Antero Resources Builds Out Marcellus, Utica Gathering and Processing Capacity

Researched by Industrial Info Resources (Sugar Land, Texas)--Antero Resources Corporation (NYSE:AM) (Denver, Colorado) enjoyed a prosperous 2018, achieving record volumes for gathering, compression, processing and fractionation. The company, which holds assets in West Virginia and Ohio, added 760 million and 600 million standard cubic feet per day of compression and processing capacity, respectively, during the year. Industrial Info is tracking more than $1.4 billion in active projects involving Antero, about 30% of which is attributed to projects nearing or under construction.

Click on the image at right for a graph detailing Antero's active projects, by SIC classification.

Antero executives said in a quarterly earnings-related press release that the company invested $363 million in drilling and completions during fourth-quarter 2018, which included $273 million for drilling and completion activity, and $78 million for pads, roads and facilities. Largely as a result of these investments, Antero expects to be at the lower end of its 2019 drilling and completion capital budget of $1.1 billion to $1.25 billion.

"We enter 2019 with significant scale as the largest natural gas liquids (NGL) producer and the fifth largest natural gas producer in the U.S.," said Paul Rady, the chief executive officer of Antero, in the press release. "Driven by fourth-quarter capital invested on pads and roads, we expect to be in a position to invest at the low end of our 2019 drilling and completion guidance range. The 2019 budget represents a 20% reduction relative to capital spending in 2018."

Antero is seeking to bolster its gathering system in the Marcellus and Utica shales through the addition of 18 compressor stations traversing West Virginia and Ohio, two of which were completed last year in Tyler County, West Virginia. A third, $10 million compressor station in Tyler County is expected to be finished within weeks; others set to begin construction in the coming months include five compressor station, each valued at $10 million, in Wetzel County, West Virginia. For more information, see Industrial Info's project reports on Tyler 3, Wetzel 1, Wetzel 2, Wetzel 3, Wetzel 4 and Wetzel 5.

Antero also is part of a processing and fractionation joint venture with MarkWest Energy Partners LP, a subsidiary of MPLX LP (NYSE:MPLX) (Findlay, Ohio), which began civil construction on the $150 million first phase of the Smithburg Cryogenic Natural Gas Processing Complex in New Milton, West Virginia, during second-quarter 2018. The project, which is set to wrap up in the fourth quarter, is designed to process 200 million standard cubic feet per day of gas from the Marcellus Shale. For more information, see Industrial Info's project report.

Should the first phase prove successful, Antero is looking at future additional trains, each of which would add 200 million standard cubic feet per day of capacity: a $150 million second train, $150 million third train and $150 million fourth train. If approved, the fourth train would wrap up in the first quarter of 2021, although these three projects are in their preliminary phases and could face delays or cancellations. For more information, see Industrial Info's project reports on Train 2, Train 3 and Train 4.

Fracking projects remain controversial among many residents concerned about environmental side effects, which Antero is attempting to address with a major project that began construction in early 2016 that is expected to wrap up this quarter: a $275 million shale water treatment and recycling facility in New Milton. Roughly 60,000 barrels per day of wastewater trucked to the plant will be turned into fresh water and piped back to Antero's wells, conserving resources and bolstering efficiency. For more information, see Industrial Info's project report.

For the full year, Antero's net daily gas-equivalent production averaged 2.71 billion cubic feet per day, up 20% from 2017; proved reserves totaled 18 trillion cubic feet at the end of 2018, a 4% increase. About 28% of the gas- equivalent production for 2018 was liquids.

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