Antero Midstream Partners LP (AM) has released its capital budget and guidance for 2015. Let us first take a closer look at the partnership’s capital budget.
The partnership allocated capital budget of $1.8 billion for 2015, reflecting a 41% reduction from the 2014 capital budget of $3.05 billion. The budget decrease is primarily due to continuing capital efficiency improvements, a reduction in rig count and the deferral of 50 Marcellus well completions, which were previously scheduled for the second and third quarters of 2015, to 2016.
Of the total budget, drilling and completion budget is $1.6 billion, a 33% reduction from the 2014 capital budget of $2.4 billion. Other planned spending includes $50 million for fresh water distribution infrastructure and $150 million for core leasehold acreage acquisitions. The 2015 fresh water distribution infrastructure budget of $50 million has been reduced by 75% from the 2014 water infrastructure budget of $200 million. The 2015 budget includes the addition of 78 miles of pipeline and eight fresh water storage impoundments to Antero's fresh water distribution system. Since Antero has completed the majority of the main water trunklines within its consolidated acreage position, the 2015 water distribution infrastructure budget is focused on the extension to the existing system to accommodate the ongoing development program.
Approximately 60% of the drilling and completion budget is allocated to the Marcellus Shale and the remaining 40% is allocated to the Utica Shale. The partnership plans to operate an average of 14 drilling rigs between the Marcellus and Utica Shale plays in 2015, down from 21 at year-end 2014. Of this, nine drilling rigs would be in the Marcellus Shale in West Virginia and five would be in the Utica Shale in Ohio. Antero also plans to complete 130 horizontal Marcellus and Utica wells in 2015, down from 179 in 2014.
Of this, approximately 80 horizontal wells would be in the Marcellus Shale and 50 would be in the Utica Shale.
Net daily production for 2015 is projected to average 1.4 billion cubic feet equivalent (Bcfe), suggesting an approximate 40% increase over 2014's average net daily production of 1.0 Bcfe. Net daily liquids production for 2015 is projected to average 37,000 barrels per day (Bbl/d) (16% of total production).
In 2015, Antero plans to continue consolidating acreage in the core of the southwestern Marcellus rich gas play and the core of the Utica rich gas play in southern Ohio. However, given the current commodity price environment, Antero has reduced this year’s land budget by $300 million, or 67%, to $150 million.
Antero Resources is an independent natural gas and oil player engaged in the acquisition, development and production of unconventional liquids-rich natural gas properties located in the Appalachian Basin in West Virginia, Ohio and Pennsylvania.
Currently, Antero Midstream Partners carries a Zacks Rank #3 (Hold). Better-ranked players from the energy sector include Cheniere Energy Partners LP. (CQP), Spectra Energy Partners, LP (SEP) and Seadrill Partners LLC (SDLP). All these stocks sport a Zacks Rank #1 (Strong Buy).
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