Antero Resources 2018 – $398M Loss, Production Up 20%
Antero Resources, one of the biggest drillers in the Marcellus/Utica region (focused on wet gas drilling), released its full year and fourth quarter 2018 update last week. The company reports 2018 daily gas equivalent production averaged a record 2.7 billion cubic feet per day (Bcf/d)–up 20% over 2017. 4Q18 production averaged 3.2 Bcf/d, up 37% over 4Q17 (and up 18% from 4Q18). However, the company’s financial performance wasn’t as stellar.
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Yesterday MDN began our lead story about a big fine for Antero Resources by saying, “This has to be a record-high amount for a fine plus remediation work, at least in the Marcellus/Utica.” We humbly admit we were wrong. In checking our records, we found that in a similar case from 2014, Trans Energy paid even more, quite a bit more. We researched what this whole business is about, why Antero and others were fined, interviewing a top Antero official, and we now have a far better understanding of what happened and why.
This has to be a record-high amount for a fine plus remediation work, at least in the Marcellus/Utica. Antero Resources has cut a deal with three government entities–the U.S. Dept. of Justice, federal Environmental Protection Agency, and West Virginia Dept. of Environmental Protection–to pay a $3.15 million fine and spend another $8 million to mitigate and restore 32 sites in West Virginia.
There’s just no getting around the obvious–that the shale industry is once again heading into something of a dip. We’re not just talking about shale oil drillers scaling back drilling new wells in places like Texas and North Dakota. We’re talking about big gas drillers in the Marcellus/Utica who are signaling that 2019 will see less spending and less drilling, although production won’t decline.
Three years ago lawsuits filed by some 200 West Virginia residents against Antero Resources were combined into a class action lawsuit (see 
The expert analysts at RBN Energy have just published their “fourth and final” in a series of posts looking in detail at E&Ps (exploration & production companies, or “drillers”). One of the groups of E&Ps they examine are “gas-weighted” E&Ps–or drillers who mostly extract natural gas. In looking through the list, you immediately realize every one of them has operations in the Marcellus and/or Utica Shale region. Yes, a few also have operations in other plays, but they all have at least some operations here. The real value in the article is an accompanying spreadsheet comparing various financial metrics (apples to apples)–things like total revenue, lifting costs, production costs, and “pre-tax income,” meaning profitability. How do our drillers compare with each other?
We’re not quite sure how to tackle this story as there are so many aspects to it. Let’s start here: Two years ago lawsuits filed by some 200 West Virginia residents against Antero Resources were combined into a class action lawsuit. The lawsuits are called “nuisance” lawsuits because, according to the plantiffs, Antero is a nuisance to them (truck traffic, noise, lights at night, etc.). That massive class action lawsuit, filed in early 2016, is about to be heard by the WV Supreme Court–a court in disarray after all of its sitting justices were impeached and removed.
The Pareto Principle is alive and well in the Buckeye State. You may know it as the 80/20 rule, or in this case, the 75/25 rule. The rule that states roughly 80% of the results come from 20% of the effort. Last week MDN brought you the latest update from the Ohio Dept. of Natural Resources–their second quarter 2018 report showing all production coming from the Ohio Utica Shale (see 
We finally come down to the final two lateral pipelines for Rover. The Federal Energy Regulatory Commission (FERC) played a game of hardball with Energy Transfer (ET) over the Rover Pipeline. For months FERC refused to allow four Rover laterals–feeder pipelines to shuttle gas from where it’s produced into the main Rover pipeline–to start up (see