UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark one)

OR

Commission file number 0-9592

RANGE RESOURCES CORPORATION

777 Main Street, Suite 800
Fort Worth, Texas
(Address of principal executive offices)

76102
(Zip Code)

Registrant’s telephone number, including area code: (817) 870-2601

Former name, former address and former fiscal year, if changed since last report: Not applicable

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the precedings 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

81,599,800 Common Shares were outstanding on April 25, 2005.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

     The financial statements included herein should be read in conjunction with the latest Form 10-K for Range Resources Corporation. Unless the context otherwise indicates, all references in this report to “Range” “we” “us” or “our” are to Range Resources Corporation and its subsidiaries. The statements are unaudited but reflect all adjustments which, in our opinion, are necessary to fairly present our financial position and results of operations. All adjustments are of a normal recurring nature unless otherwise noted. These financial statements, including selected notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission (the “SEC”) and do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete financial statements.

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RANGE RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands)

See accompanying notes

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RANGE RESOURCES CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in thousands except per share data)

See accompanying notes.

4

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in thousands)

See accompanying notes.

5

RANGE RESOURCES CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, in thousands)

See accompanying notes.

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RANGE RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(1) ORGANIZATION AND NATURE OF BUSINESS

     We are engaged in the exploration, development and acquisition of oil and gas properties primarily in the Southwestern, Appalachian and Gulf Coast regions of the United States. We seek to increase our reserves and production primarily through drilling and complementary acquisitions. Prior to June 2004, we held our Appalachian oil and gas assets through a 50% owned joint venture, Great Lakes Energy Partners L.L.C., or Great Lakes. In June 2004, we purchased the 50% of Great Lakes that we did not own (see footnote 4). We also added substantially to our Appalachian oil and gas assets through the acquisition of PMOG Holdings, Inc., or Pine Mountain, in December 2004. Range is a Delaware corporation whose common stock is listed on the New York Stock Exchange.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     The accompanying consolidated financial statements include the accounts of Range, our wholly-owned subsidiaries and for the periods prior to June 23, 2004, a 50% pro rata share of the assets, liabilities, income and expenses of Great Lakes. On June 23, 2004, we purchased the 50% of Great Lakes that we did not own (see footnote 4). The statement of operations for the three months ended March 31, 2004 includes 50% of the revenues and expenses of Great Lakes while the three months ended March 31, 2005 includes 100%. Certain reclassifications have been made to the presentation of prior periods to conform to current year presentation. These financial statements are unaudited but, in our opinion, reflect all adjustments necessary for a fair presentation of the results for the periods presented. All such adjustments are of a normal recurring nature unless disclosed otherwise.

Revenue Recognition and Credit Risk

     We recognize revenues from the sale of products and services in the period delivered. Although receivables are concentrated in the oil and gas industry, we do not view this as an unusual credit risk. We provide for an allowance for doubtful accounts for specific receivables judged unlikely to be collected based on the age of the receivable, our experience with the debtor, potential offsets to the amount owed and economic conditions. In certain instances, we require purchasers to post stand-by letters of credit, furnish guarantees or pre-pay purchases. In addition to the allowance for doubtful accounts for Independent Producer Finance, or IPF, we have allowances for doubtful accounts relating to exploration and production of $964,000 and $967,000 at March 31, 2005 and December 31, 2004, respectively.

Cash and Equivalents

     Cash and equivalents include cash on hand and on deposit and investments in highly liquid debt instruments with maturities of three months or less. The March 31, 2005 balance sheet includes $16.8 million of cash in an escrow account. These funds are proceeds received from the sale of oil and gas properties which are held in escrow to be used to purchase similar assets. We may defer the tax due on the sale of assets if we purchase similar assets by April 29, 2005.

Oil and Gas Properties

     We follow the successful efforts method of accounting for oil and gas producing activities. Exploratory drilling costs are capitalized pending determination of whether a well is successful. Exploratory wells subsequently determined to be dry holes are charged to expense. Costs resulting in exploratory discoveries and all development costs, whether successful or not, are capitalized. Geological and geophysical costs, delay rentals and unsuccessful exploratory wells are expensed. Depletion is provided on the unit-of-production method. Oil and NGLs are converted to gas equivalent basis (“mcfe”) at the rate of one barrel equals 6 mcf. The depletion, depreciation and amortization (“DD&A”) rates were $1.45 per mcfe and $1.38 per mcfe in the three months ended March 31, 2005 and 2004, respectively. Unproved properties had a net book value of $15.7 million and $14.8 million at March 31, 2005 and December 31, 2004, respectively. Unproved properties are reviewed quarterly for impairment and impaired if conditions indicate we will not explore the acreage prior to expiration or the carrying value is above fair value.

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     Our long-lived assets are reviewed for impairment quarterly for events or changes in circumstances that indicate that the carrying amount of these assets may not be recoverable. Long-lived assets are reviewed for potential impairments at the lowest levels for which there are identifiable cash flows that are largely independent of other groups of assets. The review is done by determining if the historical cost of proved properties plus abandonment less the applicable accumulated depreciation, depletion and amortization is less than the estimated expected undiscounted future cash flows. The expected future cash flows are estimated based on our plans to continue to produce and develop proved reserves. Expected future cash flow from the sale of production of reserves is calculated based on estimated future prices. We estimate prices based upon market related information including published futures prices. The estimated future level of production is based on assumptions surrounding future levels of prices and costs, field decline rates, market demand and supply, and the economic and regulatory climates. When the carrying value exceeds such cash flows, an impairment loss is recognized for the difference between the estimated fair market value (as determined by discounted future cash flows) and the carrying value of the assets.

Transportation and Field Assets

     Our gas transportation and gathering systems are generally located in proximity to certain of our principal fields. Depreciation on these systems is provided on the straight-line method based on estimated useful lives of 10 to 15 years. We receive third-party income for providing certain transportation and field services which is recognized as earned. Depreciation on the field assets is calculated on the straight-line method based on estimated useful lives of five to seven years. Buildings are depreciated over 10 to 15 years.

Independent Producer Finance

     IPF owns dollar denominated overriding royalties in oil and gas properties. The royalties are accounted for as receivables and payments received relating to the return on investment are recognized as income with the remaining receipts reducing receivables. Currently, all receipts are being recognized as a return of capital, thus reducing receivables. The receivables are evaluated quarterly and provisions for the valuation allowance are adjusted accordingly. At March 31, 2005, the receivable balance was $7.1 million, offset by a valuation allowance of $3.1 million resulting in a net receivable balance of $4.0 million. The $4.0 million net receivable is shown on our consolidated balance sheet in other assets ($3.1 million) and accounts receivable ($0.9 million). At December 31, 2004, the receivable balance was $7.4 million, offset by a valuation allowance of $2.9 million resulting in a net receivable balance of $4.5 million. During the first quarter of 2005, IPF net (included in other revenues) included $49,000 of administrative expenses and a $225,000 increase in the valuation allowance. During the same period of the prior year, revenues of $33,000 were offset by $465,000 of interest and administrative expenses, and a $235,000 increase in the valuation allowance. Since 2001, IPF has not acquired any new royalties and therefore, the portfolio has declined due to collections and sales.

Other Assets

     The expenses of issuing debt are capitalized and included in other assets on our consolidated balance sheet. These costs are amortized over the expected life of the related securities. When a security is retired prior to maturity, related unamortized costs are expensed. At March 31, 2005 and December 31, 2004, these capitalized costs totaled $8.8 million and $5.7 million, respectively. At March 31, 2005, other assets included $8.8 million of unamortized debt issuance costs, $540,000 of long-term deposits, $10.8 million of marketable securities held in our deferred compensation plans and $3.1 million of long-term IPF receivables.

Gas Imbalances

     We use the sales method to account for gas imbalances, recognizing revenue based on cash received rather than the gas produced. A liability is recognized when the imbalance exceeds the estimate of remaining reserves. Gas imbalances at March 31, 2005 and December 31, 2004 were not significant.

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Derivative Financial Instruments and Hedging

     We use commodity-based derivatives to reduce the impact of volatile oil and gas prices. For derivatives qualifying as hedges of future cash flows, the effective portion of any changes in fair value is recognized in a component of stockholders’ equity called other comprehensive income, or OCI, and then reclassified to income, within oil and gas revenues, when the underlying anticipated transaction occurs. Any ineffective portion (changes in realized prices that do not match changes in the hedge price) is recognized in income, in other revenues in our consolidated statement of operations, as it occurs. Ineffective gains or losses are recorded while the hedge contract is open and may increase or reverse until settlement of the contract. Of the $146.5 million unrealized pre-tax hedging loss at March 31, 2005, $116.0 million of losses will be reclassified to earnings over the next 12 months period and $30.5 million for the periods thereafter, if prices remain constant. Actual amounts that will be reclassified will vary as a result of changes in prices. We have also entered into swap agreements to reduce the risk of changing interest rates. Due to the Great Lakes acquisition and changes to our credit facility, these interest rate swaps are no longer designated as hedges and are marked to market each month in interest expense.

Asset Retirement Obligation

     The fair values of asset retirement obligations are recognized in the period they are incurred if a reasonable estimate of fair value can be made. Asset retirement obligations primarily relate to the abandonment of oil and gas producing facilities and include costs to dismantle and relocate or dispose of production platforms, gathering systems, wells and related structures. Estimates are 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. We do not provide for a market risk premium associated with asset retirement obligations because a reliable estimate cannot be determined.

Use of Estimates

     The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at year-end and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates and assumptions used. Depletion of oil and gas properties is determined using estimates of proved oil and gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including estimates of future recoverable reserves and commodity price outlook. Other estimates which may significantly impact our financial statements involve IPF receivables, deferred tax valuation allowances, fair value of derivatives and asset retirement obligations.

Recent Accounting Pronouncements

     In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123 (R) supersedes APB opinion No. 25, Accounting for Stock Issued to employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123 (R) is similar to the approach described in Statement 123. However, Statement 123 (R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. We are continuing to evaluate the alternatives allowed under the standard, which we are required to adopt beginning in the first quarter of 2006.

Pro Forma Stock-Based Compensation

     We have adopted the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” or SFAS 123. Accordingly, no compensation cost has been recognized for the stock option plans because the exercise prices of

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employee stock options equals the market prices of the underlying stock on the date of grant. If compensation cost had been determined based on the fair value at the grant date for awards in the three months ended March 31, 2005 and 2004, consistent with the provisions of SFAS 123, our net income and earnings per share would have been reduced to the pro forma amounts indicated below (in thousands, except per share data):

(3) ASSET RETIREMENT OBLIGATION

     A reconciliation of our liability for plugging and abandonment costs for the three months ended March 31, 2005 and 2004 is as follows (in thousands):

(4) ACQUISITIONS AND DISPOSITIONS

     Acquisitions are accounted for as purchases, and accordingly, the results of operations are included in our consolidated statement of operations from the respective date of acquisition. Purchase prices are allocated to acquired assets and assumed liabilities based on their estimated fair value at acquisition. Acquisitions have been funded with internal cash flow, bank borrowings and the issuance of debt and equity securities. We purchased various properties for $2.6 million and $3.3 million during the three months ended March 31, 2005 and 2004, respectively. The purchases include $370,000 and $1.8 million for proved oil and gas reserves, respectively, with the remainder representing unproved acreage.

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     On June 23, 2004, we purchased the 50% of Great Lakes that we did not previously own for $200.0 million paid to the seller plus the assumption of $70.0 million of Great Lakes bank debt and the retirement of $27.7 million of oil and gas commodity hedges. The debt assumed was refinanced and consolidated with our existing credit facility as of the purchase date (See further discussion in Note 6.). The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed at the date of acquisition (in thousands):

     On December 10, 2004, we purchased additional Appalachia oil and gas properties through the purchase of PMOG Holdings, Inc., or Pine Mountain, a private company for $150.6 million cash paid to the seller, $57.2 million cash paid to repay debt and $13.3 million for the retirement of oil and gas commodity hedges. The following table summarizes the preliminary allocation of purchase price to assets acquired and liabilities assumed at the date of acquisition (in thousands):

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     The following unaudited pro forma data includes the results of operations of the above acquisitions as if they had been consummated at the beginning of 2004. The pro forma data is based on historical information and does not necessarily reflect the actual results that would have occurred nor is it necessarily indicative of future results of operations (in thousands).

     During the first quarter of 2004, we sold non-strategic properties for proceeds of $2.3 million. Proceeds from the disposal of miscellaneous properties depreciated on a group basis are credited to net book value with no immediate effect on income. However, gain or loss is recognized from the sale of less than the entire amortization base if the disposition is significant enough to materially impact the depletion rate of the remaining properties in the amortization base.

(5) SUPPLEMENTAL CASH FLOW INFORMATION

(6) INDEBTEDNESS

     We had the following debt outstanding as of the dates shown below (in thousands) (interest rates at March 31, 2005, excluding the impact of interest rate swaps, is shown parenthetically). No interest expense was capitalized during the three months ended March 31, 2005 and 2004, respectively.

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Bank Debt

     In June 2004, we entered into an amended and restated $600.0 million revolving bank facility, which is secured by substantially all of our assets. The bank credit facility provides for a borrowing base subject to redeterminations semi-annually each April and October and pursuant to certain unscheduled redeterminations. At March 31, 2005, the outstanding balance under the bank credit facility was $262.9 million and there was $312.1 million of borrowing capacity available. As of April 15, 2005, the loan maturity was extended one year to January 1, 2009, the borrowing base was increased to $600.0 million and certain reductions to interest rate margins and fees were enacted. Borrowings under the bank credit facility can either be base rate loans or LIBOR loans. On all base rate loans, the rate per annum is equal to the lesser of (i) the maximum rate (the “weekly ceiling” as defined in Section 303 of the Texas Finance Code or other applicable laws if greater) (the “Maximum Rate”) or, (ii) the sum of (A) the higher of (1) the prime rate for such date, or (2) the sum of the federal funds effective rate for such data plus one-half of one percent (0.50%) per annum, plus a base rate margin of between 0.0% to 0.625% per annum depending on the total outstanding under the bank credit facility relative to the borrowing base. On all LIBOR loans, we pay a varying rate per annum equal to the lesser of (i) the Maximum Rate, or (ii) the sum of the quotient of (A) the LIBOR base rate, divided by (B) one minus the reserve requirement applicable to such interest period, plus a LIBOR margin of between 1.25% and 1.875% per annum depending on the total outstanding under the bank credit facility relative to the borrowing base. We may elect, from time-to-time, to convert all or any part of its LIBOR loans to base rate loans or to convert all or any part of its base rate loans to LIBOR loans. The average interest rate on the bank credit facility, excluding the effect of interest rate swaps, was 4.1% for the three months ended March 2005. After the effect of the interest rate swaps (see Note 7), the rate was 3.9% for the three months ended March 2005. The weighted average interest rate (including applicable margin) was 3.1% for the three months ended March 31, 2004. A commitment fee is paid on the undrawn balance based on an annual rate of between 0.25% and 0.50%. At March 31, 2005, the commitment fee was 0.25% and the interest rate margin was 1.25%. At April 25, 2005, the interest rate (including applicable margin) was 3.9% excluding interest rate swaps and 3.6% after interest rate swaps.

Great Lakes Credit Facility

     Prior to June 23, 2004, we consolidated our proportionate share of borrowings on the Great Lakes $275.0 million bank facility, or the Great Lakes Credit Facility. Simultaneously with our purchase of the 50% of Great Lakes we did not own, the outstanding balance under the Great Lakes Credit Facility was fully repaid.

7-3/8% Senior Subordinated Notes due 2013

     In July 2003, we issued $100.0 million of 7-3/8% Senior Subordinated Notes due 2013, or the 7-3/8% Notes. We pay interest on the 7-3/8% Notes semi-annually each January and July of each year. The 7-3/8% Notes mature in July 2013 and are guaranteed by certain of our subsidiaries, or the Subsidiary Guarantors. The 7-3/8% Notes were issued at a discount which is amortized into interest expense over the life of the 7-3/8% Notes into interest expense.

     We may redeem the 7-3/8% Notes, in whole or in part, at any time on or after July 15, 2008, at redemption prices from 103.7% of the principal amount as of July 15, 2008, and declining to 100.0% on July 15, 2011 and thereafter. Prior to July 15, 2006, we may redeem up to 35% of the original aggregate principal amount of the notes at a redemption price of 107.4% of the principal amount thereof plus accrued and unpaid interest, if any, with the proceeds of certain equity offerings. If we experience a change of control, there may be a requirement to repurchase all or a portion of the 7-3/8% Notes at 101% of the principal amount plus accrued and unpaid interest, if any. The 7-3/8% Notes and the guarantees by the Subsidiary Guarantors are general, unsecured obligations and are subordinated to our senior debt and will be subordinated to future senior debt that Range and the Subsidiary Guarantors are permitted to incur under the bank credit facility and the indenture governing the 7-3/8% Notes. In June 2004, we issued an additional $100.0 million of 7-3/8% Notes, or the Additional Notes. The Additional Notes were issued at a $1.9 million discount which is amortized into interest expense over the remaining life of the 7-3/8% Senior Notes.

6-3/8% Senior Subordinated Notes Due 2015

     In March 2005, we issued $150.0 million of 6-3/8% Senior Subordinated Notes due 2015, or the 6-3/8% Notes. We pay interest on the 6-3/8% Notes semi-annually each March and September of each year. The offering of the 6-3/8% Notes on March 9, 2005 was not registered under the Securities Act of 1933, as amended, or the Securities Act, or under any state securities laws because the 6-3/8% Notes were only offered to qualified institutional buyers and to non-U.S. persons outside the United States in compliance with Rule 144A and Regulation S under the Securities Act.

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6% Convertible Subordinated Debentures due 2007

     In 1996, we issued $55.0 million of 6% Convertible Subordinated Debentures due 2007, or the 6% Debentures. We redeemed the outstanding 6% Debentures in August 2004 at 102.0% of principal amount, plus accrued interest, which totaled $9.1 million.