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JULY 2015 INVESTOR UPDATE – Antero Resources

Antero Resources · Jul 17, 2015 · 57 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 1
    Company Overview July 2015
  2. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 2
    WELL COST REDUCTIONS SUPPORT SUSTAINABLE BUSINESS MODEL Antero has reduced average well costs for a 9,000 lateral by 16% in the Marcellus and 18% in the Utica as compared to 2014 well costs, through a combination of service cost…
  3. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 3
    NGL EXPORTS AND NETBACKS STEP-UP BY 4Q 2016 Upon in-service of Mariner East II, Antero will have the ability to market its propane and n-butane to international buyers, providing uplifts of 0.14/Gal and 0.12/Gal, respectively, to the…
  4. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 4
    ANTERO TO DRILL UTICA DRY GAS WELL IN WV Antero plans to drill a dry gas Utica well in Tyler County, WV in 3Q 2015 Utica Shale Dry Gas Cross Section Illustrating Dry Gas Target Point Pleasant Target Point Pleasant…
  5. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 5
    LEADERSHIP IN APPALACHIAN BASIN Antero has the largest proved reserve base, the largest core liquids-rich acreage position and is one of the largest producers in the Appalachian Basin Top Producers in Appalachia (Net MMcfe/d) 1Q…
  6. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 6
    LEADING UNCONVENTIONAL BUSINESS MODEL Largest Core Liquids- Highest Growth Rich Position in Large Cap E&P Appalachia 2 3 Growth Liquids-Rich Most Active Operator Low Break-Even in Appalachia 1 4 Well Price Economics Drilling…
  7. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 7
    DRILLING MOST ACTIVE OPERATOR IN APPALACHIA COMBINED TOTAL 12/31/14 RESERVES Assumes Ethane Rejection Net Proved Reserves 12.7 Tcfe Net 3P Reserves 40.7 Tcfe Pre-Tax 3P PV-10 22.8 Bn 1H 2015 Avg SW Marcellus & Utica(2) Net 3P…
  8. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 8
    GROWTH HIGHEST GROWTH LARGE CAP E&P Anteros 40%+ production growth guidance for 2015 leads the U.S. large cap E&P industry(1) 45% 40%+ 35% 25.0% 24.3% 25% 21.2% 19.9% 19.9% 15% 14.0% 9.0% 8.5% 8.0% 5% 2.5% 0.4%…
  9. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 9
    GROWTH DEBT-ADJUSTED PER SHARE PRODUCTION Based on the strength of its drilling program, and focus on the highly prolific Marcellus and Utica Shale core areas, Antero has delivered 29% compounded annual growth in net debt-adjusted…
  10. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 10
    GROWTH STRONG TRACK RECORD NET PROVED RESERVES (Bcfe) AVERAGE NET DAILY PRODUCTION (MMcfe/d) Marcellus Utica Marcellus Utica Guidance 1,785 15,000 1,800 12,683 12,000 1,400+ 1,200 9,000 1,007 7,632 6,000 4,283 600 522 2,844…
  11. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 11
    LIQUIDS-RICH LARGEST CORE POSITION Antero has over 3,000 undeveloped rich gas locations with an average lateral length of 6,800 in its 3P reserves Antero has the largest core liquids- rich position in Appalachia with 385,000 net…
  12. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 12
    WELL ECONOMICS LOW BREAK-EVEN PRICE ECONOMICS Marcellus and Utica undeveloped 3P rich-gas locations have the lowest breakeven prices for both oil and natural gas compared to other U.S. shale plays North American Breakeven Oil Prices…
  13. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 13
    MIDSTREAM MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview(1) Antero Resources Corporation (NYSE: AR) 13.6 Billion Enterprise Value(1) Ba2/BB Corporate Rating 70% Limited Partner…
  14. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 14
    TAKEAWAY LARGEST FIRM TRANSPORTATION AND PROCESSING PORTFOLIO IN APPALACHIA Antero Long Term Firm Processing & Takeaway Position (YE 2018) Accessing Favorable Markets Chicago(1) Mariner East II (0.04) / 62 MBbl/d Commitment (0.06)…
  15. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 15
    TAKEAWAY NGL MARKETING GEOGRAPHICALLY DIVERSE MarkWest currently processes all of Anteros rich gas and markets all NGLs Mariner East II 61,500 Bbl/d AR Commitment(1) 4Q 2016 In-Service (2) 2015 NGL Marketing by Region…
  16. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 16
    HEDGING INTEGRAL TO BUSINESS MODEL Hedging is a key component of Anteros business model which includes development of a large, repeatable drilling inventory Antero has realized 1.3 billion of gains on commodity hedges over the past 6…
  17. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 17
    LIQUIDITY STRONG FINANCIAL LIQUIDITY AND DEBT TERM STRUCTURE Over 3.9 billion of combined AR and AM financial liquidity as of 3/31/2015 No leverage covenant in AR bank facility, only interest coverage and working capital covenants AR…
  18. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 18
    REALIZATIONS A LEADER IN REALIZATIONS & MARGINS AMONG LARGE-CAP APPALACHIAN PEERS Antero continues to be a leader in its peer group in price realizations and EBITDAX unit margins 1Q and 2Q 2015 Natural Gas Realizations (/Mcf)…
  19. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 19
    REALIZATIONS REALIZED PRICE ROAD MAP Anteros exposure to favorable gas price indices like Chicago, Gulf Coast, NYMEX and TCO is expected to increase to 94% by 2017 71% exposure to favorable price indices 85% exposure to favorable…
  20. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 20
    REALIZATIONS NGL REALIZATIONS AND PROPANE HEDGES Realized NGL Prices as % of WTI(1) 2015E NGL Price Road Map(1) (/Bbl) (% of Antero NGL Bbl) 120 Realized NGL C3+ Price 1% Ethane 100% Wtd. Avg. 100 94.10 98.01 93.03 Mont Belvieu NGL…
  21. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 21
    CATALYSTS 1 Large, low unit cost core Marcellus and Utica natural gas drilling Sustainability of inventory with associated liquids generates attractive returns supported Anteros Integrated by long-term natural gas hedges, takeaway…
  22. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 22
    ASSET OVERVIEW 23
  23. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 23
    WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT 100% operated RJ SMITH PAD Operating 7 drilling rigs including BEE LEWIS PAD 30-Day Rate 2 intermediate rigs 30-Day Rate 4-well combined 4-well combined 30-Day Rate of 410,000 net…
  24. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 24
    PROLIFIC PREDICTABLE RESULTS ACROSS ENTIRE MARCELLUS POSITION Anteros Marcellus well performance has continued to improve over time with a tight statistical range of results across its entire acreage position Marcellus PDP Locations…
  25. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 25
    INCREASING RECOVERIES AND LOW VARIANCE IN MARCELLUS Anteros Marcellus average 30-day rates have increased by 67% over the past two years as the Company increased per well lateral lengths by 12% and shortened stage lengths by 45%…
  26. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 26
    MARCELLUS WELL PERFORMANCE IMPROVEMENTS Increasing recoveries and efficiencies, through longer laterals, shorter stage lengths and faster drilling SSL completions drove a 21% decline in development costs in 2014 while lower service…
  27. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 27
    MARCELLUS ROR% AND GAS PRICE SENSITIVITY Large portfolio of Highly-Rich Gas/Condensate to Dry Gas locations Focused on drilling highly economic rich gas locations rig symbols represent current rig location by Btu regime Assumes…
  28. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 28
    WORLD CLASS OHIO UTICA SHALE DEVELOPMENT PROJECT 100% operated Cadiz Operating 4 drilling rigs Processing Plant 149,000 net acres in the core rich gas/ condensate window (71% includes processable rich gas assuming an 1100 Btu…
  29. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 29
    OHIO UTICA WELL PERFORMANCE IMPROVEMENTS Increasing recoveries and efficiencies through longer laterals, shorter stage lengths and faster drilling Lower service costs and efficiencies, and focus on liquids-rich locations, driving…
  30. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 30
    UTICA OHIO ROR% AND GAS PRICE SENSITIVITY Large portfolio of Condensate to Dry Gas locations Focused on drilling highly economic rich gas locations rig symbols represent current rig location by Btu regime Assumes 12/31/2014 WTI strip…
  31. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 31
    LARGE UTICA SHALE DRY GAS POSITION Antero plans to drill a dry gas Utica well in 3Q 2015 Utica Shale Dry Gas Acreage in OH/WV/PA(1) Antero has 224,000 net acres of exposure to Utica dry gas play Rice Hess Chesapeake Range Bigfoot 9H…
  32. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 32
    ANTERO WATER BUSINESS Antero has built an integrated water business to serve its water needs including fresh water treating and delivery for completions as well as handling, recycling and disposal of produced water AM has the option…
  33. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 33
    FIRM TRANSPORTATION AND FIRM SALES PORTFOLIO Columbia Tennessee Momentum III EQT REX/MGT/ANR 7/26/2009 9/30/2025 11/1/2015 9/30/2030 9/1/2012 12/31/2023 8/1/2012 6/30/2025 7/1/2014 12/31/2034 ANR Local Distribution Firm Sales 1 Firm…
  34. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 34
    HEALTH, SAFETY, ENVIRONMENT & COMMUNITY Antero Core Values: Protect Our People, Communities And The Environment Strong West Virginia Keys to Execution Presence Antero has more than 3,500 employees and contract personnel working…
  35. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 35
    CLEAN FLEET & CNG TECHNOLOGY LEADER Antero has contracted for two clean completion fleets to enhance the economics of its completion operations and reduce the environmental impact Replaces diesel engines (for pressure pumping) with…
  36. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 36
    Antero Midstream (NYSE: AM) Asset Overview 37
  37. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 37
    ANTERO MIDSTREAM PARTNERS OVERVIEW Midstream Assets Utica Gathering and compression assets in core of rapidly Shale growing Marcellus and Utica Shale plays Acreage dedication of 428,000 net leasehold acres for gathering and…
  38. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 38
    ANTERO MIDSTREAM HIGH GROWTH THROUGHPUT Low Pressure Gathering (MMcf/d) High Pressure Gathering (MMcf/d) 1,000 935 1,200 1,134 Utica Marcellus Utica Marcellus 800 1,000 908 738 800 600 531 600 531 386 400 331 281 400 266…
  39. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 39
    SIGNIFICANT FINANCIAL FLEXIBILITY AM Liquidity (3/31/2015) Financial Flexibility Undrawn 1 billion revolver in place to fund future growth ( in millions) capital (5x Debt/EBITDA Cap) Revolver Capacity 1,000 162 million of cash at…
  40. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 40
    APPENDIX 41
  41. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 41
    ANTERO CAPITALIZATION CONSOLIDATED ( in millions) 3/31/2015 Cash 185 Senior Secured Revolving Credit Facility 790 6.00% Senior Notes Due 2020 525 5.375% Senior Notes Due 2021 1,000 5.125% Senior Notes Due 2022 1,100 5.625% Senior…
  42. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 42
    2015 CAPITAL BUDGET Anteros 2015 capital budget is 1.8 billion, a 49% decrease from 2014 capital expenditures of 3.5 billion 3.5 Billion - 2014 1.8 Billion 2015 By Segment (MM) By Segment (MM) 50 150 841 49% 197 2,477…
  43. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 43
    COMPLETION DEFERRALS OPTIMIZING PRICING Plan to defer 50 Marcellus well completions into 2016 to achieve higher gas price realizations Regional gathering pipeline expected in-service late 2015 will connect incremental Marcellus…
  44. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 44
    ANTERO RESOURCES UPDATED 2015 GUIDANCE Key Operating & Financial Assumptions Key Variable 2015 Guidance Net Daily Production (MMcfe/d) 1,400 Net Residue Natural Gas Production (MMcf/d) 1,175 Net Liquids Production (Bbl/d) 33,000 Net…
  45. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 45
    ANTERO MIDSTREAM 2015 GUIDANCE Key Operating & Financial Assumptions(1) Key Variable 2015 Guidance Adjusted EBITDA (MM) 150 - 160 Distributable Cash Flow (MM) 135 - 145 Year-over-Year Distribution Growth(2) 28% - 30% Low Pressure…
  46. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 46
    OUTSTANDING RESERVE GROWTH NET PROVED RESERVES (Tcfe)(1) 2014 RESERVE ADDITIONS 3P reserves increased 16% to 40.7 Tcfe at 12/31/14 with a (Tcfe) Marcellus Utica PV-10 of 22.8 billion 14.0 Estimated 10% well cost reduction since YE…
  47. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 47
    CONSIDERABLE RESERVE BASE WITH ETHANE OPTIONALITY 35 year proved reserve life based on 2014 production annualized Reserve base provides significant exposure to liquids-rich projects 3P reserves of over 2.5 BBbl of NGLs and condensate…
  48. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 48
    MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Marcellus Well Economics and Total Gross Locations(1) Natural Gas 12/31/2014 strip 60% 1,200 Oil 12/31/2014 strip 1,010 42% 889 1,000 Total 3P Locations NGLs 32.5%…
  49. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 49
    UTICA SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Utica Well Economics and Gross Locations(1) Natural Gas 12/31/2014 strip 289 60% 300 Oil 12/31/2014 strip 248 49% 254 43% 250 Total 3P Locations NGLs 32.5% of Oil…
  50. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 50
    LARGEST GAS HEDGE POSITION IN U.S. E&P 2.1 billion mark-to-market unrealized gain based on 6/30/2015 prices 2.8 Tcfe hedged from July 1, 2015 through year-end 2021 and 140 Bcf of TCO basis hedged from 2015 to 2017 COMMODITY HEDGE…
  51. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 51
    RAPID GROWTH IN LPG EXPORTS AND CAPACITY Marcus Hook LPG Exports - 2014 U.S. Total LPG Export Capacity vs. Export Volumes Africa 2% 1800 Excess export 1600 capacity to support 1400 growing LPG export Antero access to export Mexico/…
  52. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 52
    FIRM TRANSPORTATION REDUCES APPALACHIAN BASIS EXPOSURE Anteros firm transportation (FT) portfolio increases visibility on production growth and increases exposure to Gulf Coast and Midwest pricing, with little incremental cost per Mcf…
  53. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 53
    ANTERO FIRM TRANSPORTATION APPROPRIATELY DESIGNED TO ACCOMMODATE GROWTH Marketable FT (BBtu/d) (2) (3) % FT Utilization Anteros firm transport (FT) is well (BBtu/d) Firm Transportation / Firm Sales (BBtu/d) (including utilized…
  54. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 54
    POSITIVE RATINGS MOMENTUM Moodys / S&P Historical Corporate Credit Ratings Moodys Upgrade Rationale S&P Upgrade Criteria The upgrade reflects Moody's expectation that Antero will continue to We could raise the ratings due to our…
  55. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 55
    20 BCF/D OF INCREMENTAL GAS DEMAND BY 2020 Significant demand growth expected for U.S. Projected Incremental Natural Gas Demand Through 2020 natural gas (Bcf/d) 9.5 Bcf/d of the 20 Bcf/d of 20 incremental demand is 20 More than 65%…
  56. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 56
    LNG EXPORTS BY PROJECT EXPECTED START UP LNG Exports by Project Through 2020 Assuming 9.5 Bcf/d of LNG exports by 2020, LNG Exports by Project Antero Supplied the U.S. will be the worlds 3rd largest LNG exporter behind Qatar and…
  57. JULY 2015 INVESTOR UPDATE – Antero Resources – slide 57
    ANTERO EBITDAX RECONCILIATION EBITDAX Reconciliation ( in millions) Quarter Ended LTM Ended 3/31/2015 3/31/2015 EBITDAX: Net income (loss) including noncontrolling interest 399.2 1,167.5 Commodity derivative fair value (gains)…

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