Natural gas producer Range Resources plunged 7.3% a day after announcing plans to sell 52,000 acres in the Barnett Shale in Texas for $900 million, a move that prompted a downgrade from FBR Capital, which pared its rating on Range Resources to ''market perform'' from ''outperform.''
FBR Capital said a smaller-than-expected sales price for the Barnett Shale assets and concerns about natural gas prices will limit near-term appreciation in shares of Range Resources (RRC). Natural gas producers have been steadily selling North American shale assets in the past year due to falling prices for that commodity.
The property Range is selling has 390 wells with a capacity of 113 million cubic feet per day. Most of Range's exploration budget and activities are focused on the Marcellus Shale in Pennsylvania, where it is one of the dominant players. The Barnett Asset sale is expected to close in April. The buyer was not disclosed because it is a private firm.
Range Resources said in October it was looking to sell the assets and the company has been accused of contaminating drinking water in the vicinity of the assets it is selling, though it doesn't expect that issue to hinder the sale, according to the Wall Street Journal.