Antero Reports 78% Increase in Proved Reserves to 7.6 Tcfe

Source: 2/4/2014, Location: North America

Antero Resources proved reserves at December 31, 2013 were 7.6 Tcfe, a 78% increase compared to proved reserves at December 31, 2012, in each case assuming ethane rejection. Proved, probable and possible ("3P") reserves at year-end 2013 totaled 35.0 Tcfe, which represents a 62% increase compared to last year, assuming ethane rejection. Antero's December 31, 2013 proved and 3P reserves exclude 271 and 1,399 million barrels of ethane, respectively, which are not recovered in the Securities and Exchange Commission ("SEC") price case due to the relationship between assumed ethane and methane prices at year-end 2013.

Antero replaced 1,857% of estimated production in 2013 from all sources including performance and price revisions. Finding and development costs for proved reserve additions from all sources including costs incurred for drilling capital, acquisitions, leasehold additions and all price and performance revisions averaged $0.58 per Mcfe, based on preliminary unaudited capital expenditure amounts for 2013. Drill-bit only finding and development costs averaged $0.45 per Mcfe for 2013. Antero's proved developed reserve additions totaled 1,281 Bcfe on $1.6 billion of drilling capital for a development cost of $1.25 per Mcfe in 2013. The Company's reserve life of its proved reserves, based on estimated 2013 production, is approximately 40 years.

Proved Reserves
Proved reserves increased by 78% to 7.6 Tcfe as of December 31, 2013. The Marcellus Shale accounted for 95% of Antero's proved reserve volumes at December 31, 2013 and the Utica Shale accounted for the remaining 5%. Also at year-end 2013, 88% of Antero's proved reserves by volume were natural gas, 11% were natural gas liquids ("NGLs") and 1% was oil. As of December 31, 2013, 23% of Antero's 450,000 net acres of leasehold in the Marcellus and Utica was classified as proved. Based on Antero's successful drilling results to date, as well as those of other operators in the vicinity of Antero's leasehold, the Company believes that a substantial portion of its Marcellus and Utica Shale acreage will be added to proved reserves over time as more wells are drilled.

Antero added 3.7 Tcfe of proved reserves in 2013 primarily in the Marcellus Shale. NGLs and oil increased by 98 million barrels and 7 million barrels, respectively, due to Antero's 2013 drilling program targeting liquids-rich locations in the Marcellus and Utica Shales. Negative performance revisions of 157 Bcfe of proved reserves were due to the reclassification of 65 wells, or 374 Bcfe, to the probable category due to the SEC 5-year development rule partly offset by improved Marcellus well performance from SSL completions.

Proved developed reserves increased 117% from year-end 2012 to over 2.0 Tcfe at December 31, 2013. The Company added 113 Marcellus wells to proved developed reserves in 2013. These wells had an average estimated ultimate recovery ("EUR") of 10.6 Bcfe and an average lateral length of 7,308 feet. During 2013, Antero placed on line 26 Marcellus wells using SSL completions with encouraging results. Based on these results, Antero has increased its EUR per 1,000 feet of lateral by 18% to 1.73 Bcf for 1,768 gross SSL undeveloped 3P Marcellus locations out of the 3,067 total gross undeveloped 3P Marcellus locations, or 58%. Included in the gross SSL undeveloped 3P Marcellus locations are 91 gross SSL locations categorized as proved undeveloped out of the 665 total gross proved undeveloped Marcellus locations, or 14%. Antero has recently decided to complete virtually all wells in 2014 with SSL and expects further increases to the portion of gross undeveloped 3P Marcellus locations that assume SSL completions.

Antero added 11 Utica wells to the proved developed reserves category in 2013 consisting of 2 rich gas (1100-1200 BTU), 4 highly-rich gas (1200 to 1250 BTU) and 5 highly-rich/condensate (1250 to 1300 BTU) wells. The wells located in the rich gas and highly-rich gas regimes had an average EUR of 18.8 Bcfe (15% liquids) and 20.5 Bcfe (23% liquids), respectively, normalized to a 7,000' lateral. These EURs are consistent with previous estimates. Additionally, the wells located in the highly-rich/condensate regime had an average EUR of 11.3 Bcfe (32% liquids), normalized to a 7,000' lateral, representing an 18% decrease from previous estimates. This reduction was due to lower production performance from the highly-rich/condensate wells in 2013, which were producing in a high pressure (1100 psi) environment with no compression during the year.

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