0.45
The pro-forma asset retirement obligation liability balances as if SFAS
143 had been adopted on January 1, 2000 (rather than January 1, 2003) are as
follows (in thousands, unaudited):
Pro Forma
December 31,
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2000 2001 2002
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Pro forma amounts of liability for asset retirement $ 40,758 $ 43,970 $ 48,294
obligation at beginning of year
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RANGE RESOURCES CORPORATION
By: /s/ RODNEY L. WALLER
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Rodney L. Waller
Senior Vice President
Date: August 28, 2003
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