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Scotia Howard Weil 2016 Energy Conference – Antero Resources

Antero Resources · Mar 21, 2016 · 43 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. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 1
    Scotia Howard Weil 2016 Energy Conference March 21, 2016 O
  2. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 2
    WHY OWN ANTERO 3.5 billion of consolidated liquidity available as of 12/31/15 Balance Sheet Ba2/BB corporate ratings affirmed in February 2016 Strength Stable leverage not increasing through the down cycle Production Sold 94% of…
  3. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 3
    LEADERSHIP IN APPALACHIAN BASIN Antero has the largest proved reserve base, largest core liquids-rich acreage position and is one of the largest producers in the Appalachian Basin Appalachian Producers by Proved Reserves (Bcfe) YE…
  4. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 4
    GROWING THROUGH THE DOWN CYCLE Antero is in the unique position of being able to sustain growth and value creation through the price down cycle AVERAGE NET DAILY PRODUCTION (MMcfe/d) AVERAGE NET DAILY LIQUIDS PRODUCTION (Bbl/d)…
  5. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 5
    2016 CAPITAL BUDGET DRIVES MOMENTUM Anteros 2016 initial capital budget is 1.4 billion, a 23% decrease from 2015 capital expenditures of 1.8 billion and a 58% decline from 2014 capital expenditures 1.8 Billion 2015(1) 1.4 Billion…
  6. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 6
    LOW MAINTENANCE CAPITAL PROVIDES FLEXIBILITY AND UPSIDE Antero can achieve 15% year-over-year net production growth for 2016 by spending only 675 million, or approximately 330 million less than the 1 billion of expected hedge revenues…
  7. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 7
    HIGHEST EBITDAX & MARGINS AMONG PEERS Quarterly Appalachian Peer Group EBITDAX (MM)(1) 600 Y-O-Y AR: 22MM For the first quarter AR has ranked first for the highest EBITDAX Peer Avg: 129MM and EBITDAX margin among Appalachian peers…
  8. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 8
    CREDIT QUALITY AFFIRMED Anteros Ba2 / BB credit ratings were affirmed by Moodys and S&P in February 2016 Moodys reviewed 20 high yield issuers and announced 16 downgrades ranging from 1 to 5 notches S&P reviewed 45 high yield issuers…
  9. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 9
    DRILLING MOST ACTIVE OPERATOR IN APPALACHIA COMBINED TOTAL 12/31/15 RESERVES Assumes Ethane Rejection Net Proved Reserves 13.2 Tcfe Net 3P Reserves 37.1 Tcfe Strip Pre-Tax 3P PV-10(1) 11.2 Bn Current SW Marcellus & Utica(3) Net 3P…
  10. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 10
    DRILLING CONTINUOUS OPERATING IMPROVEMENT Utica Shale Ohio Marcellus Shale Operating Highlights Recently drilled and cased longest lateral in company history at 14,024 feet Increased sand placement during completions to 98% in Q1…
  11. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 11
    DRILLING PROVEN TRACK RECORD OF WELL COST REDUCTIONS Marcellus Well Cost Reductions for a 9,000 Lateral (1) 14 DRILLING AFE COMPLETION AFE 12.26 12 11.15 32% Reduction in 10.80 Marcellus well costs 10.18 10.18 8.5 10 (0.95 /…
  12. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 12
    GROWTH & MOMENTUM PRUDENT GROWTH Antero continues to grow its production and cash flow through the commodity price downturn while also maintaining prudent leverage metrics 2016E EBITDAX and Production Growth(1) 2016E Production…
  13. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 13
    FLEXIBILITY & UPSIDE ANTERO THRIVES WITH RISING COMMODITY PRICES As the most active operator in Appalachia, Antero has kept its workforce in tact while also preserving the ability to accelerate efficiently when commodity prices…
  14. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 14
    WELL ECONOMICS SUSTAINABLE BUSINESS MODEL 12/31/15 NYMEX Strip Pricing - Before Hedges At 12/31/2015 strip pricing, Antero has 2,227 locations with well economics that exceed 20% rate of 12/31/15 Strip Pricing - After Hedges return…
  15. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 15
    WELL ECONOMICS HEDGING UNDEVELOPED PRODUCTION Antero has hedged a significant portion of its forecasted undeveloped production stream from wells yet to be drilled at prices well above current strip pricing, including virtually all of…
  16. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 16
    MIDSTREAM MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview Antero Resources Corporation (NYSE: AR) Public 10.9 Billion Enterprise Value(1) Ba2/BB Corporate Rating 34% LP Interest…
  17. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 17
    TAKEAWAY LARGEST FT AND PROCESSING PORTFOLIO IN APPALACHIA Anteros natural gas firm transportation (FT) portfolio builds to 4.85 Bcf/d by YE 2018 with 87% serving favorable markets, with an average demand fee of 0.46/MMBtu and…
  18. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 18
    TAKEAWAY FIRM TRANSPORTATION AND SALES PORTFOLIO While Antero has excess FT in place through 2017, the expected cost of unutilized FT is estimated to be manageable…
  19. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 19
    HEDGING INTEGRAL TO BUSINESS MODEL Hedging is a key component of Anteros business model which includes development of a large, repeatable drilling inventory Locks in higher returns in a low commodity price environment and reduces the…
  20. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 20
    LIQUIDITY STRONG BALANCE SHEET AND FLEXIBILITY Antero Resources (NYSE:AR) Antero Midstream (NYSE:AM) 12/31/2015 Debt Liquid Non-E&P Assets 12/31/2015 Debt Liquid Assets Debt Type MM Asset Type MM Debt Type MM Asset Type MM Credit…
  21. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 21
    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 4Q 2015 Natural Gas Realizations (/Mcf) 2015 NYMEX…
  22. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 22
    REALIZATIONS FAVORABLE PRICE INDICES Anteros exposure to favorable gas price indices like Chicago, Gulf Coast, NYMEX and TCO is expected to increase to 99% in 2016 Improved 2016 realizations driven by Stonewall gathering pipeline which…
  23. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 23
    REALIZATIONS NGL UPSIDE REFLECTS EXPORTS AND PROPANE HEDGES Ethane & Propane Pricing Improvement 2016E C3+ Guidance 0.50 0.47 Realized NGL C3+ Price WTI 60.00 0.45 0.40 50.00 2016 C3+ NGL pricing guidance 0.35 41.00 of 37% of WTI…
  24. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 24
    REALIZATIONS POSITIVE OUTLOOK FOR LONG-TERM NGL MARKETS Forecast global LPG demand growth of 800 MBbl/d to 1 MMBbl/d by 2020 to be driven by petrochem projects in Asia and Middle East as well as residential/commercial, alkylate and…
  25. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 25
    ANTERO MIDSTREAM GATHERING AND COMPRESSION ASSET OVERVIEW Gathering and Compression Assets Utica Gathering and compression assets in core of rapidly Shale growing Marcellus and Utica Shale plays Acreage dedication of 438,000 net…
  26. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 26
    ANTERO MIDSTREAM WATER BUSINESS OVERVIEW AM acquired ARs integrated water business for 1.05 billion plus earn out payments of 125 million at year-end in each of 2019 and 2020 The acquired business includes Anteros Marcellus and Utica…
  27. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 27
    HIGH GROWTH MIDSTREAM THROUGHPUT Low Pressure Gathering (MMcf/d) High Pressure Gathering (MMcf/d) 1,800 Utica Marcellus 1,800 Utica Marcellus 1,600 1,600 1,400 1,400 1,216 1,195 1,124 1,134 1,197 1,200 1,038 1,200 935 965 1,000 908…
  28. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 28
    HEDGE BOOK SUPPORTS FINANCIAL PROFILE 3,500 3,117 Mark-to-Market Hedge Value (MM) 3,000 2,500 Antero exceeds closest credit peer by 2.3 billion Ba1 Credit Peer 2,000 Ba3 Credit Peer 1,500 1,000 500 0 AR Peer 1 Peer 2 Peer 3 Peer…
  29. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 29
    HIGHEST PROPORTION HEDGED AMONG E&P OPERATORS Antero has substantially de-risked its cash flow profile and differentiated itself versus its peer group through its extensive hedge portfolio, with 100% of forecasted production hedged in…
  30. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 30
    OUTSTANDING RESERVE GROWTH NET PROVED RESERVES (Tcfe)(1) 2015 RESERVE ADDITIONS Proved reserves increased 4% to 13.2 Tcfe at 12/31/2015 with a pre-tax (Tcfe) Marcellus Utica PV-10 of 6.7 billion at SEC pricing, including 3.1 billion…
  31. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 31
    ANTEROS FIRST UTICA DRY GAS WELL Antero recently drilled and completed its first dry gas Utica well in IP / 1,000 Lateral (MMcf/d) Range EQT CNX Tyler County, WV (Rymer 4HD) 5.0 10.0 Claysville SC 11H Scotts Run Gaut 4IH 5,420…
  32. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 32
    ANTERO CAPITALIZATION CONSOLIDATED ( in millions) 12/31/2015 Cash 23 Senior Secured Revolving Credit Facility 707 Midstream Bank Credit Facility 620 6.00% Senior Notes Due 2020 525 5.375% Senior Notes Due 2021 1,000 5.125% Senior…
  33. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 33
    ANTERO RESOURCES 2016 GUIDANCE Key Operating & Financial Assumptions Key Variable 2016 Guidance Net Daily Production (MMcfe/d) 1,715 Net Natural Gas Production (MMcf/d) 1,355 Net C3+ NGL Production (Bbl/d) 46,500 Net Ethane…
  34. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 34
    ANTERO MIDSTREAM 2016 GUIDANCE Key Operating & Financial Assumptions Key Variable 2016 Guidance Financial: Adjusted EBITDA (MM) 300 - 325 Distributable Cash Flow (MM) 250 - 275 Year-over-Year Distribution Growth(1) 28% - 30% Operating:…
  35. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 35
    ANTERO FT PORTFOLIO APPROPRIATELY DESIGNED TO ACCOMMODATE GROWTH 2016 Firm Transport (BBtu/d) Antero projects firm transportation in excess of 4,000 Total Firm Transport equity gas production of approximately 1,640 BBtu/d 3,525…
  36. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 36
    FT PORTFOLIO UPDATE Illustrative Marketing Example: No Spread 2016 Projected Marketing Expenses: Unmarketable (EQT / M3) (/MMBtu) ( in millions, except per unit amounts) Demand 2016E 2016E 2016E 2016 TETCO M2 Pricing (Sold Gas) 1.56…
  37. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 37
    MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Marcellus Well Economics and Total Gross Locations(1) Natural Gas 12/31/2015 strip Oil 12/31/2015 strip 80% 70% 1,200 971 1,000 Total 3P Locations NGLs 37% of Oil…
  38. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 38
    UTICA SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Utica Well Economics and Gross Locations(1) Natural Gas 12/31/2015 strip 100% 300 85% 82% Oil 12/31/2015 strip 73% 250 Total 3P Locations 80% NGLs 37% of Oil Price…
  39. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 39
    CONSIDERABLE RESERVE BASE WITH ETHANE OPTIONALITY 27 year proved reserve life based on 2015 production annualized Reserve base provides significant exposure to liquids-rich projects 3P reserves of over 2.4 BBbl of NGLs and condensate…
  40. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 40
    NGL EXPORTS AND NETBACKS STEP-UP BY 2017 Upon in-service of Mariner East II, Antero will have the ability to market its propane and n-butane to international buyers, which we expect will provide uplifts of 0.16/Gal and 0.18/Gal,…
  41. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 41
    LARGEST HEDGE POSITION IN U.S. E&P 3.1 billion mark-to-market unrealized gain based on 12/31/2015 prices 3.5 Tcfe hedged from January 1, 2016 through year-end 2022 COMMODITY HEDGE POSITION 2,500 Hedged Volume Average Index Hedge…
  42. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 42
    STRONG FINANCIAL LIQUIDITY AND DEBT TERM STRUCTURE Approximately 3.5 billion of combined AR and AM financial liquidity as of 12/31/2015 No leverage covenant in AR bank facility, only interest coverage and working capital covenants AR…
  43. Scotia Howard Weil 2016 Energy Conference – Antero Resources – slide 43
    ANTERO MIDSTREAM ADVANCED WASTEWATER TREATMENT ASSET OVERVIEW Antero has contracted with Veolia to integrate an advanced wastewater treatment complex into its water business Advanced Wastewater Treatment Illustrative Produced &…

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