Range Resources Corporation (RRC) Misled Shareholders Regarding the Status of its Wells
As of December 31, 2019, Range Resources purportedly owned and operated 1,2727 net producing wells in the Appalachian region, including Pennsylvania. The Department of Environmental Protection (“DEP”) enforces the regulations governing the correct designation of a well’s status. An “inactive” well must be viable for future use within a certain time frame. If a well is not viable for future use within that time frame, it should be classified as “abandoned” and must be plugged.
On February 10, 2021, the Department of Environmental Protection (“DEP”) issued a press release announcing that Range Resources had paid a $294,000 civil penalty to the agency on January 8, 2021, for violating the 2012 Oil and Gas Act. The DEP began its investigation after it found conflicting and inaccurate information regarding a well that was designated as inactive for the purposes of DEP regulation. The DEP found that “between Tuesday, July 16, 2013, and Monday, October 11, 2017, 42 of Range Resources’ conventional wells were placed on inactive status but were never used again.” According to the DEP, “Range Resources used the inactive status period to delay the eventual plugging of unproductive wells without returning them to active status” and “should have classified the wells with no viable future use as abandoned and plugged them.”
In addition to the fine, Range Resources was also required to plug the wells the agency identified as having no viable future use. On this news, Range Resources’ stock fell $0.62 per share, or more than 6%, to close at $9.57 per share on February 11, 2021.