Welcome to the Range Resources Fourth Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Statements made during 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. After the speakers' remarks, there will be a question and answer period. At this time, I would like to turn the call over to Mr. Laith Sando, the SVP Investor Relations at Range Resources. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining Range's year-end 2024 earnings call. The speakers on today's call are Dennis Degner, Chief Executive Officer, and Mark Scucchi, Chief Financial Officer. Hopefully, you've had a chance to review the press release and updated investor presentation that we've posted on our website. You may reference certain slides on the call this morning. You will also find our 10-Ks on Range's website under the Investors tab. Or you can access it using the SEC's EDGAR system. Please note, we'll be referencing certain non-GAAP measures on today's call. Our press release provides reconciliations of these to the most comparable GAAP figures. We've also posted supplemental tables on our website that include realized pricing details by product, along with calculations of EBITDAX, cash margins, and other non-GAAP measures. With that, let me turn the call over to Dennis.

Thanks, Laith. And thanks to all of you for joining the call today. In the fourth quarter, Range continued its steady progress on key themes that we have discussed over the past year. We completed the operational program safely, efficiently, and within budget while generating free cash flow and investing in the long-term development of our world-class asset base. Range's ability to generate free cash flow at trough level natural gas prices in 2024 allowed us to repurchase shares, distribute dividends, and meet our balance sheet targets, all while making countercyclical capital investments that support the multiyear plans we'll discuss here today. I believe that Range's 2024 results are a testament to the resilience of our business and the financial flexibility we've created over the last several years. Range's low capital intensity is a key component of our through-cycle profitability and is the result of Range's class-leading drilling and completion costs, shallow base decline, large blocky core inventory, and intelligent team. Another key component of Range's resilience is the diversity of our production stream. The value of Range's liquids business was on display once again in 2024. Our ability to market ethane, propane, and butane into the international market drove the highest NGL premiums in company history, and we expect premiums versus the Mont Belvieu index once again in 2025. Looking at the entire production makeup, Range saw an aggregate unhedged price realization which is a $0.49 premium over Henry Hub natural gas, a clear differentiator versus purely dry gas producers. When you combine our efficient operations, low capital intensity, and liquids revenue uplift, the output was another quarter and another year of positive free cash flow despite challenging natural gas prices. Before diving into Range's 2025 plans and the three-year outlook we announced, I want to briefly touch on some of our results for 2024. For 2024, Range ran two rigs and one completion crew, driving capital investments of $654 million while generating production for the year at approximately 2.18 Bcfe equivalent per day. This production level was above guidance and is the result of strong well performance and continued optimization of gathering and compression infrastructure that was mentioned on recent earnings calls. This past year showcased a continued theme of operational excellence. Drilling saw several new efficiency records set for the program while drilling a total combined lateral footage of over 800,000 feet. For context, maintenance production requires approximately 600,000 lateral feet, so the 800,000-plus feet from drilling points to the momentum Range has in the program for future periods. For the year, the team drilled 59 laterals with an average horizontal length over 14,000 feet. Our large contiguous acreage position affords us the ability to drill these types of long laterals, increasing efficiencies, and allowing us to access more reserves from a single location, all while reducing our overall footprint and consolidating infrastructure requirements. Completions also saw continued efficiency gains and strong safety performance from the electric fracturing fleet picked up at the start of 2024, with the team completing 3,300 stages for the year and underpinned by a 6% increase in frac stages per day versus the previous record set in 2023. Now turning to our plans for 2025. Consistent with our 2024 operational plan, we project to run an efficient two drilling rig and one frac crew program for the year ahead. This drives an all-in capital budget of $650 to $690 million, which consists of the following: approximately $530 million of all-in maintenance capital, including maintenance land and facilities; an incremental $70 to $100 million of drilling and completion capital that will support future growth; up to $30 million for targeted acreage that supports increased lateral lengths and offsets our lateral footage being turned to sales during the year, all while keeping our 28 million feet of Marcellus inventory relatively unchanged; and lastly, approximately $20 to $30 million for pneumatic devices and production facility upgrades to further reduce emissions. This is part of an estimated $50 to $60 million project with $10 million already completed in 2024. This capital plan will result in modest production growth in 2025 to approximately 2.2 Bcfe per day while building additional in-process inventory for increased growth capacity in 2026 and 2027. We expect the first half of the year production to be slightly down before increasing into the second half of the year and carrying into 2026. Looking beyond 2025, we are planning to add approximately 400 million cubic foot equivalent of daily production over the three years. This will put 2027 annual production at approximately 2.6 Bcfe per day, but the capital required to reach this level of production is $650 to $700 million per year. This should sound familiar to our investors as it approximates the two rig and one completions crew program we ran in 2024 and plan to run again in 2025. Importantly, our production plan over the next three years will utilize incremental processing capacity at the MPLX Harmon Creek facility and feed directly into natural gas transportation capacity we have secured to the Midwest and Gulf Coast regions. Range will also be sending incremental NGL production to a new East Coast terminal that is expected to generate the same export premiums that have benefited Range shareholders for many years. Over the three-year period, Range's reinvestment rate is expected to remain well below 50% at a $3.75 natural gas price level, allowing for increasing returns of capital while thoughtfully growing the business into known end markets. And at current strip pricing, the reinvestment rate would clearly be even lower. The resulting 19% increase in production over the three years will modestly improve margins as certain fixed costs improve on a per Mcfe basis, further strengthening Range's breakeven to approximately $2 for NYMEX. At the end of the three-year period, we also expect to have maintained our 30-plus years of high-quality Marcellus inventory, with modest land spending in line with recent years. Having decades of inventory will support additional growth as it is called for. Alternatively, at the end of this production profile, Range could maintain 2.6 Bcfe per day of production with approximately $570 million of annual drilling and completions capital, the equivalent of only $0.60 per Mcfe. This required maintenance capital is an improvement versus prior disclosures and is the result of continued strong well performance, operational efficiencies, and continued optimization of gathering and compression infrastructure. We believe this robust inventory and relatively low capital intensity provide Range a differentiated foundation for generating through-cycle returns for our investors. I'll now turn it over to Mark to discuss the financials.

Thanks, Dennis. 2024, as in years past, highlighted the strength of Range's business. Throughout business cycles, we intend to generate free cash flow, prudently invest in the business, and return capital to shareholders. Despite low commodity prices in 2024, Range accomplished just that: free cash flow, prudent investments, and returns of capital to shareholders. Additionally, our prudent investments were not constrained by cash flow, such that we were able to not only simply maintain the business, but instead, we have positioned the company to strategically take advantage of demand growth. To recap, Range paid $77 million in dividends, invested $65 million in share repurchases at prices well below our view of long-term value, and reduced net debt by $172 million while investing in operations. Range generated $453 million in free cash flow that made those capital allocation decisions possible, executing an operational plan that stands in stark contrast to many industry peers. For upstream producers, quality assets with low full-cycle costs, the ability to reach a diverse set of customers with a variety of price points, and a rock-solid balance sheet provide flexibility are all necessary to consistently create value. As we sit here in early 2025, with an efficient plan to modestly grow production, we are also carefully positioning the business for evolving domestic and international demand for natural gas and natural gas liquids. In the past, we had stated that we wanted line of sight deliverability to growing demand before we would grow production. As incremental demand is materializing today, Range is positioned with its infrastructure and inventory to do just that. As a reliable long-term energy supplier that generates strong returns from a resilient business. Over the past three years, Range has reduced net debt by over $1.3 billion while also returning $678 million to shareholders in the form of share repurchases and dividends. In total, that is more than $2 billion in capital returned to stakeholders. With the balance sheet in our target range, we have increasing flexibility to exercise opportunistic use of the $1 billion available under our existing share repurchase plan. In addition, the fixed dividend is something that we expect over time to grow slowly but steadily. It's our expectation to increase the quarterly dividend a penny per share over 12.5% at the next announcement. Here's a key message we intend to deliver today: we can thoughtfully grow Range's business in order to increase returns of capital to shareholders, a goal that is underpinned by quality, long-duration assets, and a strong balance sheet. With perhaps the lowest decline rate of comparable companies, Range's capital efficiency stands out in terms of cost per Mcfe, full-cycle breakeven costs, and the required reinvestment rate of cash flow to maintain production. As a percentage of cash flow, Range should regularly be near the lowest call on cash for sustaining capex. Critical in our assessment of growth potential is our ability to sustain a low full-cycle cost structure, low reinvestment rate, and durable high margins. Like Dennis mentioned, Range could hold 2.6 Bcfe per day of production with approximately $570 million of annual drilling and completion capital, or approximately $0.60 per Mcfe. Simply put, the result of efficient production growth by Range is growth in cash flow per share, which we expect to be compounded by a declining share count. In a profitable business, cash taxes are a reality. Year-end 2024, Range had federal NOL carryforwards totaling $1.4 billion. These NOLs will serve to reduce taxable income in coming years. These NOLs can be used to reduce up to 80% of a given year's federal taxable income. In addition, Range had Pennsylvania state NOLs of roughly $770 million. All combined, the value of Range's NOLs and tax planning should enhance after-tax cash flows over the next two years by more than $300 million. For several years, we have spoken about the undervalued option of growth in the Range business. We stated that growth would be appropriate when we had clear line of sight and deliverability to incremental demand. Further, we explained this could be accomplished with either new transportation capacity or picking up uncontracted capacity or through increased in-basin demand. We believe today's announcements illustrate the physical link of Range's inventory through gathering, processing, and long-haul transport directly to growing demand centers, enabling efficient, thoughtful growth to harvest additional value from Range's immense inventory. The consistent capital allocation strategy carefully executed, we believe this positions Range uniquely within the industry to capture significant value for our shareholders, both today and long into the future. Dennis, back to you.

Thanks, Mark. Before moving to Q&A, I'd like to congratulate our team for their accomplishments discussed and their ongoing dedication to our continued safety performance, operational improvements, and progress toward our stated financial objectives. These results harvested in 2024 and across prior years have laid the foundation for our plans in the years ahead and beyond. Simply put, Range's business has never been stronger, having de-risked a high-quality inventory measured in decades and translated that into a business capable of generating free cash flow through cycles. With that, open the line for questions.

Thank you, Mr. Degner. The question and answer session will begin now. If you would like to ask a question, please indicate by pressing star one on your telephone. If you're on a speakerphone, please pick up your handset before asking your question. If you would like to withdraw your question, you may press star one again. One moment while we go ahead and compile the Q&A roster. And our first question from today will be coming from the line of Scott Hanold of RBC. Your line is open.

Yeah. Thanks. Good morning. Just taking a look at your three-year outlook and your plans to grow into 2027, can you give us a little bit of sense on the thought process? First, could you have grown sooner than later? You obviously had some elements that in theory could have pushed growth a little bit more in 2025, and why the decision to kind of hold back for 2027 versus do it now? And as you look into that 2027 outlook, can you give us a sense of, you know, is there a mix shift between the gas and the liquids?

Yeah. Good morning, Scott. I think when you start to look at 2025, a lot of things you've heard us say in the past and Mark touched on this morning inform our approach for not only this year but then what that looks like for 2026 and 2027. We really wanted to see some clear line of sight on those demand growth opportunities and also have a home for the production. That is a critical part of the overall equation because it feeds to the top line, and that is our cash flow and our cash flow goals that we're going to have over the next several years. So as you think about 2025, could there have been some utilization earlier? Maybe so. But we wanted to see that clear line of sight around those demand growth opportunities and then start to translate that into a trajectory over the following couple of years. To reiterate something you've heard us say, running a lean, operationally efficient program with one completion crew and two drilling rigs presents the correct balance of appropriate, modest, healthy growth, gets production to end markets that can utilize it, and those are known end markets we've transacted in for decades. Our knowledge level is high in that space, and it also allows us to continue to grow around an efficient operations program. So we think this strikes the right balance. The inventory will get utilized, and this is the best trajectory over the next three years.

Got it. And did you, when you look at that growth in 2027, can you give me your thoughts on whether you would hedge some of that to mitigate potential weakness in price? For example, are you willing to hedge into 2027 at the right prices to secure some of that or evaluate doing end-user type transactions to lock in a price?

I think the answer is yes to all of the above. One of the hallmarks of our program is flexibility built into it through diversity of outlets. Fundamentally, it's important to keep in mind the structural hedges that are built into our business. By the nature of our production mix, with roughly 70% gas and 30% liquids, the uplift and the resilience, combined with where the balance sheet is, greatly reduces the need to hedge. What we do hedge provides some level of insurance and steadiness to preserve optionality and to be a bit countercyclical to create outsized value. We tend to continue to hedge a modest portion of our production, but we have flexibility. As we look at the macro backdrop on both gas and liquids and the end markets to which we're delivering production, we feel good. At the end of the day, free cash flow generation and growing free cash flow is the goal. We can adapt the program based on macro trends, and we're confident given the low breakeven, low capital per unit of production, and the margins generated where these molecules are being delivered to.

Thank you. One moment for the next question, please. And our next question will be coming from the line of Jake Roberts of TPH and Company. Your line is open.

Morning. Maybe starting out with the new gas takeaway agreement. So I was wondering if you could frame those relative to your current agreements and what you might see on the cost side over time as you start utilizing those. And also if you could disclose the ultimate split between Gulf Coast and Midwest, and if there is the ability to move those volumes around if necessary.

Good morning. When you look at the transport we've acquired, it's going to look and feel a lot like our current portfolio. The percentages really don't move significantly versus what you've heard from us in the past where essentially 80% of our gas gets out of basin and on total, about 50% gets down to the Gulf. It's a little more weighted toward the Midwest, but there's significant exposure in this transportation that gets us to the Gulf, which we like. From a cost perspective, it will be right in line with what you've seen in prior cycles on gathering, processing, and transportation reporting. Inherently, from a total perspective, we would expect to see some relief over time as we apply efficient use of that infrastructure and as portions of our contracts in the past have cost roll-ups that will end. So in the near term, GP&T costs should look consistent, and in the future, we expect some reduction as contracts roll off and we gain efficiencies. What excites us is the emerging demand story in the Midwest where some of this transport effectively terminates, so there's a real opportunity for us around that regional growth.

Thanks. I appreciate the detail there. And then my second question is on the multiyear outlook and specifically the capital that you guys have laid out. Can you frame how we should be thinking about the cadence of that $675 million over 2026 and 2027? And then what exactly is falling off the program to get to the $570 million in the longer-term environment? And what rig count does that come with?

I would frame it this way: capital should look pretty consistent and we've provided guardrails of $650 to $700 million. The variation within that range reflects what we expect across the next three years. As you move into 2026 and 2027, some capital dollars become more weighted toward completions to utilize DUC inventory that has been built across 2023 and 2024 and will be completed throughout 2025. That completion activity becomes a tailwind over the following two years. Again, the capital should be consistent in that $650 to $700 million range and will be allocated more toward completions as we use the built inventory. The program remains two rigs and one frac crew in scale as the baseline.

Thanks, Dennis. Appreciate the time.

Thank you. One moment for the next question. And our next question will be coming from the line of Bertrand Donnes of Choice. Your line is open.

Hey. Good morning, guys. Just wanted to start off: one of your peers made a meaningful distinction this quarter on the difference between maybe an attractive gas strip price versus what they were actually seeing on the supply-demand side. So just wondering, first, if this decision was made using one or the other? And then, when we get to early next year and you're staring down that ramp into 2027, are you looking at the strip price at that point? Or are you looking at maybe hyper-scaling deals or in-basin demand? Which are you looking at more?

I'll start. Commodity price alone really wasn't the driver of our three-year plan. It was more about our free cash flow goals and objectives over the next three years coupled with the demand we have line of sight to and the transport that gets us to those known end markets. Yes, you've seen strength in strip pricing, but the story includes more than weather and storage levels. It includes LNG commissioning and run rates, and it includes the NGL story impacting our overall realizations and cash flow multiplier. So commodity price wasn't the biggest driver; cash flow outlook and deliverability to known end markets were. We also expect potential power demand, AI, and data center growth opportunities in-basin, but those are not required today for the three-year path because we can market production into known markets on existing transport. Other opportunities that materialize in the future could enable further growth or reallocation of existing production to feed new demand.

Gotcha. And then second, is there room for external growth through acquisitions in this three-year outlook? You outlined this growth scenario to highlight that you don't need to add inventory—could you still grow and find a way to make an acquisition accretive?

I'll jump in. I wouldn't say it's an either-or. That said, this organic growth is so compelling given the quality and depth of our inventory—thirty-plus years—that for an acquisition to make sense it has to make Range materially better and create incremental value. The bar is high. We study the basin and potential opportunities, and we'll remain open-minded, but it's challenging for an acquisition to exceed the returns from this organic path.

Perfect. Just to clarify, if you made an acquisition you wouldn't need to slow down growth or adjust for that then?

That would be hypothetical. If that were to happen, we'd evaluate it at the time and consider impacts to the growth plan.

Thank you. One moment for the next question. And the next question will be coming from the line of Kevin McCurdy of Pickering. Your line is open.

Hey. Good morning. Appreciate the details on the multiyear production and CapEx plan. I wonder if you could help us bridge the gap between the production point two Bcf a day in 2025 and 2.6 in 2027. Will the production ramp up at a measured pace in 2026 or will it be kind of a steeper growth in the back half of the year? Any specifics on when those contracts come online?

If you start with 2025, the profile will look similar to recent years: the first half is slightly activity-driven and can be a bit lower, and you'll see increases in the back half as turn-in lines materialize. Some infrastructure being constructed will commission in late spring and some in the fall, which will move our production profile materially in the back half of the year and provide momentum into 2026 and 2027. The transport and processing at the MPLX facility come together in 2026, further supporting that momentum. So expect a slow and steady incremental increase across the back 24 months, with capital being relatively smooth and activity remaining roughly in the two rigs and one frac crew footprint while completion activity increases to utilize DUC inventory.

Got it. Appreciate those details. And then you touched a little bit about the margin expansion in the prepared remarks. But I was curious if you had any more particular details on the contracts. Will you get better margins on the extra gas and the NGL you're producing into 2027? Or maybe where do you see those breakevens?

As we pointed out in the materials, a $2 type breakeven is a reasonable frame of reference when you factor in deliverability of our production, the uplift from NGLs, and so forth. Driving down fixed costs—direct operating costs, GP&T, G&A, and continued reductions in interest expense as we pay down debt—will produce incremental penny improvements across the cost base. On the marketing side, margins will be influenced by long-term relationships and creative pricing structures. The expectation is that prudent cost control combined with durable marketing agreements will expand margins over the next several years as demand comes online.

Thank you. One moment for the next question. And our next question will be coming from the line of John Anis of Texas Capital. Your line is open.

Hey. Good morning all, and congrats on a strong year-end. For my first question, you noted that you secured additional transport, processing, and export capacity to support your planned production profile. Is the right way to think about growth beyond that 2.6 Bcfe a day level post-2027 requiring additional transport capacity or incremental in-basin demand to support it? And then perhaps if you could also provide some color on the opportunity set to secure additional uncontracted takeaway. Thanks.

Good question. Beyond 2027, we can be patient. There could be opportunities to take on underutilized capacity by others in the future, but it's hard to have line of sight on volume today. Our thirty-plus years of inventory affords us opportunity to grow as demand continues to materialize. We can be patient to add transportation as it becomes available or respond to in-basin demand. As an example, if power generation remains a significant consumer of incremental natural gas and follows historical supply percentages, forecasts suggest there could be another several Bcf per day of demand growth, and Range could play a part in supplying that. So growth beyond 2.6 Bcfe could be supported by a combination of additional transport and in-basin demand, and we'll evaluate opportunities as they arise.

Terrific color. As my follow-up, you highlighted how maintenance D and C continues to trend lower, decreasing around $50 million this year versus last. Could you help us understand the drivers of those savings and what additional levers do you have to continue to drive that down over time?

The team has continued to exceed expectations on long lateral development and related efficiencies. Over the past couple of years we've seen double-digit percentage increases in drilling efficiencies and set several records. Continued improvements in long lateral D&C cost per foot are expected. Additionally, returning to pad sites with existing facilities lets us reuse roads and infrastructure, which reduces cost. We continually root out nonproductive time, and our contiguous acreage position enables efficiencies that translate into lower capital and operating costs. We expect to continue chipping away at further improvements quarter after quarter and year after year.

Thank you. One moment for the next question, please. And the next question will be coming from the line of Michael Scialla of Stifel. Your line is open.

Good morning, everybody. Obviously, you're pretty bullish on both net gas and NGL demand growth. If one or the other weren't to materialize like you think, can you talk to your ability to shift the production mix to respond? Or is that fairly limited?

Good morning, Michael. We balance activity across our asset base, and historically we've been somewhere in the 70% to 80% on the processable wet gas side and 20% to 30% on a dry gas basis. We have flexibility within the program to allocate capital between those areas, which provides optionality. We can also be flexible in how we utilize in-basin gas and in how we apply our committed transport and processing while still harvesting NGL uplift. With recent PDH facilities and upcoming steam crackers and vessel capacity, there's momentum on the NGL side that supports future realizations. Overall, while there's always some risk if one demand component underperforms, our production mix, marketing flexibility, and transport options provide meaningful ability to respond.

Got it. Obviously, your net gas outlook is heavily dependent upon LNG demand growth. There's been some split views there. I wanted to get your view on those saying the LNG market could be oversupplied with all the supply that's coming online the next few years. Can you speak to the demand side for LNG over the next few years?

I'll start. We try to be careful in articulating the Range story as diversification. LNG is part of the story, but so are power and reindustrialization and NGL demand. While an oversupply risk exists in any commodity market, that risk does not represent a large threat to our profile given our diversified sales outlets: domestic power, Midwest industrials, exports, and NGL uplift. Coupled with our low reinvestment rate and low full-cycle costs, the risk of a market overshoot materially damaging our plan is moderated. The industry has also shown discipline recently focused on free cash flow and returns.

I would add that for 2024 the U.S. averaged around 13 Bcf per day of LNG exports. Looking ahead, line of sight capacity additions will take us to roughly 26 Bcf per day by 2028, and much of that is backed by existing contracts. Regulatory support is enabling faster approvals for additional projects. Canada also has LNG coming online that's expected to add about 2 Bcf per day, and expansions of pipeline to Mexico could add another 1.5 Bcf per day. Given contracted demand and these developments, we feel strongly that near- to medium-term demand fundamentals are supportive.

Thank you. One moment, please. And our next question will come from the line of Neil Mehta of Goldman Sachs. Your line is open.

Hey. Thanks so much, Dennis, Mark. First question is just around the NGL side. We spend a lot of time talking about dry gas. But one of the hallmarks of your 2024 realization was just how good your differential was in NGLs. I think it was $2.33. How do you think about that premium as we work our way through 2025? You mentioned a range of zero to $1.25. Why would it be sequentially lower, and is there potential for outperformance?

Thanks, Neil. We enjoy talking about NGLs. Last year's premium was strong due to our international marketing activity that began years ago. Some international contracts are priced on international indices and some on premiums to domestic indices, both of which add value. Last year dock capacity for ethane and LPG was relatively tight, and when dock capacity is tight, dock value rises. Looking ahead, substantial new export capacity is coming online for both ethane and LPG—almost a doubling of ethane export dock capacity (about 400,000 barrels per day) and roughly 500,000 barrels per day of propane/LPG export capacity over the next couple of years. That increased export capacity will pull on U.S. NGL supply and tighten domestic fundamentals, which should raise domestic prices. It could result in a somewhat lower premium to Mont Belvieu on the international side, but we typically benefit either way—either from higher domestic base prices or from international premiums depending on where tightness occurs.

That's really helpful, thank you. And then flipping back to the gas side: Range's announcement today represents one of the first large producers to shift back from maintenance to growth mode, justified by strong demand fundamentals. Do you see the risk that the industry over-responds to these demand signals? Or is Range uniquely positioned to grow at this level because of low cost, good inventory, and takeaway?

Neil, that is the age-old problem in commodity industries. Range is in a unique position given our long inventory life and our ability to underwrite transport to reach growing demand markets. While aggregate takeaway capacity from Appalachia hasn't changed dramatically, we've secured additional capacity on Range's book to move molecules to growing demand. Industry discipline, consolidation, and a focus on free cash flow have moderated the risk of an uncontrolled supply response. Also, our low reinvestment rate—below 50% at $3.75 and the ability to maintain 2.6 Bcfe with roughly $570 million of drilling and completion capital—means we can grow and still generate strong returns. So our concern about industry overbuilding is limited, and our strategy prioritizes free cash flow.

Thanks, Dennis.

Thank you. One moment for the next question. And our next question will be coming from the line of Betty James of Barclays. Your line is open.

Good morning. I want to ask about the implied improvement in capital efficiency shown in the three-year outlook. If I look at what you guys are saying on 2027 maintenance capital, it's $570 million to maintain 2.6 Bcf per day. And then in 2025, you're doing that at $500 million for 2.2. So capital is going up less than production. Is there an implied improvement in well cost or drivers behind this better capital efficiency long-term versus today?

Good morning, Betty. Embedded in the outlook that gets to $570 million in 2027 is continued operational efficiency: extending lateral lengths due to our contiguous acreage position and modest targeted land spending to pick up parcels that let us lengthen laterals. For example, last year our average drilled lateral length was about 14,000 feet. Reutilizing infrastructure and our low base decline profile also help. Those factors combined support improved capital efficiency over time.

Got it. That's helpful. And my follow-up is on DUC inventory. Could you quantify the level of DUC inventory you expect to have by the end of this year and what that would mean for incremental activity in 2026 and 2027?

At the end of 2025, given the capital and activity plan in place, we expect a DUC inventory of approximately 400,000 lateral feet above our maintenance program. That equates to around 30 wells if you assume roughly 12,000-foot laterals. This DUC inventory will be available to support production growth as compression and gathering commissioning completes in the back half of this year and into 2026 and 2027.

Thank you, Betty. One moment for the next question, please. And our next question will be coming from the line of Doug Leggett of Wolfe Research. Your line is open.

Good morning. This is John Abbott on for Doug Leggett. Mark, our first question is on capital returns. You could continue to allocate capital between debt reduction and buybacks. I want to talk more about long-term dividend growth. How do you think about the ultimate size of the dividend burden of the firm and growing that over time versus buybacks? You have a thirty-year inventory, which is probably greater than what the market recognizes. You're basically an annuity. How do you create greater market value by growing the dividend over time?

You're highlighting an important distinction: the value of Range lies in the longevity of the inventory and the repeatability of returns. Returns of capital are a key part of our strategy, but we are an upstream commodity company, not a regulated utility, and are unlikely to be valued purely on dividend yield. The dividend is an important commitment to demonstrate durability through cycles, and we intend to regularly but modestly and steadily grow the dividend. Share repurchases will be opportunistic and typically the larger piece of returns of capital. We expect a declining share count over time, and while the per-share dividend may grow, the total cash call on dividends may not increase dramatically because of buybacks.

You noted $300 million benefit from NOLs over the next two years. How do cash taxes look in 2027 and beyond?

We would expect to fully utilize those NOLs over the next two years at current prices. Moving into 2027 and beyond, cash effective tax rates are likely to be in the high teens. You still have IDC deductions and other tax planning options, but think high teens as a reasonable expectation.

Thank you very much for taking our questions.

Thank you. We'll close out the Q&A this morning. We appreciate everyone joining us for the call this morning, listening to our plans and news for the next three years. If you have any questions, please follow up with our investor relations team as always. We look forward to talking about our plans on the road in the months ahead. We'll see you on the next call. Everyone.

Thank you. This does conclude today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.