Antero Resources Corporation · NYSE:AR
Antero Resources — Q4 2016 Earnings Presentation
18 slides from Antero Resources's earnings presentation, Mar 1, 2017
Slide 1: Fourth Quarter 2016 Earnings Call Presentation
Fourth Quarter 2016 Earnings Call Presentation March 1, 2017
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation that addre
Slide 3: A Leading Consolidator in Appalachia
A LEADING CONSOLIDATOR IN APPALACHIA In 2016, Antero acquired 64,000 net acres in the Marcellus, virtually all of which is located in the Southern Rich and Dry Gas high-graded core areas 2016 Acquisitions and Recent Well Results Southern Rich High- Graded Core Average 2.0 Bcf / 1,000’ Wellhead EUR D
Slide 4: Continuous Operating Improvement
CONTINUOUS OPERATING IMPROVEMENT Driving drilling and completion efficiencies which continues to lower well costs Dramatic Decrease in Drilling Days Increasing Completion Stages per Day Drilling longer laterals while More efficient completions 45 reducing drilling days by 60% (“zipper fracs”) are in
Slide 5: Improved Productivity Drives Lower F&D Costs
IMPROVED PRODUCTIVITY DRIVES LOWER F&D COSTS Enhanced completion designs have contributed to improved recoveries and capital efficiency Increasing Proppant Per Foot Increasing Water Per Foot Higher proppant concentration has Higher proppant concentration contributed to higher recoveries requires inc
Slide 6: Marcellus Completion Evolution
MARCELLUS COMPLETION EVOLUTION Antero plans to continue to increase proppant intensity in 2017 primarily utilizing 1,750 and 2,000 lb/ft completions in the Marcellus 3,000 Per Well Frac Size Testing higher proppant loads in 2017 – Design (lb/ft) EUR impact positive based on 2,750 early results 2,500
Slide 7: Highest EBITDAX & Margins Among Appalachian Peers
HIGHEST EBITDAX & MARGINS AMONG APPALACHIAN PEERS Antero has extended its lead among Appalachian Basin peers in both EBITDAX and EBITDAX margin Quarterly Appalachian Peer Group Consolidated EBITDAX ($MM)(1) $500 Among Appalachian peers, AR has generated the highest EBITDAX $476 Y-O-Y AR: $168MM and
Slide 8: Largest Liquids-Rich Resource Base Complemented by Significant NGL Infrastructure Connectivity
LARGEST LIQUIDS-RICH RESOURCE BASE COMPLEMENTED BY SIGNIFICANT NGL INFRASTRUCTURE CONNECTIVITY Core Liquids-Rich Southwest Appalachia Undrilled Locations (1),(2) P5 P6 P8 P9 8% 5% 3% 3% P4 8% P3 9% 41% P2 P1 2,622 9% 14% 1. Peers include Ascent, CHK, CNX, EQT, GPOR, NBL, RICE, RRC, SWN. 7 2. Based o
Slide 9: A Rising Liquids Price Environment
A RISING LIQUIDS PRICE ENVIRONMENT An increase in Mont Belvieu pricing combined with an improvement in local differentials has resulted in meaningful upside to Antero’s realized C3+ NGL pricing Historical Guidance / Targets ($/Bbl) 2017 Guidance 2018E+ 2015A 2016A (Excl. ME2) (Incl. ME2) WTI Crude O
Slide 10: And Rapidly Growing NGL Production
AND RAPIDLY GROWING NGL PRODUCTION Antero is the largest NGL producer in the Northeast NGL Production Growth by Purity Product (Bbl/d) (Bbl/d) Ethane (C2) 160,000 C3+ Production Propane (C3) 140,000 Normal Butane (nC4) IsoButane (iC4) 120,000 Natural Gasoline (C5+) 100,000 20–22% Y-O-Y 86,500 Long-T
Slide 11: Provides Powerful Liquids Pricing Upside Exposure
PROVIDES POWERFUL LIQUIDS PRICING UPSIDE EXPOSURE Assuming $55 oil, 52.5% of WTI NGL realizations and 67,500 Bbl/d C3+ volumes, Antero should realize $332 million of incremental unhedged EBITDAX in 2017 (vs. 2016) Incremental Liquids-Driven EBITDAX vs. 2016 2016 NGL Pricing $1,600 62.5% of Increment
Slide 12: 2017 Guidance and Long Term Outlook
2017 GUIDANCE AND LONG TERM OUTLOOK (Bcfe/d) Production Growth: 4.0 3.5 Net Daily Production 3.0 Guidance 2.5 2.2 Long Term Targets 1.8 $3.70 Hedged Volume 2.0 $3.47 $3.91 $ Hedged Price ($/Mcfe) 1.5 $3.66 1.0 0.5 0.0 2016A 2017E 2018E 2019E 2020E 2017 Guidance 2018 - 2020 Long Term Targets Modest a
Slide 13: Significant Cash Flow Growth Drives Declining Leverage Profile
SIGNIFICANT CASH FLOW GROWTH DRIVES DECLINING LEVERAGE PROFILE Visible cash flow growth given hedges, firm transportation portfolio, and capital efficient long-term development plan targeting 20% to 22% production CAGR (1) Consensus EBITDAX $3,000 Production Guidance (Bcfe) 4.5 Production Targets (B
Slide 14: Capital Efficiency Driving Cash Flow Growth
CAPITAL EFFICIENCY DRIVING CASH FLOW GROWTH Antero’s capital efficiency has reduced outspend while maintaining its growth profile and is expected to continue delivering Cash Flow from Operations that exceeds D&C spending through 2020 D&C Capital Consolidated Cash Flow From Operations Production (MMc
Slide 15: Appendix
APPENDIX 14
Slide 16: Antero Resources – Updated 2017 Guidance
ANTERO RESOURCES – UPDATED 2017 GUIDANCE Key Operating & Financial Assumptions Updated Previous Key Variable 2017 Guidance(1) 2017 Guidance Net Daily Production (MMcfe/d) 2,160 – 2,250 2,160 – 2,250 Net Residue Natural Gas Production (MMcf/d) 1,625 – 1,675 1,625 – 1,675 Net C3+ NGL Production (Bbl/d
Slide 17: 2016 Segment EBITDAX and Capital Expenditures
2016 SEGMENT EBITDAX AND CAPITAL EXPENDITURES 1 Gathering and compression fees paid to Antero Midstream are included in Gathering, Processing & Transportation expense on stand-alone basis (eliminated on consolidated basis); Gathering and compression operating expenses borne by AM on stand-alone basi
Slide 18: Antero Resources EBITDAX Reconciliation
ANTERO RESOURCES EBITDAX RECONCILIATION EBITDAX Reconciliation ($ in millions) Year Ended Year 12/31/2015 12/31/2016 EBITDAX: Net income including noncontrolling interest $980.0 $(737.0) Commodity derivative fair value (gains) (2,381.5) 514.2 Net cash receipts on settled derivatives instruments 856.