Antero Resources (NYSE:AR) soared by +10.9% in Thursday’s trading, achieving its highest close of the year. The surge followed better-than-expected Q4 earnings and an announcement of a significant cut to its 2024 drilling and completion capital budget by 26%, down to $650M-$700M.
The company revealed plans to reduce the number of rigs in operation to two from three and to eliminate one of its two completion crews.
Analyst Jake Roberts from TPH & Co. voiced approval, stating, “It is good to see operators clearly lay out plans to slow D&C capital at current gas prices,” and suggested that the market should welcome Antero’s (AR) full-year plan as “a welcome slowdown in spend and production.”
These moves by Antero follow similar actions by other industry players. EQT (NYSE:EQT) recently adjusted its FY 2024 production guidance range by approximately 50B cfe, incorporating some flexibility to curtail volumes if prices remain weak. Meanwhile, Comstock Resources (CRK) announced a reduction in the number of rigs in operation from seven to five and a suspension of its dividend until gas prices recover.
These reactions come in response to U.S. natural gas prices, which have plummeted to three-and-a-half year lows. The front-month contract has fallen 24% in the past eight days, settling Thursday at $1.581/MMBtu.
Energy consulting firm EBW Analytics Group suggested, “If drillers continue to announce declining production guidance and weather stabilizes… natural gas may soon form a short-term bottom with an overdue relief rally possible.”
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