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Antero Resources Annouces 2014 Capital Budget; Marcellus & Utica
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Antero Resources announced that it expects to invest approximately $2.6 billion in 2014 for drilling and completion, midstream and leasehold activities. The Company expects its average 2014 production to grow organically by 75% to 85% over estimated 2013 average net daily production and is guiding to an average 2014 net production range of 925 to 975 MMcfe/d.
2014 Capital Budget
Antero's capital budget for 2014 is $2.6 billion and includes $1.8 billion for drilling and completion, $600 million for the expansion of midstream facilities, including $200 million for fresh water distribution infrastructure, and $200 million for core leasehold acreage acquisitions.
All of the $1.8 billion drilling and completion budget represents Antero-operated drilling, with virtually all allocated to drilling liquids-rich horizontal locations utilizing shorter stage length completions. Approximately 75% of the drilling and completion budget is allocated to the Marcellus Shale and the remaining 25% is allocated to the Utica Shale. During 2014, Antero plans to operate an average of 14 drilling rigs in the Marcellus Shale, including three intermediate rigs that drill the vertical section of some horizontal wells to kick-off point, and 4 drilling rigs in the Utica Shale. Antero expects to spud 144 horizontal wells in the Marcellus Shale with an average lateral length of 7,700 feet and 49 horizontal wells in the Utica Shale with an average lateral length of 7,300 feet. The Company plans to complete 140 wells in the Marcellus Shale and 41 wells in the Utica Shale in 2014.
Antero has deep Utica rights on approximately 126,000 net acres of its West Virginia Marcellus acreage position and expects to drill and complete an exploratory Utica Shale dry gas well in the second half of 2014. Antero also plans to drill two three-well density pilots in the liquids-rich Utica Shale in Ohio with one using a 500 foot interlateral distance and the other using a 750 foot interlateral distance. Antero drilled and completed a 500 foot interlateral distance pilot in the liquids-rich Utica in 2013 with encouraging results to date. Antero's estimated Utica reserves and identified drilling locations are currently booked using 1,000 foot interlateral distance between horizontal laterals. A series of successful increased density pilots could result in a material increase in estimated reserves and identified drilling locations on all or a portion of Antero's Utica Shale acreage.
The 2014 midstream budget includes an additional 100 miles and 43 miles, respectively, of low-pressure and high-pressure gathering pipelines in the Marcellus and Utica Shale. The budget also includes the addition or expansion of five compressor stations in the Marcellus Shale with 305 MMcf/d of additional compression capacity. Further, the midstream budget includes 73 miles of permanent pipeline for Antero's fresh water distribution system. The midstream budget assumes the completion of an initial public offering of a master limited partnership ("MLP") owning substantially all of Antero's midstream assets during 2014.
In 2014, Antero plans to continue consolidating acreage in the core of the southwestern Marcellus liquids-rich play and the core of the Utica liquids-rich play in southern Ohio. The 2014 capital budget includes $200 million for acreage additions.
The following is a comparison of the 2013 capital budget to the 2014 capital budget.
The capital budget is expected to be funded through internally generated operating cash flow and available borrowing capacity under Antero's bank credit facility, as well as the anticipated proceeds from an initial public offering of an MLP owning substantially all of the Company's midstream assets.
