Antero set an initial capital budget for 2016 of $1.4 billion, a 23% reduction from the capital spend of $1.8 billion in 2015. The new sum includes a drilling and completion budget of $1.3 billion, a 21% reduction from the prior year’s total.
About 75% of Antero’s drilling and completion budget is allocated toward the Marcellus, with the remaining 25% going toward the Utica. The firm projects utilizing all of its 600,000 MMbtu/d of Rockies Express capacity during the year.
Antero attributes the overall spending reduction to capital efficiency improvements, cutting its rig count, and the deferral and carryover of a total of 70 Marcellus and Utica well completions into 2017.
Paul Rady, Antero chairman and chief executive officer, noted the firm is “well-positioned to accelerate activity as a result of our sizable inventory of drilled but uncompleted wells.”
Antero entered 2016 running 10 rigs, but for the year plans to average 7, of which 5 will be in the Marcellus and 2 in the Utica. With 6 drilling contracts expiring over the course of the year, the firm notes that it has the flexibility to reduce its capital budget further should market conditions deteriorate.
In the Marcellus, Antero plans the completion of 21 wells in its highly-rich gas-condensate regime and 59 in its highly-rich gas regime. In the Utica, Antero plans the completion of 11 wells in its highly-rich gas regime and 19 in its rich gas regime.
Companywide net production for the year, including liquids, is forecast to rise 15% to 1.715 bcfd of gas equivalent, up from the 2015 average net production of 1.493 bcfed. Net liquids production is forecast to increase 24% to 60,000 b/d in 2016, including 10,000 b/d of ethane and 3,500 b/d of condensate.
Glen Warren, Antero president and chief financial officer, noted, “We plan to continue delivering top-tier production growth, cash flow growth and margins in 2016, while continuing to target production growth of 20% for 2017.
“The ability to generate production growth of 15% in 2016 and target 20% in 2017, while reducing the 2016 budget by 23%, is a testament to the momentum we have established and efficiencies we have gained from having the largest and most active development program in Appalachia,” Warren said.