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Antero to cut spending in 2019 on falling prices, still expects production gains

Antero Resources Corp. plans to reduce its drilling and completion capital budget in 2019 due to falling oil and NGL prices but still raise production totals, the Appalachian shale producer announced Jan. 8.

Antero will aim to spend $1.1 billion to $1.25 billion on a consolidated basis even though 2019 production is expected to increase 17% to 20% over 2018 guidance to a range of 3.15 to 3.25 Bcfe/d. If commodity prices decline further, President and CFO Glen Warren said, the company has "built in the flexibility to adjust our development plan accordingly."

The driller expects liquids volumes, including NGLs and oil, to average 154,000 to 164,000 barrels per day in 2019.

The affiliated Antero Midstream GP LP, meanwhile, anticipates $750 million to $800 million in capital expenditures in 2019 and forecasts adjusted EBITDA of $870 million to $920 million and distributable cash flow of $680 million to $730 million for 2019, alongside net income of $475 million to $525 million and a dividend of $1.23 to $1.25 per share.

"As a result of Antero Resources' double digit production growth guidance in 2019 and the assumed closing of our midstream simplification transaction, Antero Midstream expects to deliver peer-leading dividend growth of 37% in 2019 while maintaining [distributable cash flow] coverage in the 1.1x to 1.2x range," CEO Paul Rady said in a separate statement.

Antero Midstream GP in October struck a $5.8 billion deal to acquire its master limited partnership that is expected to close during the first quarter.