Strategic Management Oil and Gas Range Resources Ltd.

SWOT Analysis of Range Resources Ltd.

Market Analysis for Oil and Gas Industry

PESTLE Analysis for Range Resources Ltd.

Porter's 5 Forces Analysis for Range Resources Ltd.

Ansoff's Growth Matrix

Company Health

Strategic Options for Range Resources Ltd.

Total Life Cycle Management Strategies

Technology Management

Ansoff's Growth Matrix

Total Life Cycle Management Strategies

Technology Management

Strategic Management Oil and Gas

Companies operating in the oil and gas industry, especially small firms, have experienced a difficult period in the 2014-2015 financial year largely because of constant fluctuations in oil prices. During this period, the media has increasingly focused on strategies for large companies in this sector such as Exxon and Shell. As a result, small firms or operators in the sector have continued experiencing significant challenges given the difficulties in the current business environment in the oil and gas industry. Actually, if these challenges continue, small oil and gas firms will provide minimal or no possibility of delivering any acceptable return given the problems in the current pricing environment (Burgess & Kavanagh, 2015). An example of a small company in this industry that has been largely affected by the current pricing environment is Range Resources Ltd. However, there are strategic options available to grow the company and increase its revenue despite the current challenges.

Background of Range Resources Ltd.

Range Resources Ltd. is an oil and gas exploration firm whose main goal is to develop to become a fully-fledged oil and gas production and development firm ("Extreme Investing," n.d.). Range Resources Ltd. is a junior company in the oil and gas industry that holds assets in Trinidad and other regions like Colombia, the Republic of Georgia and Guatemala, Somalia, and Texas. This business organization has 100% interest in three onshore production licenses i.e. Morne Diablo, South Quarry, and Beach Marcelle. In addition, Range Resources Ltd. also has extra potential exploration acreage in Trinidad and recently obtained St. Mary's license. Throughout all its interests and business, this oil and gas firm focuses on developing its production through numerous waterflood projects in combination with comprehensive shallow onshore drilling projects and initiatives.

Analysis of Range Resources Ltd.

Range Resources Ltd. has experienced tremendous challenges in the recent past such as the suspension of its shares from trading in December 11. In addition to this suspension, the firm's creditor, Lind Asset Management, recently demanded repayment of over $7 million. This came at a time when the Range Resources Ltd. has not obtained sales proceeds from the sale of East Clarksville and North Chapman projects worth $1.4 million to Citation Resources Limited (Mainwaring, 2015). Even though 2014 was a challenging year for the company, its developments in the past 6 months have enabled it to seemingly regain its footing.

One of the major developments in this financial year for the company is its extensive acreage in Trinidad, which is a favorable country for oil and gas companies to operate in. Secondly, the company recently ratified financial incentives, which are anticipated to generate considerable positive effects on its returns and cash flows. Third, Range Resources Ltd. recently secured $12 million in equity financing from a new investor, which enabled the company to refinance the multi-faceted and expensive short-term debt from several providers (Range Resources Ltd., 2014). Fourth, due to ongoing development drilling work in Trinidad, Range Resources Ltd. experienced an increase of more than 9% in 2P reserves. This increase was important in the firm's operations since it exceeds production since its last report on independent reserves and demonstrates the potential of its extensive acreage in Trinidad. These significant developments have played a major role in enhancing the operations and success of Range Resources Ltd.

Despite the significant developments that the company has made in this financial year towards improved operations and profitability, it is still experiencing challenges in delivering acceptable returns for its operations and investments. Based on its 2014 Annual Report, the production figures reported in the past financial year have been very disappointing and below par (Range Resources Ltd., 2014). On one hand, Range Resources Ltd. has made significant developments to boost its operations and productivity. On the other hand, these developments have not generated encouraging production figures as expected. From a strategic point-of-view, the firm is experiencing difficulties in translating its strategic initiatives and significant development to acceptable returns and profits. There is a mismatch in the company's significant developments and operational improvements and its profitability and success in the market.

SWOT Analysis of Range Resources Ltd.

Range Resources Ltd. has several strengths, weaknesses,...

The strengths of this company include an extensive acreage in Trinidad, favorable operating environment in onshore drilling projects, huge reserves, and strong equity financing. However, the weaknesses of the companies include disappointing production results, inability to deliver acceptable returns, huge debts, and poor performance of its share. The opportunities for Range Resources Ltd. are increased growth and revenue through effective use of production acreage and investment in research and development. In contrast, the threats are poor market conditions, price fluctuations, decline in mature assets, intense competition, and government and environmental regulations.
Market Analysis of Oil and Gas Industry

As previously mentioned companies that operate in the oil and gas industry such as Range Resources Ltd. are experiencing difficulties in this financial year. This is primarily because of the current pricing environment, which is characterized by constant fluctuations in prices of oil. The other factor that has fueled this difficulty is the increased focus on strategies for big companies like Shell and Exxon, which enhances the difficulties for more junior operators in the sector. For small companies, these difficulties are very tough as evident in the poor price performance of oil and gas shares in London's junior stock exchange based on reports in the Alternative Investment Market (Mainwaring, 2015). Junior operators in this sector are experiencing difficulties in delivering meaningful returns in the current pricing environment.

According to Burgess & Kavanagh (2015), small firms in the industry like Range Resources Ltd. will find it difficult to deliver acceptable returns if these price fluctuations persist. The impact of these challenges on the operations of the firms is evident in the poor performance of their share price on London's junior stock exchange. Foster (2015) state that the prospects of numerous Alternative Investment Market (AIM) resource stock is seemingly grim while investors are increasingly giving the industry negative treatment. Based on the latest online monthly report for London's junior market, only one-third of the 99 businesses organizations in the oil and gas industry traded on AIM generate any revenues (Foster, 2015). Most of these companies are not in a strong financial position because of the savage decrease in the prices of oil. These unfavorable market conditions have contributed to huge pressure on industry spending, which is rapidly declining (Critchlow, 2015). The other market factor is the rapid decline of mature assets is also fueled by increased growth of global demand for energy, which is characterized by a limited global supply of crude and hydrocarbon products.

PESTLE Analysis of Range Resources Ltd.

Political factors in oil and gas industry where Range Resources Ltd. operates are influenced by volatility of crude oil prices given the necessity of this commodity across the global. The political environment has been characterized by increased policy initiatives by policymakers to help control prices. Policymakers in this sector have set policies that seemingly favor big companies like Shell and Exxon with regards to pricing. From an economic perspective, Range Resources Ltd. faces an unfavorable pricing environment and price fluctuations. Moreover, the company's share price has been performing poorly similar to other junior operators, which has affected growth and revenue. The social factors affecting the operations of the firm include cultural aspects for its production initiatives in Trinidad and other regions as well as health and safety concerns regarding its production procedures. From a technological perspective, Range Resource Ltd. has minimal investments in research and development and has not effectively adopted technological tools for its production processes. Legal factors affecting the firm's operations include health and safety regulations, discrimination laws, employment law, and consumer law. Environmental factors associated with the company's operations include climate change concerns and the environmental impacts of crude oil, which have hindered its ability to expand operations.

Porter's Five Forces Analysis of Range Resources Ltd.

Apart from political, economic, social, technological, legal and environmental factors affecting the operations of Range Resources Ltd., the company's position can also be understood through conducting a Porter's five forces analysis of its industry. The rivalry in the oil and gas industry is high, especially from big companies that have high economies of scale as compared to junior operators like Range Resources Ltd. The intense competition in the industry is also fueled by price wars, the market share of big companies, and decline in production. The threat of new entrants is low because of significant barriers to entry including economies of scale, product differentiation, resource ownership, government regulations, and huge capital requirements (Hokroh, 2014, p.77). The threat of substitutes is high because of increased consideration of alternative sources of energy given the environmental impacts of crude…