More proppant, longer laterals and cost reductions prompted Appalachian pure-play Antero Resources Corp. on Tuesday to announce an increase in its full-year production guidance by 3% with an unchanged drilling and completion budget of $1.3 billion.
CEO Paul Rady said the company expects to average 1.84 Bcfe/d through the final six months of the year, when it also plans to accelerate activity for more growth in 2017. At the beginning of the year, Antero forecasted 1.715 Bcfe/d of production and later increased the total to 1.75 Bcfe/d (see Shale Daily, April 29). The company said on Tuesday that it now expects full-year production to be 1.8 Bcfe/d. The gas equivalent growth would also include an increase in liquids production to 73,000 b/d, up from its previous guidance of 66,000 b/d.
Antero has remained the Appalachian Basin's most active operator throughout the downturn. It has averaged six rigs in the Marcellus Shale and one rig in the Utica Shale this year. The increase in full-year production, the company said, is mainly the result of advanced completions, which find it using 1,200-1,500 pounds of proppant per foot. Recent pilot tests have gone higher to use 1,750-2,000 pounds per foot. More proppant has yielded higher estimated ultimate recoveries ranging from 2.0-2.3 Bcf per 1,000 feet of lateral, compared to the company's current type curve of 1.7 Bcf per 1,000 feet of lateral.
The company has placed 78 wells to sales this year in the Marcellus and Utica. Most of its activity has occurred in West Virginia's Marcellus as it awaits more takeaway capacity in Ohio’s dry Utica. Of the 52 wells Antero has completed in the Marcellus, the company said 29 have used more than 1,300 pounds of proppant per foot. A reduction in drilling days, more stages completed each day and longer laterals have also driven down costs and pushed up results.
Rady said the company has reduced its drilling and completion cost per 1,000 feet of lateral by 33% in both the Marcellus and Utica since 2014. Antero Midstream Partners LP also said Tuesday that its net income guidance would increase this year by $35-40 million to $205-225 million as the result of an increase in fresh water delivery volumes to the Antero wells using advanced completions. Gathering and compression throughput is also expected to increase at Antero Midstream.
Over the summer, Antero said it would bolt on 55,000 net acres in West Virginia in an acquisition from Southwestern Energy Co. (see Shale Daily, June 10). At the time, the company said the acquisition and cost reductions would allow it to add a rig later this year without increasing its budget. The uptick in activity, Antero said, would help it achieve up to 25% year/year production growth in 2017 with a budget similar to this year's.