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Houston — Appalachian Basin natural gas and NGLs producer Antero Resources will continue to hedge significantly, shed non-core assets and limit rigs in the field after low commodity prices led to a sharp second-quarter loss versus a year-ago profit, executives said July 30.

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The approach highlights efforts across the sector to reduce drilling and completion costs, pay down debt and hoard cash because while many are betting on improving prices and a pickup in demand in 2021, there is still much uncertainty about the trajectory of the coronavirus pandemic.

The fifth-largest gas producer in the US believes the historic times in the market require patience, even as some investors suggested during a conference call to discuss the latest financial results that the company may be able to add a second rig crew in some acreage to boost output further. Antero is looking at forecasts that say it may take several years for overall US NGL production to return to pre-virus levels.

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"At this point, there's no temptation to change our plan," Michael Kennedy, senior vice president of finance, said during the call. "We're pretty fixated on free cash flow and maintenance capital level, flat production. So not even considering that at this point."

Other gas producers in the US Northeast have been taking a similar approach. No. 1 US gas producer EQT said recently that over the balance of 2020 it would keep its annual production guidance flat at 1.45 to 1.5 Tcfe as it looks to strengthen its balance sheet with continued reductions in development, drilling and frack fleet costs.

For the April-June quarter, Antero reported a net loss of $463.3 million, or $1.73 a share, compared with a profit of $42.2 million, or 14 cents a share, in the second quarter of 2019. Revenue plunged 63% to $484.9 million from $1.3 billion in the year-ago period.

Net daily production in the second quarter averaged 3.52 Bcfe/d, an increase of 9% from the year-ago period and 4% from the first quarter, Antero said. Its average realized price after hedges declined 13% from $3.24/Mcfe in the second quarter of 2019 to $2.81/Mcfe in the second quarter of this year. Additional asset sales are expected during the second half of 2020, while average volumes of 3.5 Bcfe/d for the entire year are expected to be held flat in 2021.

The disappointing results came even as Antero sharply lowered its well costs in the prolific Marcellus shale. There, it placed 44 horizontal wells to sales during the second quarter with an average lateral length of 10,757 feet. Thanks to efficiencies, completions improved during the second quarter to 8.7 stages per day, a 23% increase from 7.1 stages per day in the prior period.

The costs saving efforts are seen as increasingly necessary because of significant volatility in the market since March.

Heading into next year, there may be reason for some optimism, Antero executives said.

"The pandemic impact on natural gas demand is expected to be less strong or impactful and of shorter duration than in oil, leading to an undersupplied gas market in 2021," President and Chief Financial Officer Glen Warren said on the call.

Still, he cautioned, "These are historic times and we continue to execute on our cost savings and debt reduction program."