Welcome to the Range Resources Second Quarter 2012 Conference Call. This call is being recorded. [Operator Instructions] Statements contained in this conference call that are not historical facts are forward-looking statements. Such statements are subject to risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements. [Operator Instructions] At this time I would like to turn the call over to Mr. Rodney Waller, Senior Vice President of Range Resources. Please go ahead, sir.

Thank you, operator. Good morning and welcome. Range reported outstanding results for the second quarter with a continued increase in production and a decrease in unit cost. Both earnings and cash flow per share results were greater than First Call consensus. Our speakers on the call today are Jeff Ventura, President, Chief Executive Officer; Ray Walker, Senior Vice President and Chief Operating Officer; and Roger Manny, Executive Vice President and Chief Financial Officer. Also, Mr. Pinkerton, our Executive Chairman, is on the call today. Range did file our 10-Q with the SEC this morning, now available on the homepage of our website, or you can access it using the SEC's EDGAR system. In addition we posted on our website supplemental tables, which will guide you in the calculation of the non-GAAP measures of cash flow, EBITDAX, cash margins and the reconciliation of our adjusted non-GAAP earnings to reported earnings that are discussed. We have also added tables, which will guide you in modeling our future realized prices for natural gas, crude oil and natural gas liquids. Detailed information of our current hedge positions by quarter is also available on the website. Now let me turn the call over to Jeff.

Thank you, Rodney. I'll begin with an overview of the quarter. Ray will follow with an operations update, and Roger will be next with a discussion of our financial position. Then we'll open it up for Q&A. Range is on track to achieve the targets that were set for 2012 for overall production growth and capital spending. Our capital expenditure budget for 2012 was on track and remains unchanged. Our production growth target of 30% to 35% now has moved to the high side of the range and is 35%. Our exit rate for the Marcellus should be 600 million cubic feet equivalent per day or greater. Our liquids production growth target was delayed to permitting issues. However, we expect for the fourth quarter that liquids growth will be 40% versus the fourth quarter of 2011. On the costs side, our teams are doing an excellent job and costs are coming in better than expectations. LOE per Mcfe continues to decline dramatically from $0.60 per Mcfe in 2011 to $0.48 in the first quarter of 2012 and $0.40 in the second quarter of 2012. Our total cash cost per Mcfe is also following the same downward trend from $2.61 in 2011 to $2.50 in the first quarter of 2012 and finally, to $2.38 per Mcfe in the second quarter of 2012. Our DD&A per Mcfe has also been reduced from $1.80 per Mcfe in 2011 to $1.67 in the first 6 months of 2012. These are both very impressive numbers and a very impressive trend. Our teams are also making important progress on the marketing side of our business. We continue to negotiate on the third ethane solution and we believe we are close to finalizing the deal. In addition, we're well-hedged for the remainder of 2012 and '13 for…

Thanks, Jeff. Today I'm going to talk about production, efficiency improvements and give some additional highlights on our activity. Let me start with production. We exceeded our second quarter production guidance, coming in well above guidance on gas and oil but lower-than-expected NGL production. The lower NGL growth was primarily due to permitting delays for pipelines and string crossings in Pennsylvania. The good news is these permitting issues have been resolved by overcoming the residual impacts of the policies that were left over from the previous administration. We give a lot of credit to DEP leadership in Harrisburg for recognizing and then resolving these issues. We can now plan more effectively and we do not anticipate these permitting delays in the future. As a result, we fully expect to see substantial growth going forward as those delayed pads begin to come online. By the end of this year, we expect to reach 40% liquids growth when comparing the fourth quarter of 2012 to the fourth quarter of 2011. Because of the delays, we will not hit our 40% full year over full year target, but we are back on track for impressive quarterly liquids growth. Guidance for the third quarter production will be 773 to 778 million cubic feet equivalent per day comprised of NGLs at 18,300 to 18,600 barrels per day, oil at 7,600 to 7,800 barrels per day and gas at 618 million to 620 million cubic feet per day. In addition to our record production, another key story I want to tell is how we're significantly improving efficiencies and costs while delivering better well results all across the company. Let me give you just a few of the many examples that we're seeing. In the Southern Marcellus, we've seen a 23% decrease in cost per foot drilled…

Thanks, Ray. Like last quarter there are significant positive developments to discuss on both the income statement and balance sheet. The big income statement story is our continued progress in reducing operating and overhead costs without sacrificing per share growth in production and reserves. This was a great quarter where most of the recurring cost items all came in at or below guidance, and in some cases, significantly below guidance. Leading off with direct operating cost, the operating teams exceeded all expectations, with direct operating costs, including workovers, coming in at $0.40 per mcfe, that's $0.25 per mcfe below last year due to reduced water handling, equipment rental and well service expense. To help put this in perspective, on an absolute dollar basis, we spent $3.7 million less in direct operating expense during the second quarter this year compared to last year on 42% higher production volume. You're now seeing the benefits of focused growth from a continually high-graded asset base by employee shareholders who understand what is required of them in a low price environment. As we had additional oil and liquids rich production the rest of the year, absolute operating costs are expected to increase slightly with production and unit costs will likely also increase slightly. Next quarter, we believe we will see operating expense in the range from $0.42 to $0.44 in Mcfe. Third party transportation gathering and compression expense for the second quarter was $0.68 per mcfe, the same as the first quarter this year and $0.02 higher than the second quarter last year. We anticipate this expense to decline slightly on higher volume next quarter to between $0.63 and $0.65. Second quarter DD&A rate was $1.66 per Mcfe, slightly below guidance and $0.03 lower than the second quarter of last year due to changes in…

Operator, let's open it up for Q&A.

[Operator Instructions] The first question is from Dave Kistler of Simmons and Company. David W. Kistler - Simmons & Company International, Research Division: Real quickly on the comments about leverage that Roger made. As you start to look towards '13, in the past you've highlighted you can live within cash flow and deliver maybe 15% to 20% production growth. However, it seems like there is a willingness to go outside of cash flow. Should we be looking at that leverage metric to determine how far you guys would go outside in '13 or could there be a decision to start living within cash flow by '13? Any kind of color you can give us there would be great.

This is Jeff. Let me start and then Roger will add his comments on at the end. So let me put it in context. Back to this year, we're taken it to a really high level. Our strategy is to stay focused on growing reserves and production per share within some of the highest rate of return and lowest cost plays out there. This year, we're looking at 35% growth outspending cash flow, and what most people would recognize are 2 of the best plays if not the best plays in the industry, the Marcellus particularly the wet part and the horizontal Mississippian oil play. So next year, and we won't set our budgets until later this year, but we're obviously we're working ahead and we're planning ahead. And we said it earlier this year, we have the opportunity if we choose to do so to live within cash flow and still grow 15% to 20%. And we believe we can still do that. So it sort of brackets off a couple of different slots here for where we are this year. If we choose to do that next year, we have that ability. But let me put that in context. I want to talk about it in a number of ways. One, another advantage of Range is we control or operate almost every area we have with the single exception really of Nora. So outside of Nora, we operate typically with a higher working interest or 100%. So we really have the ability even if we choose to live within cash flow next year, something close to cash flow to really shape our growth to what prices ultimately do in order to capture NAV. We have the ability and we have great operating teams led by Ray that can…

Yes, just to comment on the leverage. I mean clearly the leverage in 2013 is going to be a function of where we set the drilling throttle and where oil and gas and liquids prices are as that -- going into next year. And since we haven't set the drilling throttle yet and we don't know where prices are going to be, it's a little hard to predict where the leverage is going to be. But we have committed to keep the balance sheet strong and that's what we're going to do. And as I mentioned, when the leverage gets in that 3x range while we're fairly comfortable in that range because of all the factors that I'd mentioned earlier in my remarks, we are going to tell you what we intend to do to manage it going forward. And in this case, that asset sale is a big part of that. So we'll see how the asset sale goes later this year. Then we'll see where the drilling throttle needs to be set. And then leverage will be somewhat of a byproduct of that. But when you look at the EBITDAX build that results from bringing these wells that aren't on production yet on production, that EBITDAX build will help to bring leverage down as well along with the asset sales. So we're very comfortable with the leverage where it is presently. David W. Kistler - Simmons & Company International, Research Division: Great, I appreciate that color. And then maybe just one follow on, the Mississippian results that you kind of outlined both in your release and then in presentation on the longer laterals generating over kind of 100% rates of return at the current strip, it would seem to me it would make sense to be redirecting activity there than many of the other plays just from a rates return comment that you guys both made. Can you talk a little bit about your thoughts on that? Does that encourage you to buy more acreage? You added another 7,000 acres, but as -- should we look at this as becoming a much bigger part of the portfolio on a longer-term basis?

This is Jeff. Let me start again and then Ray will probably add a little more color but yes, I think the key thing is to look at the position we've built. And you can go through some simple back of the envelope math that I've done with several of you at conferences. And that could be 1 billion to 2 billion barrels type of resource potential on upside. It's huge, particularly for a company our size coming with rates of return that you mentioned. So what you're seeing is we'll be increasing activity there. And we think it's a great play. We got a great team up in Oklahoma City that manages it. We've been in that area since 2004. So we've got infrastructure, office, good local knowledge. But I think what you'll see as we continue to drill and assuming continued success, which I believe we'll have, you'll see us ramp up activity throughout this year. And we haven't again -- we haven't set our budgets for next year and we'll continue to look at that and present to the board late this year. But it wouldn't be unreasonable to think that we could run something like in the order of 5 rigs next year and maybe the following year, 2014, maybe go into 10 and the following year to 15. If we follow a schedule like that, that allows us the opportunity to not only hold that acreage but really significantly ramp up our oil production NGLs. And you get great rich gas with that. So Ray you might talk a little bit about things we have in place and things we're doing to start leading us down that path.

Yes, Dave, this is Ray. I think the results that we've seen so far this year are really impressive. Our guys have done a great job thinking through the future. And we did a really good job, we were really disciplined in the way we put those leases together up there. We stayed very disciplined in making sure they were consolidated because we knew handling saltwater and all those things was going to be big, play a big role in the economics of the play. So it's taken some time to really put a lot of those corridors together to put a lot of the plans in place to get the midstream infrastructure and power infrastructure and all of those things in place. And one of the things that we don't want to be guilty of is just going fast for the sake of going fast. And we're trying to take a very disciplined approach and ramp up as it makes sense to ramp up. In other words we don't want to bring rigs in, complete wells and then not be able to flow them. So we're really -- that play is really dictated a lot by handling a lot of fluid at really cheap prices to get that oil production. And so I think the guys have got an excellent plan. I'm really confident in what they're doing. And like Jeff said, I think we do have some pretty aggressive plans in the future to ramp that play up. Now I think you'll start hearing and seeing that as we get into the early part of next year, you'll start seeing that really happen pretty quickly.

The other thing -- if you look on our website Ray talked about a very efficient plan that we have. There's a diagram in there that shows that. And the other thing when we finally release our specific detailed land maps that we have in the Marcellus I think you'll be impressed with the big blocky dominant position we have and obviously the early drilling looks great. David W. Kistler - Simmons & Company International, Research Division: Great. I really appreciate the color. One just last one to sneak in. On the Miss Lime, how do you guys think about the NGLs and how are you going to manage that in that area of the country? I know you've been very focused on it up in the Marcellus, but any color you can give us with respect to NGLs pricing outlook around the Miss would be helpful.

Yes, one I'd say, again, you get a nice, so we have a liquids component and a big piece of that is oil. We have 2 facilities in place able to handle and process liquids and NGLs and with the third one that will be up by the end of the year. So we have good diversity. We have a strong marketing team. And I think really we'll be in good shape there.

The next question is from the line of Brian Lively of Tudor Pickering Holt. Brian Lively - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Just a follow-up on the 3x EBITDAX commentary. Just wondering if that is -- is that your covenant levels or is that just the internal comfort from the management team?

Brian, it's Roger. Our covenant is 4 and a quarter, 4.25x. So it's clearly a management comfort level. We talked with rating agencies. Everybody is comfortable with us kind of being here in the low 3s. Using that financial flexibility, quite frankly, financial flexibility to us is a lot more than just having a $1.75 billion committed credit facility under a $2 billion borrowing base. It's the cost structure, it's the hedging, it's the operating control. As I say being able to set the drilling throttle where it needs to be. All those factors together make us very comfortable being in that low 3 range. But we're not going to come anywhere near the covenant limits. That's just not the way we do things. Brian Lively - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Right, so if we're thinking about 2013, and I know it's a function of commodity prices, but do you guys expect to use the 3x debt to EBITDA sort of a throttle such that we would either have to look at slowing activity or doing more asset sales in terms to keep the leverage below that ratio?

I think at this point it's a wait-and-see game. We'll see how the asset sale goes. And we'll just play it accordingly. I mean one of the big factors that's different about Range is when you look at our reserve to production ratio, whether on a total proved reserve basis or just approved develop basis, our ratio is about double the other shale players. And that's really indicative of the quality of our plays. And also the diversity of the plays. We have a lot of assets contributing a lot of value to the company. So we've sold $1.8 billion in assets in the last 10 years and we've not leveler our assets. So it comes down to making some of those hard decisions. We'll make them just like we always have.

Yes, I think another key point too is our strategy has been growth at low cost on a per-share basis debt adjusted and really the other part, we say periodically and building high-grade the inventory. Like Roger said, over the years we've added in not only sold $1.8 billion worth of properties, we added in things like the Marcellus. We added in things like the horizontal Mississippian. I think in the future the St. Louis looks pretty exciting. We're looking at the Cline, the Utica, the Upper Devonian. So it's that constant process of building shareholder value by adding in higher quality plays and periodically divesting of things that are either no longer competitive in our portfolio or that we're not going to fund anymore even if they're quality properties like the Ardmore Woodford grade properties that's small position for us and it's going to be worth more to somebody else than us. Brian Lively - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: And are there any properties right now that you guys are thinking given the high grading that's happened? Are there any other properties that you can think of that are moving more to the non-core and could be monetized?

Sure, I mean we always look at our portfolio. We always we forward-frank it, we look at the upside, we look at the other potential. We make that decision. I'm not on the call today going to talk about what that is but yes, we absolutely -- Chad, Stevens and his team are on top of that. Brian Lively - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay and just final question and I'll hop off. But if you were to keep CapEx flat in 2013 versus 2012, do you have a sense of what growth it would look like?

Well, I mean, one, we haven't made all those iterations. Like I said a lot of it ends up on where you end up focusing. If we focus in the liquids rich portion and we stay within cash flow, we would grow on the order of 15% to 20%. If gas prices moved up substantially and we added in a bigger component of that, you can see this year for that amount, we're drilling at 35%. Like I said, if you just focused 100% on dry gas, literally you could theoretically probably double the numbers we have. But it's early. Right now, I think we're doing exactly the right thing. We're staying disciplined. Oil prices are still high, gas prices are relatively low. Moving into our liquids rich areas in Southwest Pennsylvania and focusing on the high rates of return there, as well as the great rates of return like Dave Kistler mentioned earlier in the horizontal Mississippian, I think it's the right thing to do. The other thing is if you look at our company our size we're $9 billion to $10 billion company depending on the stock price in the day. We have got such a huge position that is predominately derisked and again you can look in our IR presentation, but we have literally got the opportunity to grow tenfold from where we are today. We're only a 5 TCF company and not counting ethane or those things, we have got the opportunity or resource potential to grow 44 to 60 Ts. And again some of the highest rate of return plays out there. If you focus in just on the Marcellus shale, we've got the opportunity and we're only a 5 TCF company. Our net resource potential in the Marcellus is 24 to 32 TCF. That's massive and it's largely derisked. This is a play now that is basically the largest gas field in the United States and recognized by most as the highest quality too. So we've got a great portfolio. We will continue to work it as we go throughout the year. We're working internally with the divisions on what we think maximize the shareholder value, present it to our board and then let you guys know, but we're in great shape.

The next question is from David Tameron of Wells Fargo.

Can you guys talk about your drilling plans in the Cline? It looks like you shipped a little bit from Sterling over to Glasscock. Is that -- can you just talk about the reasoning behind that if I have that correct?

Let me start out again and Ray may want to pile on and I probably shouldn't start every time, so I'm going to let Ray and Roger start some. I get excited, you can probably tell. If you look at our legacy, because really what you're describing is predominately our legacy position in Conger Field. Conger Field straddles the Sterling Glasscock line. So we've got a big position over 90% -- for about 90% of it's held by production. And so far, we're excited by our first 2 wells. The other neat thing is if you look at that is there's a lot of drilling off on the western side of us and Devon has a 500,000-acre position just East of us basically. So we're surrounded by -- and there is a slide on the website that Ray and Roger are looking at right now that shows our activity relative to Laredo and Concho and Devon and others that are out there. So what we've done literally is just or scattering a few wells across our acreage because the interval itself is relatively consistent. It's 270 to 330 feet thick across the entire 100,000 acres. And we believe it's got a lot of hydrocarbon in place. So what we're doing is just trying to look across a large area from our wells and we're going to factor in what our competitors are and partners and hopefully we'll share some data with them. And it's got great upside, great potential, but the good part there it's all HBP. So we're in -- we have no rush. And the other thing I like to say going into a higher level is it fits the Range model. We like to get in areas that have stacked pays, a lot of hydrocarbon in place that -- and get really high-quality technical teams that just continually work on how to extract more and more of it out of the ground. That's the same model in Appalachia, same in Midcontinent, same in West Texas for us.

So at the time being I'm just -- it looked like earlier you were planning to drilling some Sterling wells and they've moved -- all of your wells have moved further west. Is that an indictment of Sterling or is it just -- it's more of a...?

Maybe I think we're mixing wells. If you look on our presentation on the slide, originally, we had 3 wells planned in Sterling County, those were Cline Shale wells. The wells on the western edge are Wolfberry vertical wells. And if you look at that slide, we've kind of got a little dashed line kind of circling where the potential is for that Wolfberry. In our last conference call we talked a lot about that -- how the Wolfberry vertical is really only potential over on the Glasscock County side. So what you've seen is with all of the offset activity like Jeff was referring to, we've basically are learning a lot from what's happening all around us. We've got tons of logs and scientific data all across this field. So we've logged the Cline Shale many, many times. And so really we're kind of in a validation mode, it's HBP. We don't have to be in a hurry. The Wolfberry wells are looking really good, and we can stamp those out quickly, like a good decent rate of return as oil production. And so all of those reasons, what you saw us do was shift a couple of those horizontal Cline test over into basically drilling Wolfberry wells while we have that rig out there. So if you're looking at Permian activity, that's probably what you're seeing.

And just to reiterate what Ray said. The entire 100,000 acres as perspective for Cline, it's perspective on the Western side. Still could be 100, 150, maybe 200 wells. But it's predominately the Wolfberry is just perspective on the side. Maybe that's what you're thinking.

My bad. I think I misread that chart. One more question. Could you just like talk about Lycoming? And you originally talked I know if you go back 6 months, you talked about allocating a big chunk of CapEx next year to that county. Now it sounds like you're reducing the rig count and I guess because some of the issues you mentioned, but can you just talk about some of the challenges up there and why lay down a rig up in Lycoming?

This is Jeff, I'll start. There are several considerations there. The wells up there are great. The team has done a great job of ramping up production. They're phenomenal. We've got wells that average 10 million a day, big reserves, some that are over 20 million a day, so we got a great position up there. But there's really 2 issues. One issue is giving -- even as good as the wells are, given where natural gas prices are versus liquids, if you look at on our website, you can look at the rates of return in the wet Marcellus in the Southwest and the super-rich and compare to Northeast. Even though the Northeast is good because there's a lot of liquids that come with the wells including condensate and NGLs in the Southwest where rate of return is higher. Then you got one other consideration too, is you got the drilling for holding acreage. The 2 areas, the only 2 areas really in the entire company, we have to really drill a lot the whole acreage is in Southwest Pennsylvania and in the horizontal Mississippian play. It so happens those are our 2 highest rate of return projects, so we'd be directing anyway. The leases up in the Northeast tend to be a lot bigger. So we're at a point where at the end of the year, really just by running one rig next year, there's continual drilling clauses because the leases are bigger and some of the leases are as big as 20,000 acres. So literally one well per year, we'll hold that in perpetuity. So there's no pressure to drill up there from holding the acreage that we want to hold the point of view, coupled with just where oil and gas prices are now. The good news is we got a great team. You got good economics up there. I believe gas prices -- some of the analysts on the call are calling for $4 gas next year or maybe $4.50 the year beyond, so we have really got the ability to ramp that also. Like I said earlier, we've got high quality gas assets. We've got high-quality oil assets and within gas, we've got high-quality wet gas and high-quality dry gas.

The next question is from Brian Singer of Goldman Sachs.

Looking at the NGL production trajectory here. The production has been relatively flat the last couple of quarters and I just wondered, as we look ahead to the next few particularly in the fourth quarter where you expect more and more meaningful ramp-up. Do you have a lot of -- could you quantify the amount of NGLs, non-ethane that are currently behind pipe for from wells that have already been drilled, i.e. can you just kind of talk to wells that may have already been drilled, but from a propane and other NGLs perspective just aren't online today?

Yes, if you look at the press release, I think it lists the number of wells that we've got in Southwest PA. And I think there's something like 56 wells waiting on completion and maybe something like 50 wells that are waiting on a pipeline hookup. Like I said in my prepared remarks primarily the delay in bringing those pads online has been pipeline infrastructure and that pipeline infrastructure has been delayed because of some permitting issues for the actual pipeline construction phase and the stream crossing part of that. The good news is we've resolved those issues. I mean to just come absolutely clean, we underestimated the impact of those, both West and Northwest early this year and we just didn't a allow enough time to get far enough ahead of those. So good news is we've worked with E&P leadership, they have resolved those issues. Now we have a predictable permitting process in place. We know how long it's taking. And moving forward, we don't expect to see that. I think another part of the good news and you'll see a significant ramp-up in NGLs in the third quarter and the fourth quarter is as we bring these pads online that were delayed, I mean they're literally sitting there just waiting for a pipeline to get there. And that part of it is really kicking into gear over the next quarter. It will be -- fourth quarter I predict will be much bigger than the third quarter just because it's going to take a couple of months for this stuff to start dominoing as we go forward.

But we should have a great fourth quarter.

Oh, yes, fourth quarter just like I said we believe we'll see when you compare fourth quarter this year to fourth quarter of last year, we will see 40% liquids growth.

And that's all from -- the incremental to get there is all from basically wells that have already been drilled and it's just an easing of the midstream bottleneck or some additional drilling or some wells that you're not sharing with the NGL component is, is still required?

Well, we're still drilling wells. So you still got new wells coming into the mix as we go. But yes, there is a big backlog of wells in the wet and super-rich area where we were really trying to ramp a lot of this infrastructure up in the last 6 months to 12 months or so.

Great. And then lastly going back to, I think it was David's question just before just to finish up on kind of Cline versus Wolfberry. Is your decision to move to shift to a little more towards vertical of Wolfberry from horizontal Cline because of a negative relative view on the Cline because or is it because you just think you're going to get the information that you would have otherwise been drilling that well from others -- other operators that are drilling around you?

I would classify it as 2 things. One is we are seeing a lot of offset activity more than we previously saw earlier in the year. And we do expect to learn some from that. And then I think the second reason is the Wolfberry wells are looking pretty good. And the team is doing a great job. Costs are coming down. Just in 3 wells I think we saw like -- I forget the exact number of 24% cost reduction. And we believe that they're going to see significant cost reductions even in the next few wells. They've got some new ideas in drilling and completions. And so we really believe that the Wolfberry wells have looked so good. And since it's HBP acreage and we know a lot about all of that already in the Cline, it just made a lot of sense to redirect some of that capital to get some of these Wolfberry wells drilled upfront. And the just kind of take our time with the Cline, learn from the offset activity at the end of this year we can look at it. And we still have the potential to drill another Cline well before the year is out. Right now we've just kind of got that on the drawing Board.

I think another -- I agree 100% with what Ray said. Another point to add to that is when you look at shale plays -- I mean the Wolfberry is just comingling a bunch of traditional horizons together on the vertical well. The Cline shale is really a shale. So back to shale plays and you got this interval that's plus or minus 300 feet thick. Typically what happens in successful shale plays and not all shale plays work, but in the ones that do work and you can see it in all of them in Marcellus, Barnett, you pick it. And as you continue to drill and learn, the results tend to get better. When you learn how to -- where do you optimally land it vertically in the section, what's the length of lateral, number of stages and typically as you're learning how to drive up production per well, in over a number of wells typically then you get economies of scale and you drive down costs. For us it's held by production position that we're excited about. In fact, what we're really excited about it is that the first 2 wells rather than, for example, go back to the Marcellus, the first few wells there were awful. Our first couple of wells here actually were pretty good and were economic even off of our first couple of tries. So, if you project forward to -- if you drill that 100,000 acres on a 100 acres pacing could be 1,000 wells or 50, could be 2,000 wells. So there's a lot of running room. It's a very exciting play and early on, it looks like we got a big hydro -- saturated hydrocarbon section that the first couple of wells are good. But there's -- we don't have to carry 100% of the R&D like we did in the early years in the Marcellus. We'll drill some wells, but we'll also learn from our partners in the industry out there or other companies in the industry.

That's great. And the strong vertical rates that you're seeing, is that a function of multiple or -- the multiple zones or are there specific zones like the Wolfcamp where you think down the road it may make sense to draw horizontally?

It's a combination of all of them. I mean this is like any completion well out there, different areas show different results, but it's really a combination of all of it.

Not to say that down the road, that you won't zero in on the horizon and try some horizontal wells. I think that potential is there too.

Yes, absolutely.

The next question is from Anne Cameron of BNP Paribas.

Just a question about the Mississippian. You brought -- I mean you released your IPs or your first 2 wells and it looks like it was a breakout of about 60% crude. Yet your EUR is 25% crude. So I'm just wondering if you can comment on how fast the crude drops out of the production stream.

Let me start and then I will actually ask Alan Farquharson who is the head of engineering to comment. But when you look at it on a high-level actually I think we talked about 4 wells. And remember the combined rates for 4 wells and then we zeroed in obviously on the 1 that was well over 1,000 barrels per day. It had a very high oil rate in there. Again the neat part is very early on into the play. We had great results from 2,000-foot laterals. Now we've gone to own, at least that one, close to 4,000 foot with more stages. And it didn't cost a whole lot more, it's a packers plus type completion, so adding the stages and drilling the laterals isn't that expensive, though we've got significantly better results, shifting the curve up could be from 400,000 to 500,000 to 600,000 barrels. And therefore you can look at the add-on line and the rates of return much higher like David Kistler I believe mentioned earlier. But Alan, you want to zero in on those projections?

I don't have the exact decline rate of the oil, but I think what you see is historically and a lot of these reservoirs since it's a relatively completions dry reservoir, you're going to look at oil declining and your gas oil ratios goes up over time. So over the long haul, over the life of the well, if you don't look -- as we look to a lot of the vertical wells, you see the gas rate it stayed relatively stable, but the overall gas oil ratio was increasing. I have to go back and kind of look to give a little bit more color on exactly what the decline rate is. But we're not -- I can tell you this, it's not falling out of the bottom very quickly. So it is declining as which you would normally expect it to do. And remember, since it is -- since you look at that time 0 graph, a lot of the production early on is going to be oil. So that gives you a fairly representative decline rate of what your oil is going to be. You're not going to see a significant change of gas oil ratio, that early over the first year. So if you honor the data that's in there and kind of use what the IP is, that kind of get you a relative sense of what we look like.

And a couple other comments. Obviously the economics that we have on our website include all of that and have factored all of that in there. Plus again, we're showing the 0 time plots for all the wells that we've had so far and what that historic data looks like.

And similar question, different play. The 33 wells that you brought on in Southwest PA look like they are 14% condensate, which is a good bunch oilier than both your wet and your super-rich curve. So especially because that included the 5 dry wells, and because the NGL is kind of lower, could we see like a change in composition for both of those type curves?

Let's say one thing what you're seeing is we're shifting where we're drilling the wells. So as we continue to move -- and there's a map in there again on the website that shows different Btu lines and I think we denote 1,050, 1,350, but there is a gradation as go across there. And as oil prices are high and condensate prices are high and gas is low we've shifted a lot more of our drilling into the wetter areas. So yes. Therefore, that could happen with time and we'll keep you updated on -- what those results are.

We are nearing the end of today's conference. We will go to Mike Scialla of Stifel Nicolaus for our final question. Michael Scialla - Stifel, Nicolaus & Co., Inc., Research Division: Wanted to ask you a few things about your NGLs. You said you were close to an agreement on third outlet for ethane. Can you elaborate on that at all?

Obviously, we can't. As soon as we can, Mike, we will put that out. Michael Scialla - Stifel, Nicolaus & Co., Inc., Research Division: Okay.

I wish we could say more, but we can't. Michael Scialla - Stifel, Nicolaus & Co., Inc., Research Division: I understand. Sounds like Enterprise is considering changing that ATEX line from ethane only to wide-grade. Would that cause you to change your plans if that were to happen?

We've been focused on multiple outlets and multiple contracts, and again, we've got a great team up there led by Chad Stephens who is here in the room with us and his team, the guys who work for him does a great job. Craig Davis, Curt Tipton and company. So we continually look at those things. I think the good news is there's more and more options are developing in the basin. It's turning into like I said the largest gas field in the country and ultimately, when you consider the other horizons have the potential to be the largest gas field in the world. We've got a great position. More and more of those options are developing all of which ultimately enhance the value of our properties. Michael Scialla - Stifel, Nicolaus & Co., Inc., Research Division: Okay, fair enough. Let me switch over to the Utica. You were kind of quiet about your Northwest Pennsylvania acreage for a while. Can you talk about maybe why that was and why now that you're confident that you're in the wet gas part of the play up there?

That's a legacy asset that we've had for a long time, 25 plus years. And I think over 300,000 acres in the shallow rights. And we've had different teams, different divisions within the company look at it over time. And essentially through a group of events more or less. When we sold the Barnett, we took some of those really highly gifted technical folks that are working on the Barnett. And we said, "Why don't you go look at the Utica up here underneath Northwest PA? We're bound to have some lease rights there? And lo and behold, they looked at it, saw a good potential. It was about the time the stuff in Ohio was looking pretty good. And we have 190,000 net acres. And so they've done a tremendous amount of really good technical work, putting together, lots of information. Some of that's in the presentation where we've shown type logs and we've shown that it's on strike. It's about the right depth. It's got a lot of the same characteristics of some of the successful wells over in the wet Utica in Ohio. So we think it's got a lot of potential. There's a lot of smart people that are in and around our position up there, leasing or drilling and testing some wells and doing some different things. And so we're kind of at the point now where we believe it's got great potential. It could be phenomenal. We're essentially at the point where we really just got to get some horizontal wells drilled and tested and see what we have there. The well that we're currently drilling right now is -- we're doing a lot of diagnostics on it. And we'll be completing that well here in a month or so once we get all that data in and look at it. And hopefully by the next conference call, we'll be able to talk about that and have some really great results. And assuming what we learned there and everything we learn over the next couple of months, we've got another well teed up to drill in October. So I think when we get to the end of the year, like I said in my remarks, we'll know a whole lot more about that play and what the potential is going forward. And we can kind of put it into the portfolio. We don't have any of that in any of our resource potential right now. So we're really excited about the upside potential that we see there. So... Michael Scialla - Stifel, Nicolaus & Co., Inc., Research Division: Okay, great. In the last call you talked a lot about your RCS completion technique, the improvement you were seeing there in recoveries. Is that something that you are continuing to implement. Is it becoming the predominant completion technique in the Marcellus? And also have you tried it outside the Marcellus?

We have tried it to a limited extent outside the Marcellus. We're looking at more stages along the lateral and literally all these plays that we're looking at. It's -- while we have done it a lot, I wouldn't quite classify it as the predominant completion method yet in -- at least in our Marcellus, we've certainly done more of them. We're certainly intrigued by the results. They're all looking really well. Unfortunately, we had a delay that we talked about earlier, in some of these wells coming on line. So I think over the next quarter -- 2 quarters, we'll really get to see a lot of those wells come online that we tried some of the RCS and some of the super-rich and the really wet Marcellus part of the acre -- wet part of the Marcellus acreage. And once those wells come online and we get a few months under our belt on production, then I think we'll be better equipped to answer that question. But right now we're encouraged very well by it. And it really -- if it works like it has shown us in the early wells, it's going to really improve our economics.

This concludes today's question-and-answer session. I'd like to turn the call back over to Mr. Ventura for his concluding remarks.

Range is on target to meet our production goals within our capital budget. We're driving down our unit cost in the process. Because we have very large acreage positions in some of the best plays in the country, we should be able to achieve double-digit growth in production and reserves on a per share basis net adjusted for many years. Plus we continue to be one of the lowest cost producers in our peer group and are getting better. In addition, the 5 enhancements to our portfolio, the super-rich Marcellus, the super-rich Upper Devonian, the wet Utica, the horizontal Mississippian play and the Cline oil shale play all offer significant upside to Range. Additional news on all of these plays will be coming on our third and fourth quarter calls. I'd like to point out that we still have 10 callers in the queue, and we're not able to take questions in order to honor the time of the call, but I really encourage you to give us a call so that we can follow up on all those questions. And thanks to everybody for participating on the call.

Thank you for your participation in today's conference. You may disconnect at this time and have a wonderful day.