Antero buys more mineral holdings in WV

KENNY KEMP | Gazette-Mail file photo
Paul Rady, CEO of Antero Resources, in March 2014.

Antero Resources, a Denver-based natural gas drilling company, has bought 55,000 net acres of mineral property in West Virginia for $450 million from Southwestern Energy, another company involved in the Marcellus Shale gas business in the northern half of the state.

The deal, which was announced on a conference call Friday morning, will increase Antero’s mineral holdings in West Virginia by roughly 10 percent, bumping the company’s lease holdings in the state from roughly 480,000 net acres to more than 535,000 net acres under lease.

The vast majority of the mineral rights that were purchased by Antero are in Wetzel, Tyler and Doddridge counties. The deal also includes a clause that could allow the company to purchase another 13,000 net acres from an unnamed third party for another $110 million.

Al Schopp, the company’s regional vice president, said the acquisitions in Tyler and Doddridge fill in areas where Antero already had significant holdings along U.S. 50, between Clarksburg and Parkersburg, and that the additional mineral tracts in Wetzel will allow the company to expand drilling operations into a section of the state they largely haven’t operated in before.

It also increases the size of Antero’s mineral holdings in the Utica Shale, a deeper shale formation that has been highly-touted by industry officials in the past year.

“We believe we are the preeminent West Virginia operator,” Schopp said, adding that other companies have looked to other parts of the country to invest. “We think the better way to spend our money is to consolidate in West Virginia.”

Antero’s expansion in West Virginia comes at a time when natural gas companies have come under pressure from lagging commodity prices, which are far below levels in 2014, and it signifies a large investment for Antero, when other companies in the industry are looking to shed some of their holdings.

In a press release, Southwestern officials said they had no intention of drilling the properties that were sold until 2023 and that the money gained in the transaction would be used to pay down the Houston-based company’s debt.

According to Antero’s federal financial reports, the company financed the $450 million acquisition by raising $762 million through a public stock offering of more than 26.7 million shares in the company.

“We’re very happy with it,” Schopp said. “It’s fully financed.”

Antero’s expanded investment in the Mountain State, Schopp said, was driven primarily by three things: the geology in the northern part of the state, the roughly 3,000 employees and contractors the company already has employed in the region and the West Virginia Legislature, which he said has shown a willingness to work with gas companies.

The company has been one of the biggest proponents of adopting a forced pooling law in West Virginia and has sued mineral owners in county courts.

It was also a major force behind other bills in the legislature earlier this year that would have made it easier to force people into a lease and harder for state residents to sue gas companies in nuisance lawsuits. None of those bills were passed.

In recent years, Schopp said the company has become more and more efficient at drilling and extracting gas from the Marcellus Shale in West Virginia, and Chad Green, the vice president of finance, said those efficiencies have made the company’s operations more profitable, even with low gas prices. The company has drilled between 300 and 400 wells in West Virginia to this point, Green said.

“Every day we drill a well we learn more. We believe from a drilling and cost basis that we can be one of the lowest cost producers,” Schopp said. “We believe we have a responsibility to continue drilling and keep people busy in this down time.”

Reach Andrew Brown at

andrew.brown@wvgazettemail.com, 304-348-4814 or follow

@Andy_Ed_Brown on Twitter.

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