Despite record third quarter production, Antero Resources Corp. continued to search for insulation against persistently low commodity prices, adding more hedges, cutting costs and inking another deal to send liquified natural gas (LNG) overseas.

The company produced 1.506 Bcfe/d in the third quarter, a 39% increase from the year-ago period and a slight increase from the 1.484 Bcfe/d it produced in 2Q2015. While the company remains on track to exceed its annual guidance of 1.4 Bcfe/d, sequential production growth has been kept at bay with a plan to defer 50 horizontal Marcellus Shale wells by the end of the year (see Shale Daily, Jan. 21).

But a shifting focus to liquids production in the Utica Shale to start the second half of the year led to 52,250 b/d of condensate, natural gas liquids (NGL) and oil production, or a 109% increase from the year-ago period and a 14% increase from 2Q2015.

The company’s hedge book helped to offset stagnant oil and gas prices. Antero said it realized combined natural gas, NGL and oil hedge gains of $206 million during the third quarter for an average all-in price realization of $3.83/Mcfe. The company continued to add hedges during the third quarter, bringing its position to 3.1 Tcfe through 2021 at an average fixed price of $3.93/Mcfe. The company said nearly all of its targeted 2016 production has been hedged at currently favorable prices.

The company reports third quarter financial results later this month.

Antero also signed a 10-year agreement to sell 70,000 MMBtu/d of natural gas to Chubu US Gas Trading LLC, an affiliate of Japan-based Chubu Electric Power Co. That gas would be sold through the Freeport LNG terminal in Freeport, TX.

Antero plans to begin shipping the gas from MarkWest Energy Partners LP’s Sherwood processing plant in West Virginia through the Columbia Gulf Transmission pipeline beginning in late 2018 or early 2019 when the Freeport facility is expected to be in-service. The company added that it would receive New York Mercantile Exchange-based pricing for those volumes.

In May, Antero said it would slow its Marcellus operations by the second half of the year and turn its attention to the Utica thereafter (see Shale Daily, May 1). In the Marcellus, where the company is currently running five rigs and two completion crews, the company completed and turned in-line six wells in the third quarter. It has 11 well completions planned there for this quarter.

In the Utica, where the company is currently running four rigs and three completion crews, the company completed and turned to sales 25 wells in the third quarter. It has 12 completions planned there for this quarter. Antero said it also has reached total depth and cased its first deep dry gas Utica well in Tyler County, WV (see Shale Daily, July 17). Costs in the Marcellus declined by 16% and costs in the Utica declined by 18% in the third quarter, mainly on service cost reductions and operational efficiencies, Antero said.