Marcellus Shale: Range Resources Names Jeffrey L. Ventura New President and CEO
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Jeff Ventura
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Jeffrey L. Ventura will succeed John H. Pinkerton as the president and CEO of Range Resources in a management move that puts an early proponent of Marcellus Shale development at the head of the Texas energy firm.
Mr. Ventura, who had served as president and chief operating officer of the Fort Worth company, was perhaps the single most influential executive in the development of the Marcellus Shale, having persuaded his company’s management in 2003 to explore extraction opportunities in what was then considered a low-level, dried-up basin in Appalachia.
On Jan.1, 2012, he will replace Mr. Pinkerton, 57, who becomes the executive chairman of the board after a nearly 20-year tenure as CEO. The transition was approved Thursday and announced early Monday morning.
Mr. Ventura joined Range Resources in 2003 and immediately began looking for “low-risk, repeatable” energy opportunities, he said. He and the company’s vice president of technology, William Zagorski, suggested to management that they explore what was then called the “Pennsylvania shale play” of natural gas.
Mr. Zagorski saw similarities between the Marcellus Shale and the Barnett Shale in Texas, which had natural gas extracted through horizontal drilling techniques.
In 2004, the company started securing land leases in Pennsylvania and had invested more than $150 million into what was essentially an exploratory “science project,” said Mr. Pinkerton. The firm now has nearly 500 wells drilled in the Marcellus Shale and its stock price has increased nearly tenfold to around $50 per share.
The Appalachia operation, which Mr. Ventura also convinced the company to move from Ohio to Pittsburgh, employs about 300 workers — more than double the manpower at the Texas headquarters. Range Resources has 850 employees.
Mr. Ventura, 53, assumes control at a time of big-checkbook competition in the shale gas industry. Major energy players like ExxonMobil and Chevron have acquired local companies with Western Pennsylvania acreage for billions of dollars in recent years.
With its $1.03 billion in 2010 revenue, Range Resources is a relatively small company compared to the global players funding gas acquisitions off oil that trades around $100 per barrel.
Range Resources is betting big on gas eventually breaking its current market price of around $5 per mcf, and is spending about 80 percent of its yearly capital budget on Marcellus Shale development and exploration, said Mr. Pinkerton. It could be up to 30 years before the upfront costs start to subside, he said.
“There’s no reason why Range can’t be a $50 billion to $100 billion company with thousands of employees,” said Mr. Pinkerton.
Those figures could come courtesy of more than just the Marcellus Shale. Development in other shale formations under Pennsylvania, known as the Upper Devonian and Utica shales, are still in the exploratory process and should be ready for more widespread gas extraction by 2014, said Mr. Ventura.
Mr. Pinkerton has been grooming Mr. Ventura for the top job since 2006 and will now dedicate more time to addressing legislators on energy policy, he said. He remains one of the company’s largest individual shareholders.
According to SEC filings, Mr. Pinkerton made $6.6 million in 2010 and Mr. Ventura made $5.3 million.
The gas development that Mr. Ventura championed has attracted fierce criticism from environmentalists, who call the practice untested and polluting. Mr. Ventura said his company was too focused early on in making the technology work and didn’t take enough time to introduce a new industry to a leery community.
“I always thought the risk was on the technical side and not on the communication side,” he said.
As if to prove his point, the company was quick to point out that its new CEO is a local boy, having grown up in Penn Hills and graduated from Penn State University with a degree in petroleum and natural gas engineering.
One time, the former and future CEOs were surveying Marcellus Shale land in a helicopter when Mr. Ventura realized they were hovering above his childhood home. His mom came out and waved.
Source: Pittsburgh Post-Gazette
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