Range Resources RRC Business Risk Report

A. Fluctuations in commodity prices: Range Resources, primarily engaged in natural gas and natural gas liquids production, is significantly affected by the volatility in commodity prices. These fluctuations can impact the company’s revenue, profitability, and overall financial condition.

B. Debt levels and interest rates: Range Resources has a substantial amount of debt on its balance sheet, which could pose financial risk in times of increased interest rates or economic downturns. High debt levels may restrict the company’s financial flexibility and ability to pursue new investment opportunities.

C. Capital allocation decisions: The effectiveness of Range Resources’ capital allocation decisions, such as investments in exploration and production, is crucial for long-term profitability. Poor capital allocation can lead to underperformance and erosion of shareholder value.

A. Regulatory changes and compliance issues: Range Resources operates in a highly regulated industry, and changes in regulations or failure to comply with existing ones could incur significant costs or constraints on its operations.

B. Operational disruptions: Extreme weather conditions, equipment failures, or unforeseen operational difficulties can adversely affect Range Resources’ production capabilities and overall operational efficiency.

C. Health, safety, and environmental concerns: As an energy producer, Range Resources faces significant health, safety, and environmental risks. Incidents such as spills, leaks, or accidents could result in regulatory penalties and damage to its reputation.

A. Competition within the industry: The energy sector is highly competitive, and Range Resources must continually enhance its operational efficiency and cost-effectiveness to maintain its market position against competitors.

B. Market demand volatility: Demand for natural gas and NGLs is subject to market conditions that can fluctuate widely, influenced by factors such as economic cycles, weather conditions, and shifts in energy consumption patterns.

C. Technological advancements: Technological developments in the industry pose both an opportunity and a risk; staying behind in technology adoption can hinder Range Resources’ competitive edge.

A. Mergers and acquisitions: M&A activities are part of Range Resources’ strategy to enhance its market presence and resource base, which carry risks such as integration challenges and potential overvaluation of acquired assets.

B. Diversification efforts: Any move by Range Resources to diversify its operations into new geographic or product markets could face challenges related to unfamiliar market dynamics or lower than expected performance.

C. Strategic partnerships: While strategic partnerships can provide significant benefits, they also carry risks including disagreements with partners, dependency on partner performance, and shared control over joint ventures.

A. Public perception and social media impact: Public perception, heavily influenced by social media, can significantly impact Range Resources’ reputation, especially related to environmental stewardship and sustainability practices.

B. Litigation and legal challenges: Range Resources is susceptible to legal risks, including litigation and disputes over environmental issues, which not only affect financial resources but also the company’s reputation.

C. Brand management and crisis communication: Effective brand management and crisis communication are vital to maintaining Range Resources’ corporate image, especially in handling incidents that may cause public concern.

A. Data breaches and cybersecurity threats: In an increasingly digital world, Range Resources faces risks of data breaches and cybersecurity threats which can compromise sensitive data and critical operational technology.

B. Information technology systems vulnerabilities: The company’s reliance on IT systems means that any vulnerabilities could disrupt operations and lead to significant losses.

C. Protection of sensitive information: Protecting sensitive information related to business and customers is paramount, failure of which can lead to regulatory penalties and erosion of stakeholder trust.

A. Dependence on key suppliers: Range Resources’ operations depend on the timely delivery and quality of services and materials from key suppliers. Disruptions in the supply chain can adversely affect operational efficiency and productivity.

B. Disruption of supply chain: Geopolitical tensions, economic sanctions, and other external factors can disrupt the supply chains, impacting the company’s ability to produce and deliver products on time.

C. Inventory management challenges: Efficient inventory management is critical to balance between having sufficient stock to manage production needs and minimizing excess which ties up capital.

A. Talent acquisition and retention: Range Resources competes for highly skilled professionals within the energy sector. Attracting and retaining skilled employees is essential for maintaining competitiveness and innovation.

B. Succession planning: Effective succession planning is vital to ensure that the company has capable leaders to navigate future challenges.

C. Employee health and safety measures: Given the potentially hazardous nature of its operations, maintaining rigorous health and safety standards is crucial to prevent accidents and ensure the well-being of its workforce.

• Regular monitoring of commodity price trends
• Diversification of revenue streams
• Compliance training programs for regulatory changes
• Robust cybersecurity measures and regular audits
• Crisis management and contingency planning
• Strengthen supply chain relationships and explore backup options
• Employee training programs for safety and compliance requirements