# FELLOW SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-e-p/NYSE_RRC_2022/NYSE_RRC_2022.mmd` · pages 1-7_

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FELLOW SHAREHOLDERS

We are pleased to report that Range met or exceeded our key corporate objectives in 2022, leading to a record year in nearly every metric. These accomplishments are a testament to steady progress on our stated mission to realize the value of Range's world-class assets and consistently deliver shareholder returns over our multi-decade core inventory life.

We successfully managed a bullish commodity market, generating record GAAP cash flow from operations of \(1.9 billion in 2022, and materially strengthening the Company's financial foundation. As highlighted in last year's shareholder letter, our capital allocation strategy and priority for the use of organic cash flow remains the same: maintenance capex to fully utilize infrastructure and maximize margin; debt reduction toward target levels; return of capital to shareholders via dividends and stock repurchases; and, lastly, growth capex only when appropriate. Our 2022 results provide a great showcase of these priorities in practice.

## Maintaining Production & Operational Success

Range safely, responsibly, and efficiently delivered on the 2022 capital plan, producing an average of 2,121 Mmcfe per day during the year by investing $491 million of all-in capital. Total capital expenditures to maintain production, our first in priority of capital allocation, represented approximately 25 percent of annual cash flow in 2022, a record low for Range and among the best in the industry. As a result of the outstanding work from the Range team, we remain the most efficient natural gas producer in the country, as measured by maintenance capital requirements per unit of production. Range's 2022 results equate to total capital spending of $0.64 per mcfe produced, which was the lowest among natural gas producers during the year, and it is our expectation to execute one of, if not the most, capital-efficient programs again in 2023.

Our low capital requirements are the result of Range's class-leading drilling and completion costs, coupled with our shallow base decline and large core inventory. Together, these result in a peer-leading production maintenance program, providing Range a solid foundation to consistently generate significant free cash flow and returns to shareholders.

Range pioneered the Marcellus Shale more than 18 years ago, and since then, the Company has accumulated a large contiguous acreage position in Southwestern Pennsylvania. At year-end 2022, Range had roughly a half million net acres of core leasehold in Pennsylvania, with infrastructure capacity to deliver production across much of the United States and globally. Range's work in growing the Marcellus

CAPITAL EFFICIENCY - CAPEX PER MCFE

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into the United States' most prolific natural gas field has led to increased efficiencies, improved recoveries, and advancement of environmental best practices.

We have maintained a deep natural gas and natural gas liquids (NGLs) drilling inventory. This unrivaled opportunity affords us product diversity and flexibility to maximize sustainable returns. Not only does our inventory provide us with a lengthy development time horizon, but its consolidated nature allows us to realize capital and operational efficiencies like long lateral development, efficient water handling solutions, reduced trucking, and utilizing existing surface locations and facilities.

Range also achieved advancements in our safety performance during 2022. Through collaborative efforts with our employees and contractors, Range achieved a 50 percent reduction in our OSHA incident rate and reached a record low for days away or restricted duty, making 2022 one of the best safety performances in Company history. Safety can never be taken for granted, but we are proud of this accomplishment.

## Financial Foundation and Debt Reduction

To increase our financial resiliency, Range has reduced absolute debt each year since 2018. While debt reduction is typically not categorized by the market as return of capital, it carries the benefit of positively shifting the debt-to-equity capital structure ratio and lowering corporate cash costs. Interest expense has materially declined over the past few years, giving way to a lower corporate break-even commodity price, and added free cash flow.

## RANGE NET DEBT & INTEREST EXPENSE/MCFE

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In the spring of 2021, Range set a target to reduce debt by more than \(2 billion by the end of 2023. Today, we have achieved 90 percent of that target and have done so organically. It has been a successful repositioning of our balance sheet within a short period of time, and clears the path for prudent and optimal capital allocation, including additional returns of capital to shareholders in the years ahead. Range reduced net debt by more than \)860 million in 2022, representing approximately half of annual cash flow. Debt reduction was Range's largest capital allocation category during the year and set a record for the Company. At year-end, Range's net debt was approximately $1.87 billion, nearing our targeted net debt level of $1.0 to $1.5 billion. The Company's targeted debt balance is consistent with balance sheet targets described in last year's proxy, and we believe it will provide a financial foundation for Range to be both resilient and opportunistic through commodity price cycles that are inevitable in our business.

We were able to capture much of the opportunity for free cash flow and debt reduction arising from better commodity prices in 2022 with a deliberate, fit-for-purpose hedging program. For two consecutive years, Range's hedge program allowed the Company to retain more pricing upside on a per Mcfe basis than our natural gas peers.

## REALIZED PERCENTAGE OF TOTAL FCF POTENTIAL \( ^{(a)} \)  2021 - 2022

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(a) FCF Potential equals company-stated FCF plus cash settlements for derivatives. Peers include AR, CHK, CNX, CRK, EQT, and SWN.

Our hedging strategy is not aimed at picking market tops and bottoms, but at supporting durable free cash flow through the price cycles while retaining exposure to what we expect will be improving long-term natural gas and NGL fundamentals. Looking ahead, we believe the hedge program is once again positioned for success in 2023 and 2024, and we will continue to structure and scale our hedge portfolio to capture value for shareholders while prudently covering our fixed costs and capital commitments.

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## Returns of Capital to Shareholders

During 2022, Range's Board of Directors approved the reinstatement of the Company's regular quarterly cash dividend, and payments started in the second half of 2022 at an annual dividend rate of \(0.32 per share of the Company's common stock (\)0.08 per quarter). Range's dividend is a two-fold commitment: it is a commitment to tangible shareholder returns from business earnings, and it is a commitment to maintain a balance sheet that can sustain these shareholder returns through price cycles.

In addition, Range's share repurchase program was increased to \(1.5 billion from the original 2019 authorization. During the year, Range purchased 14 million shares for \)400 million, and since initiation, Range has repurchased a total of \(430 million in stock, reducing share count by 24 million shares or nearly 10 percent. We view repurchases as a powerful tool and an attractive investment opportunity, given the significant gap between what we see as the value of Range's inventory and production versus current share price. A portion of the value of this inventory can be found in our year-end reserves. The after-tax PV10 of our reserves using recent forward pricing equates to over \)40 per share net of debt, making share repurchases a compelling investment. For added context, our reserve report includes our proved developed wells and only 367 undeveloped locations out of an estimated 3,000 undrilled core locations we have in the Marcellus. Simply put, we do not believe this significant resource value is reflected in today's market valuation of the Company, presenting Range the opportunity to create meaningful, long-term per-share value for equity holders through our buyback program, which has $1.1 billion of availability remaining.

Total returns of capital to shareholders represented approximately 25 percent of annual cash flow in 2022 via dividends and share repurchases. While our near-term priority remains further strengthening the balance sheet, as debt declines, we have latitude to deploy free cash flow, as evidenced by our repurchase activity in 2022.

## Outlook for 2023 and Beyond

We believe that natural gas and NGLs are and will continue to be a vital resource for the United States and the world. As we strive to safely and responsibly produce these commodities, shareholder value creation through the generation of free cash flow and its prudent re-deployment remains our primary focus. Range's all-in capital budget for 2023 is \(570 to \)615 million, which is projected to allow the Company to maintain production at 2.12 to 2.16 Bcfe per day, while further strengthening the balance sheet toward the \(1.0 to \)1.5 billion net debt target. We expect all-in maintenance capital to be approximately \(0.76 per Mcfe produced during the

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year, the lowest amongst U.S. natural gas producers, even while adding in-process inventory to provide increased optionality for 2024 and 2025 operational plans in a cost environment in which we and our peers have experienced inflationary pressures. Considering Range's capital efficiency, combined with a peer-leading hedging program and a liquids pricing uplift, the Company maintains the ability to generate free cash flow under relatively low commodity price scenarios, which we believe to be a differentiator for Range.

Growth capex has not recently been a capital allocation priority; however, we see a world that requires access to clean, safe, reliable, and abundant fuel sources produced by ethical and responsible companies. Europe's challenges over the past year are a stark reminder that evolving energy policy must be thoughtful, prioritizing security, affordability, and availability to be successful. Within that framework, we believe Appalachia natural gas and NGLs will play a key role in meeting the world's energy and manufacturing needs. However, pipeline infrastructure investment is needed before it is possible for the industry to meaningfully increase Appalachian supply. That said, we believe Range is positioned for success in whatever infrastructure scenario we find ourselves in the future. As the most capital-efficient operator in the largest natural gas field in the world, we believe Range sits on the low end of the global cost curve for natural gas. Importantly, Range and other Appalachian producers also have advantaged emissions intensity profiles, given the prolific nature of the Marcellus, robust drilling standards, and a focus on operational efficiencies. In the likely future, where additional Appalachian gas transportation infrastructure is available and commodity prices warrant, Range has the inventory, personnel, and balance sheet to allocate capital toward growth when appropriate.

## Closing

As the world continues to move towards cleaner, more-efficient fuels, there can be little doubt that American natural gas and NGLs will continue to be the affordable, reliable, and abundant supply that helps power our everyday lives, while also helping billions of others improve their standard of living. We believe Appalachia natural gas and natural gas liquids are positioned to meet that future demand – especially with the development of additional infrastructure. Within Appalachia, Range is leading the way on capital efficiency, emissions intensity, and transparency, which are all core to generating sustainable long-term value for shareholders.

Range is proud of our team, the work we do, and the products we produce. We remain committed to developing these resources responsibly, in cooperation with our communities, as well as to finding new, innovative processes to improve operational and financial performance. We are excited about the opportunity to develop Range's world-class inventory over the coming decades into a growing market for natural gas and natural gas liquids.

In closing, we would like to recognize our employees, vendors, and royalty owners on another successful year. Our collaborative achievements elevated Range to a position of success we are proud of and one we are committed to improving upon. We also want to thank our fellow Directors for their guidance and commitment to long-term value creation for shareholders. Most importantly, we thank our shareholders for your continued support.

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GREG G. MAXWELL
CHAIRMAN

JEFFREY L. VENTURA
CHIEF EXECUTIVE OFFICER & PRESIDENT

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