CLARKSBURG — Antero Resources will be laying off more than 250 contract land brokers operating in the region, a company official said Monday.
Al Schopp, Antero’s regional vice president and chief administrative officer, said the Denver-based exploration and drilling company is laying off the land brokers to “focus as much capital as we can into our drilling program.”
Schopp said the layoffs will only affect contract land brokers and not Antero’s employees.
“It’s not good news,” Schopp said. “It’s not what we like to see.”
Schopp attributed the layoffs to the low oil prices that have impacted many energy companies in recent months.
The low crude oil prices have put downward pressure on prices for the natural gas liquids Antero produces out of the Marcellus, Schopp said. Crude oil prices influence the market for natural gas liquids such as butane, isobutane and propane, he said.
“Those (natural gas liquids) have some correlation to oil prices, and those (natural gas liquids) are getting hit pretty hard,” Schopp said.
With these commodities commanding lower prices, the company has had to reevaluate how much capital it commits to land acquisition, Schopp said.
“With this price environment, we have a very strong inventory of drilling locations,” Schopp said. “With our extensive land position, we want to focus our capital on drilling and not on land acquisition at this point.”
Schopp said the company feels that prioritizing drilling instead of land acquisition will have the “best benefit to everyone” through royalties, severance tax revenues and additional production.
Charlie Burd, executive director of the Independent Oil & Gas Association of West Virginia, said the news is obviously disheartening for those contractors being laid off.
“We share in our concern that many employees would be laid off, obviously,” Burd said.
Faced with low prices for their products, many energy companies would opt to focus on extraction over acquisition, as Antero has done, Burd said.
“With this downward turn in oil prices, it probably is not uncommon that they would focus more on completing and drilling the assets that they have under lease until prices improve,” Burd said. “That would be the way most companies would choose to operate. They would say, ‘OK, we’re going to stop acquiring more leases and invest in the leaseholds we already have.’”
Though he said he can’t speak for Antero, Burd said he would imagine the company might return to acquiring more land leases once prices for natural gas liquids start to recover.
Staff writer Jeremiah Shelor can be reached at (304) 626-1409 or by email at jshelor@theet.com
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