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Resources anterior (NYSE: AR) concluded +10.9% in Thursday trading finished its best so far this year, after reporting better-than-expected fourth-quarter earnings and saying it plans to cut its 2024 drilling and completion capital budget by 26% to $650-700 million.
The company it said it is reducing the number of plants it operates from three to two, and is eliminating one of its two completions teams.
It is “good to see operators clearly laying out plans to slow down D&C [drilling and completion] capital at current gas prices,” and the market should view Antero’s (AR) annual plan as “a welcome slowdown in spending and production,” TPH & Co. analyst Jake Roberts said in response.
Earlier this week, major natural gas producer EQT (NYSE:EQT) reduced its production guidance range for fiscal 2024 by approximately 50 billion cfe from recent forecasts to 2.2-2.3 t cfe, which it said includes some flexibility to reduce volumes if prices remain weak; production totaled 2,016T cfe in 2023.
“The market is calling for not only production cuts, but also reductions in activity,” Chief Financial Officer Jeremy Knop said on EQT’s (EQT) post-earnings conference call.
Additionally, Comstock Resources (CRK) said this week that it will reduce the number of plants it operates from seven to five and suspend its dividend until gas prices rise sufficiently.
U.S. natural gas prices have slumped to three-and-a-half-year lows, with the front-month contract falling 24% over the past eight days to settle at $1.581/MMBtu on Thursday.
“If drillers continue to announce indications of declining production and the weather stabilizes…natural gas could soon hit a near-term bottom with a possible relief rally expected,” energy consultancy EBW Analytics Group said .
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