Range Resources Corp. closed the $300 million sale of a proportionately reduced 1% overriding royalty in its Washington County, Pa., leases, and will use the proceeds to reduce debt, according to an Oct. 15 news release.

The properties include about 300,000 net surface acres, which produced about 1.7 Bcfe net per day during the second quarter. The overriding royalty applies to current and future Marcellus, Utica and Upper Devonian development, excluding shallower and deeper formations. Range Resources plans to use net proceeds from the deal to reduce debt by an expected 7%. The debt reduction would lower annualized interest expense by roughly $15 million, resulting in a net reduction of about $10 million in the company's cash flow in 2019.

"This sale and corresponding debt reduction — coupled with Range's consistent operational execution and beneficial exposure to improved liquids pricing — brings our projected year-end leverage below 3.0x debt to EBITDAX without additional sales," Range CEO Jeff Ventura said in the statement. "Range will continue to pursue asset sales to bring forward inventory value, high-grade the portfolio, and strengthen our financial position, with the focus of maximizing long-term shareholder returns."

Range will keep about 82% of net revenue interest on the Washington County acreage after the transaction closes. The company expects cash flow from the 1% overriding royalty to be about $25 million in 2019.

J.P. Morgan Securities LLC acted as financial adviser to the independent natural gas, NGL and oil producer on the transaction. Vinson & Elkins LLP acted as legal adviser.