CHARLESTON, W.Va. — An annual report issued by Antero Resources projects that oil and gas production will increase by 20 percent in 2018.
“So we’ll drill, in West Virginia, 120 wells, but in 2012 terms, that’s 250 wells because we’ve developed twice as many minerals by extending the lateral length out twice as much,” Chief Administrative Officer and Treasurer Al Schopp said Wednesday on MetroNews “Talkline.”
Additionally, Schopp said that Antero Resources will pay close to $70 million in taxes this year to the state.
While that increase is staggering, Schopp said it’s not because production has been low in the industry’s downturn.
“We drilled right through it,” he said. “We never laid down all of our rigs. We continued to drill. That kept a lot of people employed, and we’re continuing to drill now.”
Antero Resources will spend over $1 billion in drilling completion and midstream costs this year in the state of West Virginia alone.
Not only is Schopp projecting this kind of production for 2018, but says he anticipates a 15 percent increase every year through 2022.
“The trend is up. West Virginia’s really been very good to Antero, its resources, our subcontractors and our employees,” he said. “It’s really the perfect trifecta. We’ve got the minerals here, we have the employees who want to work here and we have the legislative branch that’s willing to work with us to develop these prudent minerals in an environmentally safe way, and that’s why it works here in West Virginia.”
As the demand for oil and gas in countries abroad continues to dramatically increase, the one necessity West Virginia doesn’t currently have, Schopp said, is a system for international exportation.
Currently, Antero Resources ships natural gas out of Sabine Pass at the Texas/Louisiana border at the Gulf of Mexico, as well as Cove Point along the Chesapeake Bay in Maryland.
“You know, we have to look at this globally. We can be an exporter. All of this liquidfaction plants were built to import natural gas. They’ve all now been reversed, and now it’s a great export porogative for us to do trade imbalance and the rest.”
The solution, Schopp said, starts by fully capitalizing on the secondary and tertiary aspects of natural gas, such as ethane cracker plants.
“We’re the only operator or producer that’s stepped up so far to support every cracker that’s been proposed,” he said.
Schopp said he believes that hesitation of commitment is because the plants require 20-year supply contracts.
“That takes a bit of faith, but we’ve done it. We’ve made that commitment to these plants,” he said. “We need some other operators to step up to really get those commitments made so that they have that feed stock at a fair price.”
However, Schopp is optimistic that companies will begin to make that commitment, as developments such as the China Energy deal and the Appalachia Storage Hub restore some faith in the oil and gas industry.
“There is some buzz now. The hub is getting a lot of attention,” he said. “The game changer is to get those plants in here, the feed stocks here. Transportation is the biggest cost, and if that’s zero, it’s up to us as West Virginians to make this where they want to come.”