Current AR Stock Info

87% of the Antero reserves are Marcellus shale gas, 13% Utica

Antero Resources (ticker: AR) announced reserves estimates Feb. 1, showing an increase of 16% over the year.

Proved reserves increased to 15.4 Tcfe at year end 2016, up from 13.2 Tcfe, representing growth of 16%. These reserves are comprised of 61% natural gas, 37% NGLs and 2% oil. 87% of these proved reserves are from Marcellus shale holdings, while the Ohio Utica accounts for 13%. 3P (proved, probable, and possible) reserves increased by 25% in 2016 to 46.4 Tcfe.

Antero Resources’ Reserves Climb 16% to 15.4 Tcfe

Source: Antero February 2017 Presentation

Improved drilling techniques pay off

2.6 Tcfe of proved reserves was added through the drill bit, the company said.

Much of this increase is due to longer laterals, improved completion techniques, and operational efficiencies. Estimated drill bit finding and development cost for 2016 was $0.39 per Mcfe.

These operational improvements include reducing drilling time by 60% and lowering well costs by 35% since 2014. Increased proppant per foot has driven an increase in EUR per 1,000’ of 33% in the Marcellus and 20% in the Utica, Antero said.

With 170 wells planned to be drilled in 2017, 190 planned in 2018 and 2019, and 255 planned in 2020, Antero expects to maximize the improvements.

The company estimates that its 8.5 Tcfe of proved undeveloped reserves will require $3.8 billion in development capital, giving a future development cost of $0.45 per Mcfe.

Ethane contract with Shell adds reserves

1.4 Tcfe of ethane reserves were also added in 2016. This is the result of Antero’s ethane sales contract associated with a Shell ethane cracker in Pennsylvania which is expected to be placed in service in 2021. This adds to Antero’s contracts with Borealis Stenungsund, an ethane cracking facility in Sweden, and the proposed Braskem plant in West Virginia.

Antero also reclassified 2.5 Tcfe of proved undeveloped reserves as probable reserves in 2016 to comply with SEC regulations. Under SEC reporting rules, proved undeveloped reserves are limited to reserves that are planned to be developed within five years of initial booking. These reclassified locations were displaced by locations that are more liquids-rich with better economics.


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