Antero hits nat gas output record in 4Q

Pipeline expansions in the second half of 2018 helped Antero Resources boost its fourth quarter natural gas production rates to a record high.

The US Appalachian shale region-focused producer had fourth quarter output of 3.2 Bcf/d of natural gas equivalent (Bcfe/d) (91mn m³e/d), up by 37pc on the year and 18pc higher than third quarter production.

Antero's capacity on Columbia Gas Transmission and Tennessee Gas pipeline increased in the third quarter as a result of expansions on both systems. The producer also has capacity on the new 3.25 Bcf/d Rover pipeline and the new 1.5 Bcf/d Nexus pipeline, both of which began full flows late last year.

The producer is not yet filling up its pipeline capacity on Columbia Gas' 2.7 Bcf/d Mountaineer XPress expansion and on the Nexus pipeline.It expects its net marketing expenses to decline from a "manageable peak" this year of about 20¢/1,000 cf to less than 5¢/1,000 cf by 2022, chief financial officer Glen Warren said on an earnings call today.

The company is mitigating those marketing expenses by buying third-party gas, moving as much as 500mn cf/d onto its pipes to collect the spreads, chief executive Paul Rady said.

"We are offsetting a good many tens of millions of dollars of demand charges," he said.

About 2.5 Bcf/d of available capacity between the Mountaineer XPress and Nexus pipelines remains unfilled, but marketing spreads should improve as output grows from Appalachia, Rady said.

Antero's realized natural gas price in the fourth quarter was $3.83/1,000 cf before hedges, a 19¢/1,000 cf premium to the Henry Hub. The company expects its realizations in 2019 to range from a 15¢-20¢/1,000 cf premium.