(Bloomberg) -- Range Resources Corp.'s Louisiana purchase didn't work out quite as well as Thomas Jefferson's.
The natural gas producer's $4 billion-plus deal for the Terryville Field -- in the southern state bought from France in the 1800s -- was touted as “a significant milestone” by Chief Executive Officer Jeff Ventura in 2016. Now, the company is saying it will keep production there flat for the next five years and, instead, focus on the prolific Marcellus shale in the Appalachians.
The stock sank to the lowest in 12 years.
“They bought the asset thinking they could improve the quality," said Subash Chandra, senior analyst of equity at Guggenheim Securities LLC. The asset was in an conventional play and the company aimed to bring techniques like horizontal drilling to it, but realized “the rock is the rock.”
Another concern driving the stock down is that the company outspent its budget last year by about 10 percent, according to a statement on Wednesday. The company also announced a 26 percent increase in proven reserves, which Chandra says helps even things out in the long run.
Range was down 9.7 percent to $15.36 at 1:31 p.m. in New York after hitting $15.10, the lowest since May 2005. A company spokesman was not immediately available for comment.
To contact the reporter on this story: Ryan Collins in Houston at rcollins74@bloomberg.net.
To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Carlos Caminada, Will Wade
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