Key management objectives
Antero Resources (AR) has taken several steps to counter lower commodity prices. In this series, we’ve already discussed some of these steps taken, such as hedges (Part 6) and reductions in well costs (Part 7). AR has also reduced its 2016 E&P (exploration and production) capex (capital expenditure) by 22% from 2015. The E&P budget for 2016 is $1.4 billion.
AR expects to increase its production in 2016, despite these capex cuts. Antero expects to see a 20% rise in its 2016 production over 2015 levels. Most of this growth is likely coming from its liquids production in 2016.
In 2016, AR is primarily dedicated to drilling and completions. Segment-wise, the Marcellus Shale will receive the lion’s share in AR’s 2016 capex.
Antero’s well completions
AR’s November 2016 presentation noted that it plans to develop 1,000 horizontal locations in the Marcellus Shale and Ohio Utica Shale by the end of 2020, utilizing only 25% of its current 3P (proven and probable) reserves.
Antero has completed 33 wells year-to-date, in the Marcellus Shale using advanced completions, which AR defines as “completions using more than 1,300 pounds per foot of proppant.”
AR also noted the following in its 3Q16 earnings conference: “The aggregated production from these wells is tracking the 2.0 Bcf-per-1,000 type curve. This improvement in recoveries has really been a key driver behind the overall production outperformance we’re seeing on a company-wide basis this year.”
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