WHEELING, W.Va. — Amid low low oil and natural gas prices, both Antero Resources and Stone Energy are joining Gastar Exploration and PDC Energy in slashing their Marcellus and Utica shale drilling plans for this year.
The price of natural gas again dipped below $3 per 1,000 cubic feet Wednesday, down from $4.60 just two months ago, while oil prices remain around $47 per barrel, compared to $100 in July.
As a result, Denver-based Antero will trim its capital budget from $3 billion last year down to $1.8 billion in 2015, roughly a 41 percent cut. Meanwhile, Lafayette, La.-based Stone is slicing drilling funds from $895 million in 2014 to $450 million this year, approximately a 50-percent decrease.
Antero Chairman and CEO Paul Rady said the company – which has operations throughout eastern Ohio and northern West Virginia – will defer fracking 50 Marcellus wells that previously had been scheduled to start producing oil and gas by 2016 because of “unfavorable pricing markets.”
Rady then joined Gastar Senior Vice President Mike McCown in blaming a lack of operational pipeline infrastructure in the Marcellus region for the company’s challenges in the area.
“Consequently, we have adjusted our Marcellus plan so that we can sell the vast majority of our gas into more favorable markets. We will continue to monitor commodity prices throughout the year and may revise the capital budget lower if conditions warrant,” Rady said.
At least four major pipeline projects to do just that are in the works, but are not yet complete: the Atlantic Coast Pipeline, the Rover Pipeline, the Leach XPress and the Mountain Valley Pipeline.
Despite cutting back on drilling and fracking, Antero expects its daily production to reach 1.4 billion cubic feet this year, a 40 percent increase from 2014. The company expects to produce 37,000 barrels per day worth of natural gas liquids – primarily ethane, propane and butane – this year, driven by development in the wet areas of the Marcellus and Utica.
Even though Antero is cutting back on drilling, the company still plans to run nine rigs in West Virginia this year, with five more in Ohio. Projections are for fracking 80 Marcellus wells and 50 Utica wells.
“Our ability to generate production growth of 40 percent, while materially reducing the 2015 drilling and completion budget, is a testament to the momentum established and efficiencies attained from having the largest development program in Appalachia,” Rady added.
Stone Energy Chairman, President and CEO David Welch the company will not drill any new Marcellus wells after March 31, at least not for this year.
“In Appalachia, we drilled another 38 wells in the Marcellus Shale and averaged over 100 million cubic feet equivalent per day for the year, while our successful Utica test well confirmed the play on our acreage position for future development,” Welch said for 2014.
For 2016, Stone expects to receive a dual-purpose Utica and Marcellus rig that is capable of drilling in either shale formation, he added.
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