Antero Resources | Anti-Drilling/Fossil Fuel | Economic Impact | Energy Companies | Industrywide Issues | New York | Statewide NY
Debunking the Divestment Meme: NY Teachers Invest $1M in Antero
We’ve reported on the divestment meme for years–the effort by anti-fossil fuel radicals to force banks and investment firms to withdraw funding and refuse to invest in (or lend money to) any company that produces “fossil fuels.” Most recently Jim Cramer from CNBC’s “Mad Money” said, “I’m done with fossil fuels. They’re done. They’re just done.” (see Jim Cramer Succumbs to the Dark Side – “Done with Fossil Fuels”) Cramer’s words seem to echo the sentiment of many in mainstream media. And yet…and yet, we have evidence that divestment is NOT happening. Not anywhere near the level anti-fossil fuelers would have you believe.
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For months MDN has brought you bits and pieces of news from individual drillers, detailing plans to cut back on spending for new drilling in the Marcellus/Utica in 2020. It’s not just happening in the M-U–it’s happening across the country. The experts at RBN Energy have a terrific new post that pulls information about major drillers scaling back into one place. They analyze spending by three different groups of drillers: oil-focused, diversified, and gas-focused drillers. In the third category, all but one of the gas-focused drillers have major operations in the M-U. The stats are sobering. As a collective group, M-U gas drillers have pledged to cut their 2020 budgets 25% from the already-lower spending that happened this year. Ouch.
Antero Resources is working hard to get the company on sound financial footing. That’s the message we took away from an announcement on Monday from the company that says (a) they’ve asked for and received a break in midstream (pipeline) prices from their own subsidiary, Antero Midstream, and (b) they’re putting some of their considerable Marcellus/Utica assets up for sale, hoping to raise upward of $1 billion.
Masquerading as a nonpartisan, independent nonprofit, the Institute for Energy Economics and Financial Analysis (IEEFA) reportedly “conducts research and analyses on financial and economic issues related to energy and the environment.” The Institute’s stated mission is “to accelerate the transition to a diverse, sustainable and profitable energy economy.” In other words, they’re anti-fossil fuels. We spotted an article appearing on OilPrice.com that quotes a new “study” issued by IEEFA. The article opens by saying, “drillers in Appalachia are in particularly bad shape.” Is it true? Is the end near? Is it a shalepocalypse?
Antero Resources, one of the biggest and best “pure play” drillers focused on the Marcellus/Utica (with major operations in West Virginia), released their third quarter update yesterday. The company reports producing an amazing 3.37 billion cubic feet equivalent per day (Bcfe/d) of natural gas production (32% liquids), while spending just $290 million to do it–the lowest quarterly spend since the company went public in 2013. On the down side, the company reported a $150 million net loss, but that’s mainly because of a one-time “impairment charge,” meaning it was a paper loss, not a cash out-of-pocket loss.
Quick: Which company which recently had a board and upper management shakeup and focuses exclusively on Marcellus/Utica drilling is the #1 natural gas producer in the United States? That’s right, EQT. In a list of the top 40 natgas producers in the U.S. (full list below), it’s striking to note that eight of the top 10 are focused exclusively or primarily on the M-U.
In 2016 WGL Midstream became an investor/joint venture partner in the Stonewall Gathering System, a system which gathers Antero Resources’ natural gas from several West Virginia counties (see 
The legal beagles at Vorys represented Antero Resources in a recently-decided case with far-reaching implications for Ohio drillers and landowners. The Vorys team won the case. As with most lawsuits, this one is complicated and gets in the weeds. The short short version is that under an original lease signed years ago, a landowner and drilling company (at that time) removed a section of the lease that allows the landowner’s property to be pooled (called “unitized” in Ohio) with other properties.
In Feb. 2016, lawsuits filed by some ~200 West Virginia residents against Antero Resources were combined into a class action (see 
Antero Resources sued EnerQuest Oil & Gas in a Texas court last year claiming EnerQuest had solicited and received trade secrets for a pair of landmen who live and work in Texas. A lower court dismissed the lawsuit based on a technicality (because the solicitation from EnerQuest came via email), claiming Texas does not have jurisdiction over the case. Antero disagrees and has just asked the Texas Supreme Court to review the case.
Antero Resources, one of the biggest Marcellus/Utica drillers (pure play) released first quarter 2019 numbers yesterday. The Mariner East 2 (ME2) pipeline, which Antero uses to ship and sell natural gas liquids (NGLs) had a huge beneficial effect for the company. Antero’s production was massive: 3.1 billion cubic feet equivalent per day (Bcfe/d) in 1Q19, up an astonishing 30% from 1Q18. But here’s the kicker: Nearly one-third of Antero’s production (29%) was NGLs. Without ME2, that big number would have been a small fraction of Antero’s production.