Antero explains impact of Marcellus efficiency gains

By Luke Geiver | April 30, 2018

After one quarter, Antero Resources is on pace to meet or exceed its projected production guidance for 2018. Despite difficult operation conditions and severe weather to start the year, Paul Rady, CEO of Antero, said the Marcellus- and Utica-focused operator is delivering record production. Through March, the exploration and production company has completed 21 wells. After the second quarter, Antero believes it will complete another 44 wells. In the liquids-rich Marcellus, Antero is just starting a 12-well pad that will need roughly 120,000 feet of lateral well bore space between the 12 wells.

The company’s ability to drill faster and complete more stages per day could pay major dividends for Antero, Rady believes. This quarter, Antero is drilling wells in roughly 10 days, a major improvement from the 26-plus days required in 2014. With completions, Antero is now accomplishing just over 5 well completion stages per day in it’s Marcellus wells. In the previous quarter, well completions per day never surpassed the five-per-day mark.

“Our ability to sustain higher stages per day would not only provide incremental well cost savings but it would also bring fourth production,” Rady said of the impact of more well completions per day. According to the company, an increase from 4.5 completed stage per day to 5.5 completed stages per day would represent savings of $90,000 per well.

Along with drilling days and completed stages per day, Antero has also improved its average lateral length per well numbers and the average number of lateral feet drilled per day. In the first quarter, Antero averaged more than 10,000 feet per lateral, the highest average ever for the company. And, on a per day basis, Antero is drilling close to 5,000 lateral feet per day.

“As we continue to increase our laterals,” Rady said, “we expect to achieve further efficiencies.”

The company is looking to improve efficiencies in each of three areas: drilling, completion spreads and sand.

For drilling rigs and related services, Antero intends to add fit-for-purpose rigs with dual operation capabilities to improve cycle times, improved drill-out efficiency and to increase penetration rates with new downhole motors.

On the completion spread and services side, Antero wants to mesh concurrent operations with larger pads to allow for simultaneous drilling and completion and easier access. The company also wants to drill more wells per pad and automate completion equipment to increase the number of stages it can drill in one day.

For sand, Antero is looking to 100 mesh sand for easier pumping and fewer screen outs, self-sourcing sand to reduce supply cost and to leverage more northern white sand as the Permian becomes less reliant on the same sources of sand.

Through 2019, Antero has 100 percent of its completion spread under contract. Antero also has 100 percent of its 2018 rigs and 50 percent of its 2019 rigs under fixed rate contracts with average rig rates declining towards $17,500 per day in 2018 as higher rig rate contracts roll off, the company said.

Since 2014, Antero has reduced well costs by 42 percent. Of that, 46 percent is related to vendor cost reductions and the remaining 54 percent is linked to permanent cost efficiency gains.