Antero Resources Corp., Denver, has set its 2017 capital budget at $1.5 billion, up 7% from 2016. The total includes $1.3 billion for drilling and completions and $200 million for core leasehold additions and extensions.
Net production for the year is expected to average 2,160-2,250 MMcfd of gas equivalent, representing year-over-year growth of 20-25% from its 2016 guidance. Antero expects to recover 19,000 b/d of ethane, of which 11,500 b/d will service an ethane sales agreement with European polyethylene and polypropylene producer Borealis AG once the Mariner East 2 pipeline is in service, which is currently expected in the fourth quarter.
“Based on current strip prices, we are targeting 20% to 22% compound annual production growth from 2018 through 2020,” said Paul Rady, Antero chairman and chief executive officer. “This is driven by a modest annual increase in drilling and completion capital beginning in 2018, while maintaining significant liquidity and a declining leverage profile.”
About 70% of the drilling and completion budget for 2017 is allocated to the Marcellus shale and the remaining 30% is for the Ohio Utica shale.
Antero plans to operate an average of 4 drilling rigs in the Marcellus in West Virginia in 2017 and expects to complete 135 wells with an average lateral length of 9,200 ft. Forty of the 135 completions are previously drilled but uncompleted (DUC) wells carried over from 2016.
The development plan in the Marcellus averages 9 wells/pad in 2017, up from 6 wells/pad in 2016, as the company continues to drive well efficiencies. Antero is currently drilling and completing wells at an average budgeted cost of $840,000/1,000 ft of lateral, a 30% decrease from 2015 completed well costs.
Antero plans to operate an average of 3 drilling rigs in the Ohio Utica in 2017 and expects to complete 35 wells with an average lateral length of 9,700 ft. The development plan in the Utica averages 6 wells/pad in 2017. Antero is currently drilling and completing wells at an average budgeted cost of $999,000/1,000 ft of lateral, a 28% improvement over 2015 well costs.
The firm’s Ohio Utica activity, however, is contingent on the construction timetable for the Rover pipeline for which Antero is an anchor shipper. If the project is delayed beyond the second half planned in-service date, Antero intends to shift the appropriate amount of budgeted drilling and completion activity from the Utica to the Marcellus.
Antero says it has additional firm transportation capacity to current favorably priced markets in the Marcellus beyond the 2017 forecasted growth.