Antero Resources Corp. continued favoring its Marcellus Shale assets in West Virginia during the first quarter, where it completed its longest lateral to date at nearly 14,400 feet.
The company joined peers Range Resources Corp., EQT Corp. and Southwestern Energy Co., which all reported record first quarter lateral lengths.
“As we continue to increase our laterals while making strides in drilling days and stages per day, we expect to achieve further efficiencies,” Antero CEO Paul Rady said during a call with financial analysts last week to discuss first quarter earnings. He added that management has not yet seen a loss of productivity from the longer laterals and remains optimistic about further development.
Antero brought online its first 10 Utica Shale dry gas wells in Ohio late last year when the Rover Pipeline’s Phase 1B entered service. Rady said the company “is very encouraged by the outperformance of this pad and the implications for dry gas Utica development in the coming years.” The company is also preparing to bring four of its longest lateral wells, at 17,400 feet each, to sales in the Utica.
Despite those gains, Rady said plans for the Utica this year remain unchanged, with 80% of the drilling and completion budget to be spent in the Marcellus.
The company is preparing to turn-in-line its two largest pads in the play. One 12-well pad has a combined lateral length of 120,000 feet, while the other 12-well pad has a combined lateral length of 106,000 feet. Antero expects to place the 24 wells to sales sometime in the next month.
The Marcellus also continues to drive natural gas liquids (NGL) production for the company. Antero became the nation’s largest NGL producer last year. Liquids production increased 4% year/year to 102,798 b/d in the first quarter but were down 4% sequentially. Antero attributed the sequential decrease to inclement weather and downtime at Appalachian processing plants.
Management said the Mariner East 1 outage did not significantly impact NGL production. The pipeline, still offline, was shut down by Pennsylvania regulators in March after three sinkholes formed near it. Owner Energy Transfer Partners LP expects the green light soon from regulators to restart operations.
Overall, Antero again reported record production of 2.376 Bcfe/d in the first quarter, up 11% from the year-ago period and up 1% from 4Q2017. Including hedges, average realized prices increased 6% year/year to $4.04/Mcfe in the first quarter. Revenue declined to $1.028 billion from $1.196 billion in 1Q2017. The decline included a $79 million writedown on unsettled hedges and a $16 million one-time loss on unsettled marketing derivatives.
Antero reported first quarter net income of $15 million (5 cents/share), compared with net income of $268 million (85 cents) in the year-ago period.