Antero trimming, delaying Marcellus drilling

Antero Resources Corp., Denver, has announced a $1.8 billion budget for 2015, which is down 41% from 2014. The independent said it plans to defer completions in the Marcellus shale during the second and third quarters to limit natural gas volumes sold into low-price markets.

Paul Rady, Antero chairman and chief executive officer, still expects the company will increase production 40% despite the drilling and completion reductions. He attributed that to operating efficiencies.

“Based on our projections for 2015, we will not have access to favorable markets for Marcellus gas in excess of the volumes included in our guidance until the previously disclosed regional pipeline project is placed into service, which is currently projected to be in the fourth quarter,” he said.

“Consequently, we have adjusted our Marcellus plan so that we can sell the vast majority of our gas into more favorable markets. We will continue to monitor commodity prices throughout the year and may revise the capital budget lower if conditions warrant.”

The $1.6 billion drilling and completion budget represents a 33% reduction in drilling and completion capital compared with the 2014 budget. The budget decrease is driven by a reduced rig count and the deferral of 50 Marcellus well completions from the second half of 2015 until 2016.

About 60% of the drilling and completion budget is allocated to the Marcellus and the remaining 40% is allocated 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.

Also this year, Antero plans to continue consolidating acreage in the core of the southwestern Marcellus rich-gas play and the core of the Utica rich-gas play in southern Ohio. But given current low commodity prices, Antero has reduced its 2015 land budget by $300 million, or 67%, to $150 million for 2015. The budget does not include acquisitions.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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