Little changed for Appalachian pure-play operator Antero Resources Corp. during the first three months of the year, as production continued to steadily climb and the company kept realizing strong natural gas prices as the result of cold weather and its sharp focus on firm transportation.

The company reported first quarter production of 786 MMcfe/d for an increase of 105% from the prior year quarter and a 16% increase from the fourth quarter, when it produced 678 MMcfe/d (seeShale Daily, Feb. 27). CEO Paul Rady told financial analysts during a conference call to discuss earnings that those figures have Antero on track to meet its 85% production growth target this year.

The story for Antero last quarter, though, was about liquids and an impressive midstream portfolio. The company said it produced a record 16,332 b/d in net liquids, a 583% increase from the prior-year quarter that accounted for 24% of its revenues.

Much of that growth came from 24 new wells in the Marcellus Shale of West Virginia, where the company had 15 rigs running, and 12 new Utica wells in Ohio, where it had five rigs running. Rady said the company’s backlogged well inventory was still significant, however, with 76 wells still in various stages of development. He added that he expects that inventory to start dropping over the summer.

Antero continues to focus on firm transportation, compression and processing capacity. With additions the company has made in recent months and others it’s planning on, Rady said Antero is poised to amass 2.6 Bcf/d in firm transportation capacity by 2016. He estimated incremental additions will allow the company to ship 49% of its production to the Gulf Coast and 23% to lucrative Midwest pricing points, in addition to keeping another 28% in Appalachia.

“The ability to direct our gas to the Gulf Coast is strategic as we expect the vast majority of growth in gas demand and [natural gas liquids’] demand will occur on the Gulf Coast over the next five years,” Rady said.

Antero has announced a number of commitments for its production in recent weeks, including its request for MarkWest Energy Partners LP to add 200 MMcf/d of processing capacity at its Sherwood complex in West Virginia (see Shale Daily, May 7) and an agreement to be the anchor shipper for Odebrecht Organization’s planned ethane cracker in that state (see Shale Daily, March 26).

The company expects 1.15 Bcf/d of processing capacity in the Marcellus by early next year, while new compressor stations in the Utica added 240 MMcf/d of capacity there.

“We feel that we’ve got most of the elements in place so that we could add another rig up here if we wanted to,” Rady told analysts. “We’ve got excess capacity in processing as the compressor stations come on and with condensate stabilization we can handle more production…we think at the moment that we could accelerate a little bit.”

Rady stopped short of saying the company would add another rig in the coming months and it’s still forecasting 45-50% production growth next year. This year’s budget was increased, though, after the acquisition of 6,363 acres in Belmont and Harrison counties, OH, which Antero said provides it with another 29 gross 3P drilling locations (see Shale Daily, April 22).

Although the company reported a net loss of $95 million (36 cents/share) last quarter, compared to a net loss of $48 million (18 cents/share) in 1Q2013, mainly on unsettled hedges and stock compensation, it once again reported that its natural gas sold at an 11-cent premium to the average New York Mercantile Exchange price. Rady said he expects that trend to continue and the outlook to improve, given the companies growing midstream portfolio.

“Everyone knows the center of the natural gas business — the source of natural gas — is shifting to Appalachia in the Marcellus and the Utica. So, I think one wants to take advantage of backhaul and reversals in the first place and then talk about new builds after that,” he said. “We’re on the side of we feel good about the costs that we are taking on firm transportation and feel good about our economics, our cost structure and it’s the safest thing to do to make sure we can move our gas to markets and then focus very much on which markets we’re going to.”