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Antero Reserves Move Higher on Shorter Stage Length Completions

Appalachian pure-play operator Antero Resources Corp. added 1.5 Tcfe to its proved reserves during the first half of the year, mainly on a robust drilling program in the Marcellus and Utica shales, where shorter stage length (SSL) completions boosted well performance.

The company booked mid-year reserves of 9.1 Tcfe, up 19% from the end of 2013, it said. The Marcellus Shale accounted for 94% of proved reserves and the Utica Shale accounted for the remaining 6% at the end of June. Antero added 85 Bcfe of performance revisions in the Marcellus Shale primarily on SSL completions, which company officials said earlier this year would be the norm in the play going forward (see Shale Daily, Feb. 27). 

Antero currently is running 15 rigs in the Marcellus and five rigs in the Utica, where 26% of 488,000 net acres are classified as proved. Financial analysts at Wells Fargo Securities called the update impressive, but added that it came as no surprise given the depth of the company's program.

The value of Antero's proved reserves, or PV-10, also increased 28% to $9 billion, including hedges in the first six months, in part due to a gain in natural gas liquids (NGL). Overall, natural gas accounted for 87% of proved reserves, NGL accounted for 12% and oil made up 1%. NGLs and oil increased by 49 million bbl and 6 million bbl, respectively.

In April, Antero revised lower its estimated ultimate recoveries (EUR) in the Utica, raising concerns for analysts at the time (see Shale Daily, April 14). But based on the data it released with the mid-year update, analysts with Wells Fargo and BMO Capital Markets said Antero’s Utica wells appear to be performing inline with April estimates.

"On average these [Utica] wells were booked at EURs consistent with the company's published type curves," said BMO analyst Phillip Jungwirth. "We think this could remove some of the uncertainty around Utica well results performing in line with estimated recoveries."

Proved developed reserves at the end of June had increased 37% from the end of last year to 2.8 Tcfe. Antero added 59 Marcellus wells to that total, while in the Utica it added 22 wells. Proved, probable and possible (3P) reserves were up 7% from year-end 2013 to 37.5 Tcfe, of which 26.4 Tcfe were booked in the Marcellus. Those 3P reserves were primarily driven by 22,000 newly acquired net acres in Ohio and West Virginia.

Leasehold additions during the first six months of the year also increased the dry gas position in West Virginia and Pennsylvania from 139,000 net acres to 146,000 net acres. The company, along with others, is currently at work on its first Utica well in West Virginia, which it expects to complete during the second half of this year (see Shale Daily, May 16; March 26). 

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