Appalachian pure-play Antero Resources Corp. turned more wells to sales in the third quarter than it has during any period in its history following a packed stretch of activity that will allow the company to slow down as the year comes to an end.
The company turned 73 wells to sales during the quarter. Production also surpassed 3 Bcfe/d last month. CEO Paul Rady said the gains came earlier than expected, allowing the company to curb spending and pull forward some completions that were originally scheduled for early 2019 into the coming weeks.
“This level of activity could not have been achieved without the excellent coordination between our upstream and midstream businesses,” Rady said. “Due to the efficiency gains realized during the first nine months of 2018, which accelerated the completion pace and reduced completion crew needs, capital spending is expected to decline substantially during the fourth quarter of 2018 as we are currently operating only five drilling rigs and three completion crews.”
The company ran six completion crews in the first half of the year. Drilling and completion expenditures were $441 million in the third quarter, but they now are expected to drop to $200-250 million in 4Q2018.
Oil hauling constraints that Antero first reported in 2Q2018 on a lack of trucks and licensed drivers persisted in the third quarter, when the company was forced to curtail 86 MMcfe/d. That was down from second quarter curtailments of 100 MMcfe/d.
Management said the constraints have since been resolved, “as trucking capacity sufficiently met oil production and worked down an oil inventory surplus.” The company doesn’t anticipate further problems related to the issue.
Antero produced 2.718 Bcfe/d in the third quarter, including 129,352 b/d of liquids. Overall, production was up 17% from the year-ago quarter and 8% from 2Q2018. Total liquids production grew 15% year/year and was up 14% sequentially.
Antero, one of the nation’s largest natural gas liquids producers, has been intently focused on liquids-rich locations in the Marcellus Shale of West Virginia. Management said in August it does not plan to operate any drilling rigs or completion crews on drier acreage in Ohio for the rest of the year or in 2019.
The company did, however, turn 15 Utica Shale wells online as planned during the third quarter. The other 58 came online in the Marcellus.
Average realized prices, including hedges, increased to $3.98/Mcfe during the third quarter from $3.39/Mcfe in the year-ago period.
Antero reported third quarter revenue of $1.1 billion, compared with revenue of $648 million in the year-ago quarter, which was held back by an $877 million noncash loss on unsettled commodity derivatives. Management added that liquids revenue represented 43% of its total product revenue before hedges, an increase of 38% from 3Q2017.
Antero reported a net loss of $154 million (minus 49 cents/share) for the third quarter, compared with a net loss of $135 million (minus 43 cents) in 3Q2017. This year’s results included settled marketing derivative losses of $16 million.