Range Resources (NYSE: RRC) recently announced its third quarter production has jumped to 960 million cubic feet equivalent per day. That's a 21% boost over the prior quarter. The company owes it all to the Marcellus Shale.

It's a similar story at Cabot Oil & Gas (NYSE: COG). The company sees the shale gas it produces out of the Marcellus fueling production growth as high as 50% next year. That's on top of production growth that could top 54% this year. Cabot just loves its high return position in the Marcellus.

Because of the success both companies have enjoyed from that shale gas play, both are making moves to exit other areas of the country to focus more attention on the Marcellus. Range Resources, for example, sold some of its Permian Basin assets in New Mexico and West Texas earlier this year. The company was able to pick up $275 million in cash, which Range is reinvesting into its highest rate of return projects like the Marcellus Shale.

Even more recently Cabot Oil & Gas did something similar by shedding non-core assets in the Mid-Continent and West Texas. The company is picking up $188 million in cash in two separate deals. The idea behind that transaction was to accelerate value within its portfolio and to then redeploy the proceeds into its higher-returning projects in the Marcellus Shale.

So, just how good are the returns these two shale gas companies are earnings in the Marcellus? According to Cabot Oil & Gas its rates of return rival or exceed all of the top U.S. liquids plays even at current commodity prices. That's saying a lot because Cabot has an oil-focused initiative in the hot Eagle Ford Shale. The slide below shows just how good its Marcellus economics really are.

Source: Cabot Oil & Gas

Note that even with natural gas at $3.50 Cabot can earn a triple-digit internal rate of return on a well that costs it $6.5 million to drill and complete. Range Resources enjoys similar well economics. Range's dry gas wells enjoy a 96% internal rate of return at $4 natural gas while its super-rich gas wells return about 105%.

These returns, however, aren't enjoyed by all shale gas companies operating in the region. It's because location and cost matters. That's one reason why EXCO Resources (NYSE: XCO), for example, has chosen to change its growth model. It has gone from growing by the drill bit in places like the Marcellus to growing by acquisition. The reason is simple, the current economics for an acquisition remain more attractive to it than to drill. This actually led EXCO Resources to undertake one of the more complex energy deals of the year.

Because of low natural gas prices, the company has really ratcheted down its shale gas drilling in the Marcellus. The company only drilled a handful of wells this year. Instead, it turned its attention to the Eagle Ford. However, it needed to be creative to fund that drilling program by bringing in a financial partner. If everything goes according to plan EXCO Resources believes it will earn a return multiple of 1.2 times its invested capital.

Low cost producing shale gas companies like Range Resources and Cabot Oil & Gas don't need to embark complex financing techniques. Both companies generate a substantial amount of cash flow which is then reinvested into additional high returning wells. These two companies are simply operating in the best spots of the play, which when combined with low cost operations has yielded substantial financial returns.

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Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Range Resources. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.