Antero Resources Corp. of Denver is slowing completions this year after placing 415 horizontal wells total on stream in the Marcellus and Utica shale plays since 2009, and the company calls itself among the most highly hedged US exploration and production companies currently.
Executives said Antero has hedges in place for 1.8 tcf equivalent of gas production at an average $4.42/MMbtu to help protect cash flow from falling commodity prices.
Moody’s Investors Service on Feb. 26 upgraded Antero Resources ratings and said its outlook was stable.
Stuart Miller, Moody’s vice-president and senior credit officer, said, "Antero’s low finding-and-development costs and significant commodity hedge position should allow the company to continue to prosper despite today’s low commodity-price environment."
The independent announced a $1.8 billion budget for 2015, down 41% from 2014, and executives plan to defer completions in the Marcellus during the second half.
The independent’s 2014 net daily production averaged 1,007 MMcf/d equivalent, up 93% from 2013. Executives said 2014 production was 86% natural gas, 12% natural gas liquids, and 2% crude oil.
Production still climbing
Paul Rady Antero’s chairman and chief executive officer, expects production will climb 40% during 2015 despite the slowing completion rate. He foresees improved operating efficiencies.
"We have adjusted our Marcellus plan so that we can sell the vast majority of our gas into more favorable markets," after more pipeline infrastructure is completed, he said. "We will continue to monitor commodity prices throughout the year and may revise the capital budget lower if conditions warrant."
Antero has more than 148,000 net acres of leases in eastern Ohio’s rich gas-condensate window of the Utica shale. It also has more than 395,000 net acres in the southwestern core of the Marcellus in northern West Virginia and southwestern Pennsylvania.
In addition, Antero estimates 189,000 net acres of its Marcellus leases are prospective for the slightly shallower Upper Devonian shale and 170,000 net acres of its Marcellus leases are prospective for the deeper Utica shale.
Antero’s $1.6 billion drilling and completion budget represents a 33% reduction compared with the 2014 budget. This year’s lower budget includes a reduced rig count and the deferral of 50 Marcellus well completions until 2016.
During a webinar to analysts and investors, Rady said 59% of the drilling and completion budget was allocated to the Marcellus and 41% to the Utica.
During 2015, Antero plans to operate an average of 9 drilling rigs in the Marcellus in West Virginia and 5 drilling rigs in the Utica in Ohio. Antero expects to complete about 80 horizontal wells in the Marcellus and 50 horizontal wells in the Utica.
Antero Resources owns about 70% of Antero Midstream Partners LP, which had an initial public offering that closed in November 2014.
The 2015 Antero Resources budget excludes Antero Midstream Partners’ $425-450 million budget. Antero Midstream has gathering pipelines and compressor stations.
