Antero Resources announced on February 17, 2016, the company’s capital budget and guidance for the 2016 fiscal year. 2016 capital spending will be reduced to $1.4 billion from $1.8 billion, a reduction of 23%. The new capital plan includes an average of 7 drilling rigs between the Marcellus and Utica shale plays, a 50% reduction form the 14 rigs operated in 2015. Antero plans to drill 110 wells in 2016, which includes a plan to exit 2016 with 70 drilled but uncompleted wells.
Net production is projected to grow 15% in 2016, with liquids projected to grow 24%. Antero has an aggressive hedging program for the increased production. 100% of the net natural gas and propane production is hedged at $3.92 per MMBtu. The Henry Hub price closed at $1.85/MMBtu on February 18, 2016. Antero’s hedge position would give them a 112% premium to current Henry Hub prices.
Commenting on the 2016 capital budget and guidance, Paul Rady, Antero’s Chairman and CEO, said, “Given the current commodity price environment, we have reduced our capital program by 23% as compared to last year. Further, we have structured our 2016 development program to give us significant operational flexibility to react to significant changes in commodity prices, up or down, throughout the year. We are in the unique position of having sold essentially all of our forecasted 2016 and 2017 production forward through hedging at attractive fixed prices.”
