NEW ORLEANS, March 26 (Reuters) - U.S. natural gas producer Antero Resources Corp said on Monday it is eyeing options to mine its own sand for fracking to offset recent price increases.
The company, which produces in the Marcellus and Utica shale formations, has seen its sand cost rise markedly in the past year, Glen Warren, Antero’s president, said at the Scotia Howard Weil energy conference in New Orleans.
Sand is used as part of the hydraulic fracturing process to extract crude oil and natural gas from shale rock. It is typically mined from large deposits, many of which are located around the United States.
Sand, which is about 12 percent of the company’s well development cost, has been the only oilfield product in which the company has seen a large price increase. Antero is now eyeing ways to “self-source” the material, Warren said.
“We have a lot of initiatives underway to offset inflationary cost pressures,” Warren said at the conference.
Fellow shale producers, including Pioneer Natural Resources Co, have bought or developed their own sand mines to offset cost increases.
Antero has frack crews under contract for at least the next year at set prices, Warren said. (Reporting by Ernest Scheyder Editing by Jeffrey Benkoe)