CHANGES SINCE MARCH 2016 PRESENTATION New AR slide highlighting specifics of AM unit offering Slide 4 and pro forma AR balance sheet Updated AR consolidated enterprise value and AM Slide 16 equity value as of 12/31/2015 pro forma for…
WHY OWN ANTERO 3.7 billion of consolidated liquidity available as of 12/31/15 pro forma for AM unit sale Balance Sheet Ba2/BB corporate ratings affirmed in February 2016 Strength Stable leverage not increasing through the down…
PRO FORMA IMPACT OF AM UNIT OFFERING Transaction Details AR Consolidated Pro Forma Capitalization (12/31/15) Antero Antero On 3/24/2016, AR priced the sale of 8 million units of AM at Resources Resources 22.40 per unit raising 178…
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 4Q 2015…
LEADING UNCONVENTIONAL BUSINESS MODEL Current Flexibility & Prudent Growth Drives Upside Participation in Value Creation Commodity Price Recovery 2 Growth & 3 Flexibility & Momentum Upside Most Active Operator Sustainable…
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…
DRILLING CONTINUOUS OPERATING IMPROVEMENT Utica Shale Ohio Marcellus Shale Operating Highlights Recently set new lateral day record with 5,291 drilled in 24 hours in West Virginia on the Charleston 3H Recently drilled and cased…
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 /…
GROWTH & MOMENTUM 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…
GROWTH & MOMENTUM CONTINUED 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…
FLEXIBILITY & UPSIDE ANTERO THRIVES WITH RISING COMMODITY PRICES As the most active operator in Appalachia, Antero has kept its workforce intact while also preserving the ability to accelerate efficiently when commodity prices…
FLEXIBILITY & UPSIDE LOW MAINTENANCE CAPITAL PROVIDES UPSIDE OPTIONALITY 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…
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…
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…
MIDSTREAM MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview Antero Resources Corporation (NYSE: AR) Public 10.8 Billion Enterprise Value(1) Ba2/BB Corporate Rating 38% LP Interest…
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…
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…
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…
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…
LIQUIDITY ANTERO 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…
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…
NORTHEAST NGLS ARE TRANSPORTATION CHALLENGED Not so much a supply problem but more of a logistics problem for NGLs in the northeast today The majority of northeast NGL production is being transported by expensive rail and trucking NGLs…
NORTHEAST NGL GROWTH IS SUPPORTED BY INCREASING TAKEAWAY OPTIONS NGL transportation rates are expected to decline 0.12 to 0.15 per gallon by 2017 as pipeline options to domestic markets and export terminals go in-service (Mariner East…
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 power generation…
KEY CATALYSTS FOR ANTERO 1 Large, low unit cost core Marcellus and Utica natural gas drilling inventory Sustainability of with associated liquids generates attractive returns supported by long-term Anteros Integrated natural gas…
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…
ASSET OVERVIEW 29
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 At 12/31/2015 strip pricing, Antero has…
WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT 100% operated RJ SMITH PAD Operating 7 drilling rigs including BEE LEWIS PAD 30-Day Rate 30-Day Rate 4-well combined 1 intermediate rig 4-well combined 30-Day Rate of 30-Day Rate of…
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 Average Antero Marcellus…
INCREASING RECOVERIES AND LOW VARIANCE IN MARCELLUS Anteros Marcellus average 30-day rates have increased by 55% over the past two years as the Company increased per well lateral lengths by 13% and shortened stage lengths by 33%…
MARCELLUS WELL PERFORMANCE IMPROVEMENTS Increasing recoveries and efficiencies, through longer laterals, shorter stage lengths and faster drilling SSL completions drove a 12% decline in development costs in 2015 while lower service…
WORLD CLASS OHIO UTICA SHALE DEVELOPMENT PROJECT 100% operated Operating 1 drilling rig Cadiz Processing 147,000 net acres in the core rich gas/ Plant condensate window (73% includes processable rich gas assuming an 1100 Btu…
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…
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…
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…
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…
Antero Midstream (NYSE: AM) Asset Overview 40
AMS FULL VALUE CHAIN BUSINESS MODEL Well Pad Condensate Gathering End Stabilization Users (Miles) YE 2015 YE 2016E Compression (Miles) YE 2015 YE 2016E Utica 19 19 Marcellus 76 98 Low Pressure Gathering Utica 36 36 Total 112…
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…
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…
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 &…
SIGNIFICANT FINANCIAL FLEXIBILITY AM Liquidity (12/31/2015) Financial Flexibility 1.5 billion revolver in place to fund future growth capital ( in millions) (5x Debt/EBITDA Cap) Revolver Capacity 1,500 Liquidity of 887 million at…
APPENDIX 47
ANTERO CAPITALIZATION CONSOLIDATED Pro Forma for AM ( in millions) 12/31/2015 Unit Sale(4) Cash 23 23 Senior Secured Revolving Credit Facility 707 529 Midstream Bank Credit Facility 620 620 6.00% Senior Notes Due 2020 525 525…
ANTERO RESOURCES 2016 GUIDANCE Key Operating & Financial Assumptions Key Variable 2016 Guidance Net Daily Production (MMcfe/d) 1,715 Net Residue Natural Gas Production (MMcf/d) 1,355 Net C3+ NGL Production (Bbl/d) 46,500 Net…
2016 CAPITAL BUDGET 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 2016 By Segment…
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…
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…
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…
LARGE UTICA SHALE DRY GAS POSITION Utica Shale Dry Gas Acreage in OH/WV/PA(1) Antero has completed its first dry gas Utica well a 6,620 Chesapeake Rice Hess lateral in Tyler County, WV Bigfoot 9H Porterfield 1H-17 Hubbard BRK 3H…
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…
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…
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…
LARGEST GAS 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…
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 BBtu/d in…
FT MARKETING EXPENSE 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…
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…
STRONG FINANCIAL LIQUIDITY AND DEBT TERM STRUCTURE Approximately 3.7 billion of combined AR and AM financial liquidity as of 12/31/2015 pro forma for AR sale of 8.0 million AM units on 3/24/2016 No leverage covenant in AR bank facility,…
POSITIVE RATINGS MOMENTUM Anteros corporate credit ratings were recently affirmed at Ba2/BB by Moodys and S&P, respectively, despite the severe commodity price down cycle Moodys / S&P Historical Corporate Credit Ratings Moodys Rating…
LARGEST LIQUIDS-RICH CORE POSITION Antero has over 2,700 undeveloped rich gas locations with an average lateral length of 7,580 in its 3P reserves as of 12/31/2015 Antero controls an estimated 37% of the NGLs in the liquids-rich…
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%…
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…
2015 GLOBAL LPG DEMAND Global LPG demand is 8.5 MMBbl/d and growing 68
GLOBAL LPG DEMAND DRIVEN BY PETCHEM AND RES/COMM Largest end-use sectors for LPG are residential/commercial, which tends to grow with population and improvement in living standards in the emerging markets PIRA forecasting 1.0 MMBbl/d…
GLOBAL LPG TRADE DRIVEN BY U.S. SHALE The U.S. is the largest single driver of the rapid expansion in LPG trade accounting for over 90% in trade growth MMBbl/d 5.2 4.6 3.9 3.3 2.6 2.0 United States 1.3 0.7 1.…
U.S. SHALE NGL EURS SUPPORT LPG TRADE GROWTH U.S. shale play NGL reserves are 50.8 billion barrels (1) Eagle Ford, Marcellus, Utica, Bakken and Permian are the work horses of U.S. shale production growth Marcellus/Utica NGL resource…
POSITIVE OUTLOOK FOR LONG-TERM ETHANE MARKETS AS WELL U.S. ethane demand is projected to increase at an annual 3.5% CAGR through 2020, primarily based on an 8% CAGR for U.S. petrochem demand and a 30% growth in exports primarily to…
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, which we expect will provide uplifts of 0.16/Gal and 0.18/Gal,…
ANTERO RESOURCES DECEMBER 31, 2015 RESERVES Anteros proved reserves were 13.2 Tcfe, while its 3P reserves were 37.1 Tcfe Proved pre-tax PV-10 at strip prices was 5.7 billion, while the 3P pre-tax PV-10 was 11.2 billion Including…
ANTERO RESOURCES EBITDAX RECONCILIATION EBITDAX Reconciliation ( in millions) Quarter Ended LTM Ended 12/31/2015 12/31/2015 EBITDAX: Net income including noncontrolling interest 175.6 980.0 Commodity derivative fair value (gains)…
ANTERO MIDSTREAM EBITDA RECONCILIATION EBITDA and DCF Reconciliation Three months ended in thousands December 31, 2014 2015 Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow: Net income 55,898 49,008 Add:…
CAUTIONARY NOTE Regarding Hydrocarbon Quantities The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserve estimates (collectively, 3P). Antero has provided internally…
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