Antero Feels Good, Increases Production Estimates for 2016
Antero Resources, one of the biggest drillers in the Marcellus, released their second quarter 2016 update in August (see Antero Resources Production Up 19% in 2Q16, but Loses $596M). As we noted at the time, Antero's natgas production was up 19% over 2Q15. However, the company also reported production was essentially flat (the same as) production during the first quarter of 2016. So it was a mild surprise to see Antero increase it's production "guidance" (estimate of how much production they will have) for 2016. The increase isn't much--just 3%--but Wall Street analysts and regulators watch these kinds of statements very closely. A lot rides on the accuracy of predictions like production numbers. The reason for the optimistic increase in production guidance? Antero is using more sand in its fracking, drilling even longer horizontal (or "lateral") wells, all while actually reducing the cost to drill each well. Result? Although Antero will still spend the same amount of money on drilling in 2016--$1.3 billion--they'll drill more wells with that money and those wells will be a tad more productive than they thought at the beginning of the year when they made their original estimates...
To view this content, log into your member account. (Not a member? Join Today!)