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Antero Resources First Quarter 2021 Results

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   |    Tuesday,May 04,2021

Antero Resources Corp. reported its Q1 2021 results.

Q1 2021 Highlights:

  • Net production averaged 3,322 MMcfe/d, including 170,000 Bbl/d of liquids
  • Realized natural gas equivalent price averaged $4.03 per Mcfe, a $1.34 per Mcfe premium to NYMEX pricing
    • Realized C3+ NGL prices averaged $40.72 per barrel, or 70% of WTI, a 91% increase from the year ago period
  • Net loss was $15 million; Adjusted Net Income was $183 million (Non-GAAP)
  • Adjusted EBITDAX was $519 million (Non-GAAP); net cash provided by operating activities was $564 million
  • Drilling and completion capital expenditures were $141 million, a 54% decrease compared to the prior year period
  • Free Cash Flow was $416 million (Non-GAAP)
  • Net Debt at quarter end was $2.57 billion, a $433 million reduction from year end 2020 (Non-GAAP)
  • Net Debt to last twelve months Adjusted EBITDAX declined to 2.0x
  • Borrowing base under the credit facility remains unchanged at $2.85 billion
  • Established a new U.S. record for lateral feet drilled in 24 hours at 12,118 feet
  • Completion stages per day increased 19% from the 2020 average of 8.0 stages per day to 9.5 stages per day

Paul Rady, Chairman and Chief Executive Officer of Antero Resources commented, "Antero's first quarter financial results highlight our significant exposure to rising commodity prices.  As the second largest NGL producer and the largest NGL exporter in the U.S., our results benefited from strong international demand for LPG that resulted in C3+ NGL prices that were nearly double the prices realized last year.  This quarter's exceptional financial performance also benefited from our natural gas firm transportation portfolio that enabled us to sell natural gas at a $0.41 per Mcf premium to NYMEX."

Mr. Rady continued, "Antero's differentiated business model focuses on liquids rich development and a firm transportation portfolio that provides flow assurance and enables best in class price realizations.  In combination, these structural advantages generated Free Cash Flow of more than $400 million during the first quarter.  Based on today's strip prices, we forecast over $600 million in Free Cash Flow in 2021, which we will use for additional debt reduction."

Glen Warren, President, and Chief Financial Officer of Antero Resources said, "Since the start of our debt reduction program in the fourth quarter of 2019 we have reduced debt by $1.2 billion, including $433 million during the first quarter of 2021 alone.  This rapid debt repayment has allowed us to reduce our leverage to 2.0x this quarter and positions us to be well below 2-times in the coming quarters.  Additionally, we expect to achieve our goal of absolute debt under $2 billion in 2022, based on today's strip prices.  Once these balance sheet objectives are accomplished, we will be opportunistic in further debt pay down and begin to return capital to our shareholders."

First Quarter 2021 Free Cash Flow

Antero generated $416 million in Free Cash Flow after adjusting for working capital changes.  Free Cash Flow before Changes in Working Capital was $320 million during the first quarter. 


Three Months Ended
March 31,






Net cash provided by operating activities







Less: Net cash used in investing activities






Less: Distributions to non-controlling interests in Martica





Free Cash Flow







Changes in Working Capital(1)






Free Cash Flow before Changes in Working Capital








Working capital adjustments in 2021 include $60.5 million in changes in current assets and liabilities and $35.9 million in accounts payable and accrued liabilities for additions to property and equipment. See the cash flow statement in this release for details.

Firm Transportation Mitigation

During the first quarter of 2021, Antero was able to utilize its firm transportation portfolio to deliver natural gas volumes that realized a $0.41 per Mcf premium to NYMEX Henry Hub gas prices.  In addition, the firm transport delivered a net marketing gain during the quarter of $3 million, or $0.01 per Mcfe.

NGL Hedges

In order to lock in 2021 Free Cash Flow, Antero added C3+ NGL hedges focused on the summer months of this year.  The summer months historically experience lower seasonal demand and weaker pricing.  Hedges were executed on propane, normal butane, isobutane and pentane volumes.  Antero has hedged approximately 45% of expected C3+ NGL volumes during the second and third quarters of 2021 at an average price of $36 per barrel as of March 31, 2021.  This compares to a C3+ average realized price of approximately $18.75 per barrel during the second and third quarters of 2020.  Antero is unhedged on the majority of its fourth quarter 2021 and all 2022 C3+ NGL production as fundamentals remain strong for improved pricing during these periods. Please see the hedging table on page 5 for more details on Antero's hedge position.

First Quarter 2021 Financial Results

For the three months ended March 31, 2021, Antero reported a GAAP net loss of $15 million, or $0.05 per diluted share, compared to a GAAP net loss of $339 million, or $1.19 per diluted share, in the prior year period.  Adjusted Net Income (non-GAAP measure) for the three months ended March 31, 2021 was $183 million, or $0.62 per diluted share, compared to Adjusted Net Loss of $38 million during the three months ended March 31, 2020, or $0.13 per diluted share. 

Adjusted EBITDAX (non-GAAP measure) for the three months ended March 31, 2021 was $519 million, an increase of 113% versus the prior year period driven by higher realized natural gas and NGL prices and the Washington Gas Light Company (WGL) payment for natural gas sales. 

The following table details the components of average net production and average realized prices for the three months ended March 31, 2021:


Three Months Ended March 31, 2021











C3+ NGLs

















Average Net Production





















C3+ NGLs







Average Realized Prices












Average realized prices before settled derivatives

















Settled commodity derivatives












Average realized prices after settled derivatives

















NYMEX average price











Premium / (Differential) to NYMEX











Net daily natural gas equivalent production in the first quarter averaged 3.3 Bcfe/d, including 170 MBbl/d of liquids, as detailed in the above table.  Net gas equivalent production decreased 1% from the prior year period.

Antero's average realized natural gas price before hedging was $3.48 per Mcf, representing a 76% increase compared to the prior year period. The first quarter 2021 gas realization includes a $0.38 per Mcf gain from the payment received from WGL in February 2021 due to a favorable judgement on previously disclosed natural gas pricing contractual disputes.  Excluding this payment, Antero realized a $0.41 per Mcf premium to the average NYMEX Henry Hub price by capitalizing on its premium firm transportation. 

Antero's average realized C3+ NGL price before hedging was $40.72 per barrel, a 91% increase versus the prior year period.  Antero shipped 49% of its total C3+ NGL net production on Mariner East 2 for export and realized a $0.02 per gallon premium to Mont Belvieu pricing on these volumes at Marcus Hook, PA.  Antero sold the remaining 51% of C3+ NGL net production at a $0.06 per gallon discount to Mont Belvieu pricing at Hopedale, OH.  The resulting blended price on 110,289 Bbl/d of net C3+ NGL production was $40.72 per barrel, which was a $0.02 per gallon discount to Mont Belvieu pricing.  Antero expects to sell at least 50% of its C3+ NGL production in 2021 at Marcus Hook for export at a premium to Mont Belvieu.  Antero exports a larger proportion of its C3+ NGL during the summer when lower seasonal demand reduces domestic pricing.  The average realized price for C3+ NGLs is forecasted to be in the range of $0.00 to a $0.05 per gallon premium relative to Mont Belvieu pricing in 2021.


Three months ended March 31, 2021


Pricing Point


Net C3+ NGL




% by



Premium (Discount)

To Mont Belvieu


Propane / Butane exported on ME2

Marcus Hook, PA







Remaining C3+ NGL volume

Hopedale, OH







Total C3+ NGLs/Blended Premium  







All-in cash expense, which includes lease operating, gathering, compression, processing and transportation, production and ad valorem taxes was $2.26 per Mcfe in the first quarter, an 8% increase compared to $2.09 per Mcfe average during the first quarter of 2020.  The increase from a year ago was due primarily to an increase in gathering, processing and transportation expense driven by higher fuel costs as a result of higher natural gas prices and $12 million in incentive fee rebates earned during the three months ended March 31, 2020 that were not earned in the first quarter of 2021.  Transportation expense increased $0.06 per Mcfe due to increased utilization on higher tariff pipelines into the Midwest, which in turn led to higher natural gas realizations.  Lease operating expense was $0.08 per Mcfe in the first quarter, unchanged from the year ago period.  Production and ad valorem expense was higher due to a $0.05 per Mcfe increase related to higher commodity prices and $0.02 per Mcfe related to WGL settlement expenses.

G&A expense was $0.13 per Mcfe, a $0.04 per Mcfe increase from the first quarter of 2020 primarily due to higher compensation expense that had been significantly reduced during 2020.  G&A expense is expected to be in the range of $0.08 to $0.10 per Mcfe for the remainder of 2021.

Antero realized a per unit net marketing gain of $0.01 per Mcfe in the first quarter, compared to a loss of $0.15 per Mcfe reported in the prior year period.  The improvement was due to higher third party marketing volumes and the mitigation of excess firm transportation expense. 

First Quarter 2021 Operating Update

Marcellus Shale — Antero placed 14 horizontal Marcellus wells to sales during the first quarter with an average lateral length of 14,297 feet. Eight of the 14 new wells have been on line for at least 30 days and the average 30-day rate per well was 29.5 MMcfe/d, including approximately 1,605 Bbl/d of liquids assuming 25% ethane recovery.  The average lateral length for the eight new wells is 14,568 feet.  Production rates from these eight wells are expected to continue to increase as volumes approach peak levels during the 30 to 60 day period.

Antero drilled an average of 7,507 feet per day in the lateral in the first quarter, a 17% increase over the full year average in 2020. Further, we established a new U.S. record for lateral feet drilled in a 24-hour period at 12,118 feet.

Antero's ongoing emphasis on completion efficiencies resulted in a record 9.5 stages completed per day during the first quarter, a 19% increase from the 8.0 stages per day average in 2020.  Completion stages per day benefited from Antero's first simulfrac completion process on a 6-well pad, which allows two separate wells to be completed at the same time. 

Antero is currently operating three drilling rigs and two completion crews.

First Quarter 2021 Capital Investment

Antero's accrued drilling and completion capital expenditures for the three months ended March 31, 2021, were $141 million.  In addition to capital invested in drilling and completion costs, the Company invested $15 million in land during the first quarter.  For a reconciliation of accrued capital expenditures to cash capital expenditures see the table in the Non-GAAP Financial Measures section.

Balance Sheet and Liquidity

As of March 31, 2021, Antero's total debt was $2.57 billion, of which $143 million were borrowings outstanding under the Company's revolving credit facility.  Antero has a borrowing base of $2.85 billion with lender commitments that total $2.64 billion.  After deducting letters of credit outstanding of $742 million, the Company had approximately $1.8 billion in available liquidity at March 31, 2021.  Net debt to trailing twelve month Adjusted EBITDA ratio (non-GAAP) was 2.0x as of March 31, 2021.

Commodity Derivative Positions

As of March 31, 2021, the Company has hedged 1.1 Tcf of natural gas at a weighted average index price of $2.66 per MMBtu through 2023 with fixed price swap positions.  Antero also has oil and NGL fixed price swap positions.

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